Below please find key take-outs from our April 21st panel featuring Orson Porter, Senior Managing Director at Teneo; Connie Hedegaard, Chair of OECD Round Table on Sustainable Development and former European Commissioner for Climate Action; John Podesta, Founder of the Center for American Progress and former Counselor to President Obama on climate policy; and Monica Frassoni, Senior Advisor at Teneo and former Co-President of the European Green Party.
- With President Biden’s Leader’s Summit on Climate set 5 years after the Paris Agreement, the focus has steadily shifted from the definition of goals to clear guidelines on implementation. The agreement on the EU climate law did not only bring the aforementioned law and a 55% emissions reduction target, but it also provided for sectoral roadmaps and an independent scientific council to guide the Union. Within this frame of translating targets into action, the Biden administration’s renewed climate ambition serves as a firestarter for global climate action.
- From a European perspective, the Biden presidency has brought relief, as US engagement in climate diplomacy brings both geopolitical adversaries and different industries together. Particularly, the prospect of four more years without the US taking part in climate summits, and the ensuing uncertainty surrounding the viability of the Paris objectives could have made the functioning of the existing climate coalition difficult. Now, the return of the US makes further cooperation within the G20 possible on a number of transnational climate issues, such as fossil fuel subsidies, green financial taxonomy, an end date for internal combustion engines and the modernisation of the WTO. The EU is particularly keen on that last issue, according to Ms Hedegaard, as she stresses that, while climate change measures should comply with the WTO, the WTO should also be compatible with the fight against climate change. Finally, the return of the US to the climate table does provide a challenge to the European climate leadership, bringing greater competition of other major players with it as well.
- In that regard, while the rumoured Carbon Border Adjustment Mechanism may be on the table, it is far from becoming a reality according to Ms Frassoni. For a far-reaching instrument like that to come to fruition, political alignment is absolutely necessary, which the current structure of the EU does not allow for. The current EU climate initiatives, such as the climate law, the fit-for-55 package and the green taxonomy all require significant public & business support, which has made it challenging. However, the arrival of President Biden and the accompanying climate agenda pushed the EU into overdrive, seemingly kicking off a positive race to the top. However, maintaining public support will be essential in ensuring the conservation of momentum amidst changing democratic majorities.
- From the US perspective, the coming of the Biden administration has reshaped the way that the federal government handled the ongoing health, civil liberties and climate crises. According to Mr Podesta, President Biden was able to weave a narrative around the rebuilding of the American economy with a focus on making it more sustainable, equitable and just, with climate at the very center of it. In doing so, the President, in parallel with the European agreement, is taking a sectoral approach, focussing on public-private partnerships in achieving the goal of 50% emissions reduction by 2030. Crucial to this partnership is the industry’s willingness to see a pathway for emissions reduction, which has been apparent in multiple sectors. Mr Podesta pointed out the strong objectives that the automotive sector has recently set as an example. However, the issue of polarisation and the lack of bipartisanship means that US climate policy will have to jump through a few hoops in order to achieve its lofty goals.
- Internationally, the EU has strived to achieve a constructive climate dialogue with China, with the Obama-era US-China agreement being key in bringing the country into the fold. Now, while the US-China relationship remains tense, the Biden administration seems to have accepted that climate cooperation will be crucial.
The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.