As geopolitical poles shift, global governance is undergoing a crisis of confidence. An international majority of experts surveyed by the Brookings Institution believe that the current multilateral system is no more than moderately effective in delivering beneficial outcomes and that the system has deteriorated over the past two decades. The global response to the coronavirus pandemic and the subsequent vaccine rollout epitomize the failure of multilateralism in solving global crises. International institutions failed to avert a pandemic that has killed almost 7 million people worldwide.
The widespread loss of faith in the existing global institutions has prompted interest in alternative mechanisms of international governance. The inclusion of “like-minded partners” at G7 leaders’ summits to counter China and Russia, the expansion of BRICS, the enlargement of the Shanghai Cooperation Organisation, and Germany’s proposal to create a “climate club” of climate-progressive countries are notable attempts to challenge the status quo.
The current shake-up of the international order coincides with the inevitable reopening of the “end of history” debate. The rise of authoritarian and nativist politics in the past decade has brought the level of democracy enjoyed by the average global citizen today back to 1989 levels. This has precipitated the view in Western countries that there is a global rivalry in systems and values. Political rhetoric reminiscent of the four decades before the fall of the Soviet Union—autocracy versus democracy—has returned to the corridors of power across the Atlantic. Both U.S. President Joe Biden and European Commission President Ursula von der Leyen have framed the struggle of the day as the fight against autocracy, namely China and Russia.
To be sure, this is a view held primarily by the “Global West”—rich liberal democracies—and does not resonate with many in the developing world. The majority of the public in Nigeria, Mexico, and Kenya views China favorably. India, South Africa, Vietnam, and thirty-two other countries—many of them in Africa, Latin America, or Central or South Asia—abstained from the UN resolution condemning Russia for its invasion of Ukraine. Nevertheless, this ideological binary, for better or worse, will be a major force shaping the rise of new alliances and the reorientation of the international governance system.
But what is often forgotten is that climate change, largely induced by human activities, will introduce successive and unprecedented shocks to the system. Climate change will test the resilience of international governance and put liberal democracies and autocracies into a struggle that will be equally challenging for both. The necessary policy response to manage and minimize the impact of climate shocks will require the West to bridge the ideological divide, while remaining clear-eyed about the compromises it will have to make along the way.
Enter Climate Chaos
The climate crisis is unfolding in conjunction with the current geopolitical sea change, putting significant stress on the governance of global issues. The rising intensity and frequency of extreme weather events means that the world increasingly will have to contend with the socioeconomic impacts of multiple climate crises simultaneously.
A 2023 report from the top UN climate science body, the Intergovernmental Panel on Climate Change, warned that over 3 billion people are highly vulnerable to climate change. Countries in North Africa and the Middle East and small island states are among the most vulnerable. Climate disaster responses are likely to overburden the fiscal capacity of countries in these regions and make it more difficult to raise funds from international capital markets.
The devasting floods in Pakistan in 2022 that inundated a third of the country have racked up $40 billion in economic damage and reconstruction costs. Credit rating agencies in turn downgraded Pakistan’s sovereign credit rating. Small island states will become more susceptible to seasonal and devastating storms, which will only increase in intensity and frequency as the climate changes. Unless there are major overhauls in the international financial institutions to take into account the impact of climate disasters on sovereign debt, many climate-vulnerable countries will increasingly be trapped in a cycle of debt-strapped reconstruction and faced with the specter of a balance-of-payment crisis.
The Arab Spring showed how food and water scarcity caused by long periods of extreme weather could accelerate political change. Climate disasters, especially food shortages, are known to be triggers of political unrest, particularly in weaker states. The response to the coronavirus pandemic has demonstrated that public emergencies caused by major disasters can provide a pretext for governments to impose restrictions on civil rights, an opportunity that autocrats will exploit in no time.
Entering an Era of Deep Economic Change
The policies governments introduce to tackle the climate crisis will require major overhauls in domestic industrial, economic, and trade policies to realign geopolitical and geo-economic interests. For example, fossil fuel demand is expected to peak within the current decade. Declining demand for fossil fuel will have long-term impacts on global fossil fuel markets and fossil fuel–producing countries.
