Parul Kumarthe upward alignment of increased climate ambition and its implementation through policies and actions ”, with participation open to countries committed to the Paris Agreement and the limiting of the temperature increase to 1.5°C, as well as the acceleration of the transition to net-zero by or around mid-century and the acceleration of sectoral decarbonisation, particularly for the industry. inter alia at aligning with existing initiatives for industrial decarbonisation, sharing best practices, finding common definitions and markets for near-zero-GHG-emission materials, and exploring a common accounting system for hydrogen GHG footprints. The third pillar (“Boosting international climate cooperation and partnerships”) aims at enhancing multilateral and bilateral cooperation between members in respect of topics forming part of the first and second pillars. Enabling plurilateral engagement on climate policy: An alliance such as a climate club can play an important role in accelerating progress on the goals of the Paris Agreement through a focused approach on key topics and sectors. The Terms of Reference note that “[s]ome activities as set out in the three pillars of the Climate Club may only involve a subset of members, wanting to move ahead and cooperate more closely”, resulting in some activities of the club proceeding “with only a subset of members.” Implicit in the statement is the recognition of new forms of cooperation to increase ambition. The club architecture allowing for different focus areas to be cooperation pillars for different constellations of countries will be a valuable format for plurilateral engagement Knowledge-sharing: The Terms of Reference express an openness to “price-based and non-price-based climate change mitigation instruments”, continuing to signal a departure from the classic Nordhaus-style climate club, thereby reflecting a more strategic utilisation of political capacity The modalities of cooperation remain unclear: The Terms of Reference are useful in clarifying further focus areas for industrial cooperation, such as the alignment of methodologies, standards, sectoral strategies, and the expansion of markets for green industrial products. At the same time, the exact sectors in question are not clearly identified (with the exception of a reference to hydrogen). Some sectors identified as candidates for cooperation in the climate club in our analysis Inadequate focus on the specific requirements of developing countries: The text on the cooperation with developing countries, which finds a place under Pillar 3 (Boosting international climate cooperation and partnerships) has been watered down in comparison to the avowed commitment in the G7 Statement in June to “partnerships and cooperation to encourage and facilitate climate action and unlock socio-economic benefits of climate cooperation and to promote just energy transition ”, particularly through the exploration of synergies with the Just Energy Transition Partnerships (JETPs). Instead the Terms of Reference now couch the cooperation with emerging economies and developing countries in the following terms: “[ t]he Climate Club will provide a platform for alignment, matchmaking on a voluntary basis and creating synergies between cooperation and funding instruments. ” discuss how to align existing multi- and bilateral cooperation and how to address gaps in cooperation in line with involved developing countries’ needs for example by discussing options for joint activities and pooled funding ”, but falls short of concretising this in terms of action, and also shies away from linking this with the sectoral focus for industrial decarbonisation. The potential of the climate club should be harnessed for improving financial instruments and flows past successes in international climate cooperation Further development of the governance mechanism: The establishment of an interim secretariat involving international bodies - the Organisation for Economic Cooperation and Development and the International Energy Agency, which will also liaise with other relevant international organisations and initiatives - instead of the G7 is a step in the right direction to garner greater legitimacy for the initiative, particularly to signal that the club is not a mere G7 project, even as the G7 played the role of a political incubator Discussion Paper The climate club framework needs to be further developed in an inclusive manner: It is important that the further agenda and cornerstones of the climate club be formulated inclusively, and further concretised through consultation and inputs from other non-G7 countries, particularly developing countries, who should be involved right from the beginning in the deliberations on the vision and framework of the climate club. For more perspectives on the design of the climate club, see our Discussion Paper “ Alliance-building to strengthen international climate cooperation ”.
