At an Earth Day summit, the White House announced that the United States will commit to a 50 to 52 percent reduction of greenhouse gas emissions by 2030, compared to 2005 levels. The administration also pledged to step up U.S. financing for the climate transition abroad. These are the initial culminations of the intense climate diplomacy that President Joe Biden has been pushing forward in the first one hundred days of his term, and this is hopefully only a start. Biden’s early domestic priorities and diplomatic agenda have put climate action front and center, though the issue remains contentious with Congressional Republicans.
John Kerry now sits on the National Security Council as the U.S. special envoy for climate. His appointment signals that climate resilience and adaptation are top domestic priorities for the United States at least for the next four years. Kerry is a key diplomatic trailblazer for the administration, appearing at times to tow almost an independent line of action. This strategic appearance shows that Biden has placed climate geopolitics high on the foreign policy agenda and wants to shield climate cooperation from other contentious issues, most notably with respect to China.
Both domestically and internationally, the Biden administration’s sense of purpose on climate action is admirable, and these early signs are heartening. Even so, obstacles to effective climate mitigation remain and must be navigated with care.
A Solid Start
Domestically, the Biden administration has made climate action a cross-cutting priority, and in this sense, it has become a precondition for sound economic, security, and financial policies. For example, climate action is being successfully pitched as a pathway toward economic recovery following the recession induced by the coronavirus pandemic. In addition to a $1.9 trillion relief package, Biden has proposed a $2 trillion infrastructure plan designed to accelerate the energy transition, boost efficiency, address environmental justice concerns, and bolster entrepreneurial innovation.
The plans attempt to simultaneously reduce poverty and inequality, spur climate action, and push for economic and racial reconciliation. Unfortunately, they have sparked bitter debates between Democrats and Republicans. This is not surprising given the contentious presidential election and the ongoing harmful politicization of climate action in the United States. Nevertheless, Biden’s packages should foster economic growth, which will yield benefits for international cooperation on climate action.
The downside, however, is that American consumerism and the need for economic expansion will keep growing, which will result in overshooting planetary boundaries that go beyond carbon dioxide emissions, in the form of further waste and environmental plundering resulting from mineral extraction. The United States needs to reflect better internally on how its economic model creates environmental consequences that must be avoided at all costs.
Globally, the Biden administration is striving to rebuild credible leadership and soft power around the climate agenda. The UK is set to host this year’s UN Climate Change Conference (COP26), but the pandemic and Brexit have delayed preparations on climate negotiations significantly. In organizing the April Earth Day summit, Kerry identified a need and turned it into an opportunity. The U.S. summit will partially make up for the dismal uncertainty around what COP26 can hope to achieve.
This diplomatic outreach so far has brought allies such as Japan to step up their commitments on reducing greenhouse gas emissions. The announcements on net zero ambitions are creating a virtuous race to the top. The key will be to ensure that these ambitions turn into actual plans—instead of merely greenwashing—to redesign energy systems as well as the economic models they generate.
Competition With China
Two areas are of rising concern, however. One is the competition between China and the United States. China has a fundamental comparative advantage in the form of a vertically integrated supply chain for green technology and energy commodities necessary for an energy transition. China is endowed with large resources of so-called rare earths—essential elements of new technologies—and other critical materials. Through its Belt and Road Initiative, it has already secured access to extraterritorial resources in addition to its own.
While China still uses coal at home, it is actually the most advanced exporter of solar, wind, and battery technologies. China’s production of rare earths is central to the energy security of the United States, so the former’s threats to cut off supplies are a grave concern for the latter. Rare earths are also crucial for the manufacturing of defense and satellite technologies. For these reasons, the United States is intent on rebuilding its ability to exploit and process these critical materials. It is also a matter of economic security: the green technology race is at the center of the global competition for the Fourth Industrial Revolution.
For the United States, decoupling from China may be a necessary move for strategic security, including around green job creation, but it is going to slow down transition pathways, something the world can ill afford. Rebuilding a strategic manufacturing sector will take years. Since the stakes are so high, the United States, and other powers, must work with China to deconflict cooperation around green energy and sustainable technologies. It is crucial that the United States and its allies harmonize approaches to China and reassure China that the proposed cooperation is not about thwarting its economic growth but about maintaining global stability.
Crossed Wires With the EU
Another area of potential friction stems from the EU’s planned introduction of a carbon border adjustment mechanism (CBAM). The EU favors a regulatory approach to emissions reductions and aims to create a mechanism that forces private sector actors to change rapidly to remain competitive. Meanwhile, playing to its strengths, the United States favors a market-driven approach and aims to spur private sector entrepreneurship and innovation. This approach may be insufficient to turn the tide fast enough on sectorial shifts without punitive measures in place such as a carbon tax.
But the truth of the matter is that both approaches are necessary and complementary. The United States should not discourage the EU from establishing a CBAM. Rather, the CBAM and ensuring that it is implemented gradually and accompanied by the necessary levels of R&D in key sectors that may be affected, including in the United States. They should also work together to quickly find transitioning solutions that employ both carrots and sticks.
The United States is back in climate diplomacy, and a sigh of relief can be heard around the world. Yet the country’s cultural viewpoints and economic systems endure, ones that foes and allies do not necessarily embrace. The impetus must be placed on identifying mutually reinforcing goals and approaches or, at least, ensuring that transition pathways do not create a zero-sum game that would hurt climate action and destabilize international relations.