Fossil fuel producers—especially those with low income, fragile institutions, and an undiversified economy—will struggle to handle lower fossil fuel demand and will experience economic and political instability. Almost every producing country plans to be the last one standing, as shown by the continued growth of fossil infrastructure well beyond what the world’s carbon budget can handle. The misalignment between fossil fuel producers’ expectations and market demand is likely to lead to price volatility. The resulting instability not only poses a challenge for producers, but also means a volatile transition for emerging markets.
The recent overhaul in industrial and trade policies across the Atlantic is an attempt simultaneously to fast-track long overdue climate transformations and reduce economic and trade exposure to China and Russia, whose “no limits” partnership and economic coercion tactics have spooked politicians in Western capitals. The need to “reindustrialize” the economy has kick-started a transformation of industrial and trade strategies in the United States and the EU.
The U.S. Inflation Reduction Act has brought about the biggest injection on public funding for climate mitigation and adaptation in U.S. history. The EU has ramped up its renewable energy plans to lessen its dependency on Russian gas and is mulling over onshoring targets and national state-aid plans to drive the development of clean technology industries in Europe. This giant leap in climate policy on both sides of the Atlantic is a step forward in diversifying the supply chains of renewable energy technologies and making them more resilient, in line with the advice from the International Energy Agency.
However, the emphasis on domestic industry development over diversifying imports, through government subsidies and local content rules, is likely to stoke trade tensions. China has been leading the charge to denounce the new wave of green industrial policies in the West, despite implementing similar policies at home, calling them a “green trade barrier” and “green protectionism.” The BRICS group—Brazil, Russia, India, China, and South Africa—has since adopted similar characterizations of these policies. Prime Minister Mia Mottley of Barbados, who in June 2023 cohosted a global climate finance summit in Paris with President Emmanuel Macron of France to shape the road map to reform the international financial system, was in Beijing declaring her opposition alongside Chinese President Xi Jinping to policies aimed at “decoupling and severing industrial and supply chains,” in a veiled swipe against the G7’s “de-risking” economic and trade policy only two days after the Paris summit.
For developing countries that are unable to spend cash to prop up domestic industries on the scale seen in the United States and the EU, these landmark climate and industrial policies could put a dent in their chances of capturing a slice of the growing pie of the clean economy, jeopardizing their ticket to sustainable development. This may further undermine the fragile trust in the international trade system and raise the appeal of alternative global institutions established by revisionist powers.
Toward an Age of Climate Authoritarianism?
The skepticism in developing countries over climate policies from the West is justifiable. Developed nations likely delivered in 2022 on a pledge they made in 2009 to provide $100 billion per year in climate finance to the developing world, though they missed their 2020 deadline. None of the G7 nations has put in place climate policies that are deemed sufficient to meet the goals of the 2015 Paris Agreement on climate change.
The perception that liberal democracies have failed to respond to the moral and scientific imperative to act on climate has galvanized a growing group of progressive thinkers, mostly from the West, to channel their disappointment toward their own governments by looking up to authoritarian regimes.
The reasoning underpinning this perspective generally revolves around two lines of thought: authoritarian leaders operate on an extended time horizon that allows them to enact long-term interventions such as innovation and industrial policies, and immunity from public opinion gives them more leeway to introduce controversial but climate-friendly policies. The most radical advocates for eco-authoritarianism argue that the gravity of the environmental crisis requires technocratic elites or “enlightened despots” in highly centralized governments to push through the necessary economic reforms and impose constraints on individuals.
The premise that autocrats are shielded from the will of the people is questionable. Performance, in the form of economic and developmental outcomes, matters as much as ideology when it comes to maintaining the legitimacy of contemporary autocracies.
On a more fundamental level, a lack of free and open debate is more likely to lock policymakers into narrow fields of vision and generate half-baked policies fraught with unintended consequences. For example, a political drive to replace domestic coal boilers with cleaner gas alternatives to cut air pollution left many residents in northern China without heating in the winter of 2017, as energy planners failed to foresee the surge in gas that would come with the replacement program.
