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Perspectives on designing a climate club

EPICO - Macdonald-Laurier Institute Discussion Paper

Berlin/Brussels, 03 November 2022: As part of a transatlantic project between EPICO KlimaInnovation, Canadian think tank Macdonald-Laurier Institute and the Konrad Adenauer Foundation Canada, EPICO published a Discussion Paper presenting recommendations for designing a climate club, using the June 2022 G7 Statement on the Climate Club.

The areas for cooperation identified in the G7 Statement will find prominence at the upcoming Conference of Parties (COP27) in Sharm-el-Sheikh. This is also reflected in the Council of the EU conclusions adopted on 4 October 2022.

This paper brings together a unique collaboration of authors:

  • Parul Kumar (EPICO KlimaInnovation)
  • Heiner von Lüpke (German Institute for Economic Research / DIW Berlin)
  • Marian Feist (German Institute for International and Security Affairs / Stiftung Wissenschaft und Politik)
  • Heather Exner-Pirot (Macdonald-Laurier-Institut) and
  • Hubertus Bardt (German Economic Institute / Institut der deutschen Wirtschaft, Köln)

The authors argue for the efficient and strategic utilisation of time and political capacity to move away from a top-down approach focused on carbon pricing to a flexible plurilateral approach supported by existing examples of successful experiences in international climate cooperation. A climate club with a sectoral focus can offer pathways for accelerated emission reduction in emission-intensive industries, and strengthen alliance-building on aspects of policy, finance, technology, and trade. In this context, a climate club can play an important role in international knowledge-sharing and transparent communication about a diverse set of climate policy instruments across countries.

Additionally, it can strengthen partnerships with developing countries, particularly through drawing learnings from, and establishing synergies with, the Just Energy Transition Partnership (JETP) model, with a focus on developing institutional structures that are necessary for deeper climate cooperation and accelerated emission reduction.

The authors emphasize the importance of aligning to the Paris Agreement, including the principle of common but differentiated responsibilities and the commitment to climate finance. The authors conclude that the multilateral UN Climate Change Conference (UNFCCC) can be supplemented by a plurilateral alliance like climate clubs.

Our new publication provides ideas on how the idea of a climate club envisaged in the G7 Statement can be taken forward. A climate club can serve an important dual function in accelerating industrial decarbonisation through a sectoral focus, while also filling institutional gaps required for more effective action in the field of just transitions and climate finance. A climate club can advance action on the Paris Agreement goals through alliance-building among countries.
Our new publication addresses an important form of climate cooperation – climate clubs – and provides insights on how the concept can be further developed. We are pleased to have brought together German and Canadian expertise on the topic, through the collaboration between EPICO KlimaInnovation and the Macdonald-Laurier Institute.

Download the discussion paper here.

Press contact:

Nassos Anastasilakis

Mail: nassos.anastasilakis@epico.org