Picking Winners

The annual UNFCCC Conference of the Parties, which convenes the 197 states and territories which have signed on to the UN Framework Convention on Climate Change, is one of the anchoring events of climate politics discourse, alongside the release of IPCC reports and increasingly regular occurrence of climate-fueled natural disasters. Since the first was held in Berlin in 1995, when atmospheric carbon levels were around 358 parts per million (today they hover around 414), a steady procession of COPs have produced a great deal of geopolitical drama, but have not yet managed to reduce carbon emissions. 

In 1997 there was the fight over the Kyoto Protocol, widely criticized for concessions to the US insistence on market mechanisms; followed in 2001 by George W. Bush’s announcement that he would not implement it anyway. In 2009, many expected that Barack Obama’s election would clear the way for a legally binding agreement at COP15, in Copenhagen – officially branded ‘Hopenhagen’ by the UN. Instead, negotiations nearly collapsed over bitter disagreement between developed and developing countries, and eventually culminated in a weak deal brokered behind closed doors by Obama and Wen Jiabao. Six years later, the Paris agreement was hailed as a world-historic triumph, even though the voluntary commitments made by individual member states failed to add up to the agreement’s stated goals. As climate activists pointed out, and even the text of the agreement acknowledged, although the agreement set a goal of limiting global warming to ‘well below 2º C’, the aggregated commitments would result in an estimated 3º of warming. Nor were the Paris Accords complete: they dictated that signatories update their pledges five years later. This was the key task set for COP26 in Glasgow.

Although more people are paying attention to the COP process than ever before, there has also been a striking decline in public confidence. The years since 2015 have seen serious challenges to international action of many kinds. Trump’s withdrawal from the Paris agreement prompted subsequent acts of defiance from the likes of Bolsonaro, Modi and Putin, while the gilets jaunes protests against Emmanuel Macron’s gas tax prompted new anxieties about the backlash to climate policy. At the same time, rising tensions between the US and China have contributed to pessimism about the prospects for global agreement. The ‘Climate Behemoth’ – a reactionary alliance between right-wing populism and national fossil capital, schematized by Geoff Mann and Joel Wainwright – has gained popularity, countering the bid for planetary sovereignty they see represented in the COP process. Pledges aside, carbon emissions continue more or less unabated.

In many ways the circumstances of Glasgow recall the disastrous proceedings in Copenhagen: taking place in the aftermath of a world-shaking economic crisis, marked by protest and dissatisfaction, undercut by the failure of a US president to secure domestic climate policy. Even Greta Thunberg’s memorable description of COP26 as a place of talk and no action – ‘blah, blah, blah’ – was less novel than it initially appeared: ‘Blah, Blah, Blah, Act Now!’ had already adorned signs at the Copenhagen protests in 2009. On the uselessness of the talks, Thunberg and the world leaders she indicts likely agree: Xi and Putin did not even bother to attend.

By the conclusion of the conference, a few new agreements had materialized, although most came with caveats. Twenty nations agreed to stop financing global oil and gas projects abroad, although most continue to subsidize oil projects at home – echoing the G20’s commitment to stop financing coal plants internationally, even as member countries continue to use coal domestically. A hundred countries, led by the US and EU – but excluding China, India and Russia – pledged a 30% methane reduction by 2030. A hundred and forty-one countries agreed to stop and reverse deforestation by 2030 – although Indonesia, where primary forest has decreased by approximately 50% since the 1960s, immediately backtracked, calling the terms ‘inappropriate and unfair.’ The US, France, Germany, EU and UK struck an $8.5 billion agreement to help South Africa transition away from coal use – important in its own right, but perhaps even more so as a potential demonstration of the feasibility of a ‘just transition’. Most incredibly, the text for the first time in the history of the COPs includes the words ‘fossil fuels’.