Attempts to study different political systems’ impacts on countries’ climate performance have yielded mixed results. Industrial composition, the influence of the oil and gas industry, and the type of electoral system a country has are all variables that could have an overriding impact on its government’s climate and energy policies. But the same studies all point to the value of a nation’s democratic capital—citizen participation in public policy, civil liberties, democratic elections, and free press. These features have a positive impact on national policies for addressing climate.
While “democracy versus autocracy” is not a useful prism through which to analyze the effectiveness of climate governance, the growing influence of autocratic states is a reality when it comes to climate change. In 2010, our research shows, 35 percent of carbon emissions in G20 countries came from autocracies (see figure 1). That number currently stands at 52 percent and is likely to rise to 58 percent by 2030. For context, G20 countries account for approximately 80 percent of global emissions.
The political incentives that have helped advance reforms to address climate change in rich liberal democracies—with electorates putting pressure on governments to enact policy change, underpinned by civil liberties, democratic elections, and free press—may not exist in some of the major emitters of tomorrow (see figure 2). But the economic incentives of access to global clean tech markets and the prospect of inbound investment on green industries appeal to democratic and authoritarian governments alike.
What’s Next?
With a significant share of tomorrow’s emissions coming from developing countries with more repressed political systems (as shown in figure 1), what strategy should politicians and diplomats in Washington, Brussels, and other Western capitals deploy to bring global emissions down, while confronting the rise of authoritarianism and navigating the reorientation of the global governance system?
First, international climate policies should not be a casualty of national security or great power competition. Climate impacts and climate policies will be consequential in shaping the reorientation of international order, alongside geopolitical forces such as Russian aggression or competition with China.
Second, safeguarding global climate safety and protecting democratic values requires an effective diplomatic strategy to incentivize the major emitters of tomorrow—which are more likely to have systemically divergent political values from the West—to curtail emissions. Runaway climate change is more likely than a stable climate to create the political conditions for authoritarians to thrive.
Third, Western leaders must be mindful about the international impact of well-intentioned climate policies at home, making sure they do not dent the chances for developing countries to move up the clean technology value chain and thereby damage support among developing countries for more ambitious climate actions.
These are all essential elements of an effective strategy to rebuild trust in the rules-based international order, get ahead in an era of competing alliances, and put the world on track for a safe climate. Specifically, transatlantic policymakers should ensure that their allies and partners, particularly the major-emitters-to-be, are presented with a compelling case for decarbonizing their economies in the form of access to finance, markets, and know-how. These new partnerships must be carefully designed so that they do no harm to repressed or marginalized groups in the partner countries.
Scaling Up Finance
The current level of international climate finance falls well short of the need. Developing countries and emerging economies will require $2.4 trillion per year by 2030 in order to align their development with the Paris Agreement climate targets and adequately adapt to climate impacts. The annual level of climate financing has grown significantly in recent years, doubling from $653 billion in 2020 to $1.3 trillion in 2022, which consists of funding from domestic and international sources, and a mix of public and private finance.
Despite the encouraging progress, the issue of climate finance remains a major fault line between the Global North and the Global South at UN climate negotiations and has hampered the effective implementation of the Paris Agreement. The failure of developed countries to meet their 2020 goal of providing $100 billion of climate finance annually to developing countries has been cited by developing countries, including large emitters such as China and India, as a barrier for them to further cut emissions. The latest data from the Organisation for Economic Co-operation and Development suggests that the $100 billion goal “looks likely to have already been met as of 2022.”
A new climate finance agenda should move beyond bilateral financing deals, such as the recent Just Energy Transition Partnerships (JETPs) between G7 countries and major energy consumers in the developing world, and focus on reforming the international financial architecture to get the trillions flowing. This will support the transition in emerging economies and help climate-vulnerable countries break the perpetual cycle of debt caused by extreme weather and subsequent reconstruction.
