Liberal Internationalism Cannot Solve Climate Change

Liberal Internationalism Cannot Solve Climate Change

Governments will no doubt have a role to play in the climate fight, but they must first recognize that not only do nations have incentives to not commit to the fight, but that even climate change itself will produce its winners as well as its losers.

There’s a popular line, repeated throughout the environmental world, that goes something like this: Climate change affects all of us. It’s a global problem that requires a global solution—for when the planet warms, we all lose.

This school of thought—known as international liberalism amongst foreign policy types—has long dominated the climate discourse. The theory holds that cooperation, mutual benefit, and international organizations are essential to tackling the world’s problems and ensuring proper global governance. Treaties like the Kyoto Protocol and the Paris Agreement are testament to their enduring popularity, and their impact on the cultural narrative surrounding climate action has been massive. Indeed, everyone from former UN Secretary-General Ban Ki-moon to Greta Thunberg has aligned behind the idea that global environmental issues are best solved through international collaboration.

The approach seems reasonable on its face—climate change will surely be felt across the planet, from the Arctic to the Sahara. In its broadest sense, global warming will be indiscriminate.

But it is here that liberal internationalist thought reaches its logical limit—for while the presence of climate change is one thing, its actual political implications are quite another.

Bluntly put, it’s wrong to assume good faith on behalf of actors that—far from being invested in a collective decarbonization project—view rising emissions as congruent with their national interests.

Instead, a serious international decarbonization campaign will need to begin with a more realistic view of the international order and build its policy platform by understanding that both carrots and sticks—rather than paeans to international cooperation and collective interests—are necessary to reaching our climate goals.

The Polar Dividing Line

Here in the United States, the climate discussion is inundated with apocalyptic images—mass extinction, refugee crises, and dystopian landscapes. And not without reason: like most of the world, the United States stands to lose a great deal as the planet warms.

But is this true everywhere? What of China, where the melting sea ice of the Arctic Ocean will open markedly better trade routes? What of Russia, where the once-unfarmable Far East could soon become a flourishing industrial hub? What of Canada, where access to fresh water and fossil fuels could transform the country into a global superpower?

It’s a massive story that gets very little coverage: for those countries who sit—or have interests—above the fifty-fifth parallel, climate change isn’t a risk. If anything, it’s an enormous opportunity.

Indeed, as the planet warms, the global economy may shift substantially northward. Siberia and the Northwest Territories will become booming centers of agriculture. Countries like Canada, plagued by small populations and declining birth rates, will see massive influxes of skilled workers. Scandinavia’s hydropower sector will thrive.

And when industry shifts, global influence is sure to follow. One landmark study from Marshall Burke, deputy director of the Center for Food Security and the Environment at Stanford University, estimates that countries like the United States could see their growth stunted by as much as one-third due to unwanted climate impacts. Canada, Scandinavia, and Russia, meanwhile, could see their GDP shoot up five-fold.

A global power vacuum, then, seems destined to open—and many have begun jockeying for position. Perhaps none have been more aggressive than Russia, which in 2013 declared the development of the Far East a “national priority for the entire 21st century.” Russian president Vladimir Putin has started offering Russians free land in the region and has even discussed flying in “hundreds of thousands” of workers from India to meet the area’s rising labor needs. China, too, has seen the potential to its north, investing billions of dollars into Russian farm development and establishing itself as one the Far East’s largest private landowners.

Major powers are thus poised not only to respond but indeed capitalize on the melting Arctic—a move that could put global climate action in serious jeopardy. It’s not, of course, the first time that international liberalism has had a blind spot on the issue: the very idea underpinning climate treatymaking—that nations like India and China might prioritize emissions cuts over economic growth—has proven to be exceptionally, impressively wrong. But with countries whose interests are tied up in the Arctic, it’s even worse. For it’s not that they don’t have sufficient reason to decarbonize—it’s that they have a distinct reason not to.

And the Arctic is just one example of many. Indeed, for the majority of the developing world, the West’s clean power campaign is more of a threat than an opportunity—industrialization requires a great deal of energy, and fossil fuels are simply more available than their renewable alternatives. One thus cannot reasonably expect nations like Indonesia—whose last two decades of growth have lifted more than one-half of the country out of poverty—to relinquish their fossil fuel dependency in the name of some ill-defined environmental goal. It is a reality that has kneecapped climate action for nearly twenty years: even as the First World decarbonizes, the Third World’s push to industrialize will cause emissions to skyrocket.