But even most boosters have been forced to admit that Glasgow was a disappointment. By now the problems with the COP process are well-canvassed, ranging from the features of its institutional design to the nature of national sovereignty. The consensus model tends to result in a lowest common denominator approach to agreement. Countries set their own decarbonization goals, but also report their own progress towards them; unsurprisingly, a Washington Post report recently found that progress towards decarbonization is seriously overstated. Absent a global sovereign, there is no way to compel action, even when agreements are reached.

So be it, many would say: too much time has been wasted on global diplomacy when real progress is being made elsewhere. The conventional wisdom on climate politics is shifting away from the need for grand global agreements focused on climate specifically, and instead emphasizing the potential for addressing climate change with economic mechanisms: industrial policy, trade agreements, global finance. This is, in many respects, long overdue. In spite of the massive fossil fuel delegation and distasteful corporate pavilions, COP26 is not really where important investment decisions are made. The UN’s array of environmental agencies has always been a shadow to the fora where global capital makes its rules.

Advocates of green industrial policy in particular challenge the ‘collective action’ framework, suggesting that climate action is no longer a cost to be shouldered, and that free-riding is no longer the central problem to be solved. Rather, the ‘energy transition’ offers benefits in the form of industrial renewal and jobs: instead of shirking their commitments to decarbonize, states will compete for green market share.

The promise that a brighter green future is just around the corner is another familiar refrain of climate politics: back in 2011, for example, Obama promised to ‘win the future’ with investments in ‘innovation.’ But what is genuinely different about this COP is that the private sector is lurching into gear. The recent rash of corporate net-zero pledges and surge of ESG (‘Environmental, Social, Governance’) funds should not be taken at face value, of course. But Chinese state investment in low-carbon technologies, and solar panels in particular, has catalyzed the renewable energy industry and set a challenge to Western governments.

The hope of industrial policy advocates is that the US, EU, and China will compete for the green tech market – at least, the sectors which China does not already dominate – setting off a virtuous circle of competition amongst green capitalists. Politically, state support for fledgling green tech industries is expected to generate constituencies for decarbonization which can serve as a counterweight to the entrenched power of fossil capital. Green industrial policy advocates tend to flatten the differences between labour and capital, suggesting that the central axis of conflict is between carbon-intensive and decarbonizing coalitions, even as clean-energy darlings like Tesla union bust. It is a view which puts most stock in the power of one fraction of capital to counter another; popular mobilization and labour strife feature primarily as threats to stability to be warded off. Joe Biden’s pair of infrastructure bills, for example, take cues not from the public investment-driven Green New Deal of Alexandria Ocasio-Cortez but from the innovation-oriented Green New Deal of the late 2000s, as outlined by Thomas Friedman and Edward Barbier. The model, which targets subsidies at strategic sectors like clean hydrogen production and carbon capture and storage, is more Silicon Valley than the Tennessee Valley Authority.

Focused on production in one country, industrial policy frequently relies on a methodological nationalism which neglects the global interdependence of contemporary production, while frequently threatening to tip into a more overtly political nationalism where convenient: this is a vision of climate policy that can coexist with, and perhaps even benefit from, increasing antagonism between the US and China. The key elements of its international policy are not grand global agreements but trade deals like the recent US-EU agreement to reduce steel tariffs and incentivize the production of ‘green steel’.  

Industrial policy oriented towards boosting ‘green tech’, however, has limits as climate policy. It does little to directly reduce fossil fuel use, prevent the construction of new fossil fuel infrastructure, or even directly reduce carbon emissions. It also faces political obstacles of its own. The tariffs and subsidies necessary to nurture emergent domestic industries are likely to garner objections from the WTO. A state which takes a more active role in ‘picking winners’ will face familiar challenges of domestic distributive politics. At the same time, as Cédric Durand has argued in Sidecar, by failing to undertake more substantial planning, states risk a slower and more disruptive transition away from fossil fuels. Meanwhile the still-powerful fossil fuel industry will seek to turn any stumbles to its advantage, as Adam Tooze warns.