At the June 2023 New Global Finance Pact Summit in Paris, leaders from both developed and developing countries issued a mandate for multilateral development banks (MDBs) to step up their financial firepower for climate and development objectives. As shareholders of major MDBs, the United States, the EU, and EU member states should work together through the G20 to champion these reforms, including being more creative in their use of their Capital Adequacy Frameworks to boost the banks’ ability to lend.
International financial architecture reform is an opportunity for the West to put China on the spot to demonstrate its commitment to “true multilateralism” and “lead[ing] by example” in good faith. Beijing’s support in expanding the World Bank’s balance sheet and closely coordinating on sovereign debt relief discussions with the Paris Club creditors would go a long way in improving access to climate and development finance for developing countries.
Minding Their Climate Policies
As transatlantic policymakers shore up domestic clean technology production with industrial policies and import substitution strategies, they are also building new trade and investment relationships with raw minerals producers and exporters.
The EU and the United States should base these supply chain and clean tech partnerships on attractive offers that address their partners’ development priorities. Arrangements that are excessively focused on import substitution or limited to safeguarding raw or processed minerals can be perceived as “extractivist” and alienate trade partners.
After an initial misstep that marginalized U.S. allies from the green subsidies in the Inflation Reduction Act, the United States has reassured its partners they will not be unfairly treated. It has established agreements with Japan and dialogues with the EU to make sure that their goods are not at a disadvantage.
The EU has set out to establish strategic partnerships under the Critical Raw Materials Act to support partner countries’ critical minerals sectors and has also pledged to support partners’ processing and downstream industries in a bid to differentiate its offer from that of China. The union could consolidate this offer via industrial partnerships under its Net-Zero Industry Act to develop clean tech manufacturing capacities in partner countries. The EU has signed raw materials partnership agreements with Argentina, Namibia, and Kazakhstan and is eyeing similar arrangements with Chile, the Democratic Republic of the Congo, and the Philippines.
Each of these partnerships should aim at bringing development benefits that make the recipient country a more attractive destination for private investment in the long run. This could take the form of initiatives to upskill local workforces and support the transfer of technologies necessary for domestic companies to move up within global value chains.
Safeguards should be put in place as part of these partnerships to ensure that they benefit not only elites, but also local communities; protect the rights of disadvantaged and marginalized groups; and align with international norms on labor rights and environmental protection. These new initiatives should be designed in close consultation with local civil society and independent third-party experts, and project information should be made easily accessible to encourage open scrutiny. This alignment with democratic norms and standards will strengthen partners’ institutional resilience and social cohesion, thereby increasing the recipient countries’ resilience against autocratic takeovers.
A growing clean tech industry in the developing world will not only help increase resilience in clean tech supply chains, but also provide economic incentives for developing countries to accelerate their climate transitions and lock in support for higher climate ambitions.
Be a Climate Democrat
While the rights to life, liberty, security, and equality are democratic values, they must not be exclusive to democratic systems. These are fundamental human rights that all people should enjoy. Democracy cannot flourish where despots reign, nor in a world breaching climate limits. It is only natural that democrats should also be climate activists.
Autocracies are not always long-termist and therefore not always effective in climate policy. Democracies have shown their ability to invest in transformation over multiple decades, and democratic governance has some critical benefits in allowing states to challenge entrenched interests, tackle corruption, and ensure public support for radical change.
Climate change transcends borders. Historically, climate activists have stood shoulder to shoulder with marginalized and underrepresented groups worldwide in their battle against injustices. At its core, climate activism is deeply rooted in democratic principles. While speed is of the essence in the climate transition, this urgency must not deter the climate movement from scrutinizing abuses in the supply chains of green technologies nor permit climate advocates to overlook the human suffering inflicted by environmentally friendly yet repressive regimes. Green despots, in the end, remain despotic.
As the world confronts the urgent challenge of climate change, let us remember that thriving democracies cannot exist in a world ablaze, nor should our pursuit of environmental justice inadvertently steer us toward a fair-weather brave new world.
Correction: This piece has been updated to show the correct sourcing for figure 1 and to add Juan Pablo Osornio as an author.