So, if the goal is truly to limit global warming wherever possible, then climate liberalism is a deeply reckless pursuit. Governments will no doubt have a role to play in the climate fight, but they must first recognize that nations have incentives to not commit to the fight and that even climate change itself will produce its winners as well as its losers. For all the rousing speeches and congratulatory handshaking, this truth remains fundamental.

Border Adjustments

How, then, might the United States respond?

The United States could play along with the rest of the world, trying desperately to secure its interests in the north as the Arctic thaws. Politically, this may even be the safest move.

But I’d hold that the better fight—politically, economically, and morally—is climate change itself. The goal ought to be incentivizing decarbonization abroad.

There are a few ways the United States might be successful here. The passive approach, popular for its simplicity, would be to rely on ongoing trends in the global energy market. To be sure, many countries may stumble into climate action by accident, implementing clean energy infrastructure for the simple reason that it is increasingly a cheaper option than conventional fossil fuels.

But while this approach is useful, it’s somewhat incomplete. Countries like Russia cannot realistically be expected to halt their oil and gas production because of declining renewable energy costs; fossil fuels remain too great a domestic resource, constituting over one-third of the nation’s exports and supplying nearly 90 percent of their energy capacity. Market forces have improved the position of clean energy, certainly—but many still see crude oil as central to their continued growth.

Global decarbonization, then, requires that the United States and its allies pursue a more active foreign policy strategy—one best achieved through international economic pressure.

Fortunately, economies depend heavily on exports—this is certainly true for countries like China and Russia, whose exports account for 19 percent and 29 percent of their annual GDP, respectively. The United States, meanwhile, is the world’s leading importer, combining with the European Union to represent more than one-third of China and Russia’s export value.

It’s here that there’s the clearest opportunity for action. Over the last several years, the possibility of a so-called “carbon border adjustment mechanism” (CBAM) has gained significant traction as a hawkish climate policy tool. Designed like a tariff, the CBAM is intended to levy a tax on imported goods based on the carbon emissions incurred in their production. The hope is that it will level the economic playing field between countries that have environmental regulations and those that do not—a move that could incentivize decarbonization and cut into China’s long-held manufacturing supremacy.

The European Union will be the first to make the idea a reality, having adopted a proposal earlier this year to levy a CBAM by 2023. The plan could be profoundly effective, with one study from the Leibniz Institute for Economic Research suggesting that the border adjustment could reduce the European Union’s carbon leakage (wherein companies outsource to countries with looser environmental regulations) by up to two-thirds.

Yet the power of the European Union’s CBAM is limited by the lack of other national border adjustment schemes. Europe is certainly a major economy, and the incoming tax will incentivize cleaner manufacturing practices abroad—but its impact will be only a fraction of that which would result from the United States adding its own CBAM model. Simply put, the border adjustment will become increasingly effective as more countries implement them—but right now, the European Union is on an island.

To its credit, the United States has slowly started to consider the idea of a CBAM—yet the conversation remains frustratingly superficial. In July, Senate Democrats’ attempt at adding a “border carbon tax” to the 3.5 trillion dollar budget resolution made meager progress—the Biden administration withheld its support for the proposal, and Republicans opposed it vehemently, calling the plan a “freight train to socialism.”

No matter, really, for the American CBAM was unserious from the start. Indeed, implicit in the concept of a border adjustment is the expectation that countries will levy a tax equivalent to their own domestic carbon price; Such is the requirement of the World Trade Organization (WTO), whose non-discrimination principle defends against protectionism. But America doesn’t have its own carbon price and has instead tried to push the idea of “implicit carbon pricing,” wherein countries can define their carbon price as the net cost of their overlapping environmental regulations. By most accounts, such an approach is unlikely to hold water; as economist Michael Smart puts it, the border adjustment “needs to be combined with a domestic regime” to be WTO-compliant. It seems that American leadership is yet unprepared to take this seriously.