Climate club explained

A climate club is a coalition of the willing among countries that wish to adopt more stringent climate mitigation policies.

Sometimes the term is used loosely to refer to any such international climate alliance. However, the concept of a climate club has most famously been promoted in a stricter sense by William Nordhaus, winner of the 2018 Nobel Memorial Prize in Economics.[1] [2] In his conceptualization, the climate club introduces carbon pricing among the club's member states and levies a fee on all imports of goods from countries that are outside the club and have not introduced similar carbon pricing. This is expected to encourage more countries to join the club and introduce carbon pricing.[3]

The idea of a climate club has been criticized by countries that fear the imposition of fees on their exports as well as by researchers who are skeptical of carbon pricing in general.[4] Others have argued that some of the supposed losers, such as China and India, will actually gain from a climate club and the resulting introduction of carbon pricing.

The EU's Carbon Border Adjustment Mechanism (CBAM) has been labeled as the possible beginning of a climate club.[5] [6] [7] Others see CBAM as too narrow to function as a climate club.[8]

German Chancellor Olaf Scholz has proposed that the EU initiate the formation of a climate club. His proposal has been criticized as vague.[9]

Notes and References

  1. Nordhaus . William . 2015-04-01 . Climate Clubs: Overcoming Free-riding in International Climate Policy . American Economic Review . en . 105 . 4 . 1339–1370 . 10.1257/aer.15000001 . 0002-8282. free .
  2. Chen . Cuicui . Zeckhauser . Richard . 2018-02-01 . Collective action in an asymmetric world . Journal of Public Economics . 158 . 103–112 . 10.1016/j.jpubeco.2017.12.009 . 0047-2727.
  3. Hagen . Achim . Eisenack . Klaus . August 2019 . Climate Clubs Versus Single Coalitions: The Ambition of International Environmental Agreements . Climate Change Economics . en . 10 . 3 . 1950011 . 10.1142/S2010007819500118 . 191735215 . 2010-0078.
  4. Buylova . Alexandra . Fridahl . Mathias . Nasiritousi . Naghmeh . Overland . Indra . Reischl . Gunilla . 2022-07-19 . Climate action in the making: business and civil society views on the world's first carbon border levy . Climate Action . en . 1 . 1 . 17 . 10.1007/s44168-022-00015-4 . 2022CliAc...1...17B . 256392760 . 2731-3263. free .
  5. Overland . Indra . Huda . Mirza Sadaqat . September 2022 . Climate clubs and carbon border adjustments: a review . Environmental Research Letters . en . 17 . 9 . 093005 . 10.1088/1748-9326/ac8da8 . 2022ERL....17i3005O . 252179609 . 1748-9326. free . 11250/3056333 . free .
  6. Szulecki . Kacper . Overland . Indra . Smith . Ida Dokk . 2022 . The European Union's CBAM as a de facto Climate Club: The Governance Challenges . Frontiers in Climate . 4 . 10.3389/fclim.2022.942583 . 2624-9553 . free . 11250/3024350 . free .
  7. Al Khourdajie . Alaa . Finus . Michael . 2020-05-01 . Measures to enhance the effectiveness of international climate agreements: The case of border carbon adjustments . European Economic Review . 124 . 103405 . 10.1016/j.euroecorev.2020.103405 . 10044/1/77958 . 169259972 . 0014-2921. free .
  8. Tarr . David G. . Kuznetsov . Dmitrii E. . Overland . Indra . Vakulchuk . Roman . 2023-06-01 . Why carbon border adjustment mechanisms will not save the planet but a climate club and subsidies for transformative green technologies may . Energy Economics . 122 . 106695 . 10.1016/j.eneco.2023.106695 . 0140-9883. free .
  9. Web site: Kurmayer . Nikolaus J. . 2022-12-13 . Green industry: G7 sets out terms for global 'climate club' . 2023-12-10 . www.euractiv.com . en-GB.

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