From the perspective of many of those gathered at COP26, however, what is perhaps most concerning about the shift to green industrial policy is that it bypasses the many parts of the world which have little hope of competing with the big industrial powers on green tech. There will be ripple effects down the supply chain, of course. Some countries will garner new interest in minerals like lithium and cobalt. Those with relatively intact forests may be able to sell carbon offsets to help multinationals meet their net-zero promises – nearly all of which are currently premised on carbon removal in some form. But many other parts of the world will be surplus to the ‘green economy’, except as consumers of the products it generates. It has long been hoped that developing countries would be able to ‘leapfrog’ fossil fuels altogether and move straight to renewable-powered electricity. The countries most in need of electrification, however, are typically faced with high borrowing costs – a problem which bears directly on the energy transition, since renewable energy infrastructure is often more capital-intensive than coal-fired power plants. The problem of access to finance is made still worse by the fact that, as Kate Mackenzie observes, countries deemed to have a high ‘climate risk’ must pay more to borrow.

There was much talk about climate finance at COP26. But for economist Daniela Gabor, what it revealed was simply ‘status-quo financial capitalism entering its green age’ rather than any more transformative project. The response to Covid-19 spurred talk of the ‘end of neoliberalism’ and the return of the interventionist state. But the response to climate change thus far suggests a less dramatic reorientation: as Gabor observes, thus far the role marked out for the state in climate finance is not to undertake public investment but to ‘derisk’ private investments in green sectors.

A different response to the dead end of the COP process, then, would be to make a lateral move, taking climate justice to the global financial institutions. The political scientist Jessica Green argues that international trade and finance ought to replace the UN framework as the ‘locus of climate policy’, while also calling for major reform to global financial institutions. The problem is figuring out how such long-sought reforms might come about. Labour and environmental movements in countries with valuable minerals or powerful industrial sectors may be able to exert some influence over trade deals, as United Steelworkers did in the US-EU steel agreement. The global reach of green supply chains offers the possibility for more internationalist organizing, as Thea Riofrancos has argued. But the prospects for reform of global trade and financial institutions are hazier.

The global climate justice movement has undoubtedly spurred a change in the conversation. But at present, it simply does not have the power to realize its goals. At COP26, climate justice activists criticized the failure of developed nations to make good on their commitment to spend $100 billion annually on climate finance – a sum agreed on in 2009 in an attempt to salvage the Copenhagen talks. Yet the more ambitious demand, both then and now, is for a framework for loss and damage, which would require open-ended funding for harms incurred as a result of climate change – something which might come close to climate reparations. The argument in favour of it is morally unimpeachable. But it is hard to see what could force the US or EU to agree to a programme that would expose them to liability claims long into the future.

Lacking leverage, the movement has resorted to the tools it has available: spectacle, and, most notably, shame. This year, the foreign minister of Tuvalu, Simon Kofe, gave his COP26 speech knee-deep in ocean waves to symbolize the threat that rising seas pose to his island nation’s existence. This, too, recalled a previous moment of COP politics, in 2009, when President Mohamed Nasheed of the Maldives held an underwater cabinet meeting prior to the ill-fated meeting in Copenhagen. But if the power players at COP26 have learned to speak the language of climate justice, they have so far remained shameless. Andreas Malm has called for a reevaluation of tactics, arguing that the climate movement must become more combative. Different tactics may help disrupt business as usual – but they are unlikely to solve the fundamental problem of power.

As climate policy is finally incorporated into economic policy, whither the COP process? The COP cycle will continue. But it seems increasingly likely to be an afterthought: a forum where countries with no chance of competing on green tech or being invited to G20-like summits do what they can – which is to say, not very much – to extract concessions from the rich and powerful countries which have built their wealth on ecological destruction, and which are now using that wealth to escape its consequences. In other words, not so much an emergent global sovereign as a charity fundraiser.

Lola Seaton, ‘Painting Nationalism Green?’, NLR 124.