Fossil fuel trade has underpinned geopolitics for decades. While international climate agreements have had an impact on the geopolitics and trade of energy, the largest shifts have emerged from greater demand in China and shale oil in the US.
Climate change and environmental protection have moved from the periphery of international relations and geopolitics to centre stage, as they are increasingly recognized as threatening economic stability and societal well-being. There is a broad understanding that this global threat requires global action. However, over the last few years, the international cooperative approach to tackling climate change has become frayed, especially between the three major economic superpowers: China, the EU and the US. Consequently, there has been a shift among government policy towards competitive trade mechanisms that can further climate action in this new context.
This chapter introduces the establishment of cooperative international efforts to combat climate change and the role of the energy trade in shaping geopolitics. Chapter 2 explores the impact of the COVID-19 pandemic on greenhouse gas (GHG) emissions as well as energy supply and demand. Chapter 3 provides an overview of the climate policies of China, the EU and the US. Finally, Chapter 4 describes the shift to a competitive mechanism – taxing imported carbon – to combat climate change.
It is over 25 years since the inception of the United Nations Framework Convention on Climate Change (UNFCCC), which was established as a framework for international cooperation to combat climate change by limiting average global temperature increases. Today, 197 national governments are parties to the convention. There have since been additional international agreements to strengthen global commitment to the work of the UNFCCC, such as the 1997 Kyoto Protocol, the 2009 Copenhagen Accord, and the 2015 Paris Agreement. These and other outcomes from the various Conferences of the Parties (COP) of the UNFCCC have tended to increase the scope of the emissions covered by international agreements – encompassing more sectors and countries. The Kyoto Protocol never covered more than 50 per cent of global emissions (and fell to less than 20 per cent as parties left), while the Copenhagen Accord covered 80 per cent and the Paris Agreement 96 per cent. The climate mitigation ambition of the agreements has also increased. The Kyoto Protocol set binding emission reduction targets for industrialized countries, with an average of 5 per cent between 2008 and 2012 compared to 1990 levels. The signatories of the Paris Agreement committed to holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursuing efforts to limit the temperature increase to 1.5°C. Under the agreement, a bottom-up approach was adopted with each party encouraged to put forward progressively more ambitious emissions targets through its nationally determined contribution (NDC) every five years. Countries are expected to review and revise their NDCs before the 26th COP (COP26) in Glasgow in November.
Greater global climate ambition is more likely if there are clear and early pledges of increased ambition from influential countries.
Greater global climate ambition is more likely if there are clear and early pledges of increased ambition from influential countries, which can encourage and cajole others. Similar early peer pressure prior to COP21 in 2015 played a key role in the successful conclusion of the Paris Agreement. The previous year, President Barack Obama and President Xi Jinping issued a US–China Joint Presidential Statement on Climate Change. This stated:
The EU, largely through France’s presidency of COP21, played a vital role in its success, including through extensive preparatory work with different countries.
Despite the UNFCCC and other international agreements, however, global GHG emissions have increased by over 41 per cent between 1990 and 2016. As shown in Figure 1, China is now the largest emitter (25.7 per cent of the total), followed by the US (12.8 per cent) and the EU (7.8 per cent). Therefore, these three actors, as the world’s largest emitters as well as being geopolitically critical, have the greatest responsibility to reduce their emissions. Without their willingness to do so, the chance of meeting the Paris Agreement target will evaporate.
