Trade frictions and increasing tension between the US and China won’t affect climate negotiations between the two superpowers if he can help it, the US climate chief has pledged.
John Podesta, a senior adviser to Joe Biden on international climate policy, said the relationship between the world’s two biggest emitters and largest economies was critical to climate action, despite what appears to be a deepening gulf over trade policy.
“I think both sides recognise that there’s greater tension in the relationship and friction, but that we have an obligation to both the citizens of our respective countries and to the people of the world to keep discussing and see where we can find a way forward,” he said.
Examples of the pair working together include the joint hosting of a crisis meeting on methane emissions, planned for the next UN climate summit, Cop29, in Azerbaijan this November. Podesta will also visit China later this year, having hosted his Chinese counterpart, the envoy Liu Zhenmin, in Washington DC earlier this year.
The US has angered China by slapping punitive tariffs on imports of green goods, including electric vehicles and solar components. Podesta defended the moves, and said they would not deter the US from cooperating with China on ways to reduce greenhouse gas emissions.
“Even as we’re calling out what we believe are unfair trade practices on their side, and trying to deal with those trade frictions, we continue to try to find a path forward, in both the multilateral and the bilateral process,” he said.
One of the most fraught issues that will be addressed at Cop29 is the need for a new global settlement on financial aid to developing countries, to help them cut greenhouse gas emissions and cope with the impacts of the climate crisis. The key task for the Azerbaijani hosts is to guide the world to a “new collective quantified goal” on climate finance.
The US wanted a “layered” approach to this framework, Podesta said. Some developing countries want a simple number – a trillion dollars a year is the amount demanded by India for the global goal – that developed countries must ensure is provided, mainly from taxpayer funded public finance and development banks.
But Podesta is resisting this demand, in favour of an approach that allows for several potential numbers within a framework that weighs the needs expressed by developing countries alongside the responsibilities of wealthy and high-emitting countries.
“I think it is highly likely that there’s going to be what I’m describing as maybe two numbers, or more than one number, a number that reflects what is the challenge and need, and – embedded in that – a number that reflects what the contributing community can do to stimulate that,” he said.
In practice, this could mean setting an estimate such as $1tn (£779bn) a year as the overall need for finance for developing countries – the $1tn figure comes from widely accepted research by the economists Lord Stern and Vera Songwe – and a separate goal for how much of that finance should come from developed countries and development banks such as the World Bank. The rest would be presumed to come from private sector sources.
“That envisions using some of that [publicly provided] money to unlock other flows of capital into the space, including domestic resources [in the recipient countries], private sector flows, etcetera,” he said. “So I think what we need, given the literal needs that are in the trillions of dollars, is to be able to leverage public resources towards that end and create stronger mechanisms, for example to create private sector support for the deployment of renewable energy.”
He added: “The goal needs to be realistic, and the mechanisms for achieving those goals need to be realistic.”
Podesta was also insistent on the need for more countries to contribute to the public sector finance requirements. “[The current system] doesn’t account for the capacity [of large developing countries to be donors] or the obligation to take account of both their emissions and their capacity to be part of the solution,” he said. “And I’ve discussed that with my Chinese counterpart.”
Within the current negotiations, the world is divided into developed countries that must contribute to finance and developing countries that do not. But these demarcations were drawn up in 1992 when the UN framework convention on climate change, parent treaty to the 2015 Paris agreement, was signed, and the classification takes in China and other middle income countries such as South Korea, as well as petrostates such as Saudi Arabia and Qatar.
This is increasingly untenable, Podesta argued, even though China has made much of its offers of finance to the developing world, which it has made on a voluntary basis. “We’re perfectly willing to take note of that [south-to-south finance] but that needs to be embedded in an overall framework in which voluntary becomes part of the commitment to the world.”
He noted that many of the poorest countries were in debt to China and making crippling debt service payments as a result. “[China is] by far the largest emitter and it’s all well and good that they want to make voluntary contributions – but also right now we’re seeing that there’s outflows of capital from the poorest countries back to China,” he pointed out.
Barbados, France and Kenya are leading an effort to find innovative ways of financing the transition away from fossil fuels, which was agreed at last year’s Cop28 summit in Dubai. These could include a wealth tax on billionaires, favoured by Brazil, levies on petrostates and taxes on shipping and frequent flyers.
Podesta refused to rule any of these in or out, but said it was vital to find ways for the private sector to fund the expansion of renewables in the developing world, particularly Africa. “What we do recognise is the need for finance in least developed countries,” he said. “We’re not seeing those flows occur. That is a failure of the international system to not being able to solve the energy poverty needs of an entire continent,” he said.
Reform of the World Bank would help, he added. “Our push towards MDB [multilateral development bank] evolution and what we’re seeing now from new leadership at the World Bank gives me hope that we can create innovative mechanisms to be able to ensure that we’re seeing more private sector investment in this space, which can be self-sustaining.”
