The Climate Club, spearheaded by Germany, has launched "voluntary principles" for its member countries designed to address carbon leakage, with a stress on more transparent emissions reporting, and on the acceptance that different countries will pursue different climate policies.
Climate Club members Turkey and the UK, which jointly developed the principles, presented the outcome at an event during Climate Week in New York.
The principles include recognising the right of jurisdictions to "regulate and establish their own climate mitigation policies", and promoting the transparency, interoperability and accessibility of emissions monitoring, reporting and verification systems to promote international co-operation and facilitate trade.
The principles also underline the need for countries to collaborate in a "transparent" and "open" way to improve their common understanding on practices and policies, and to "identify relevant capacity gaps, needs and potential solutions and decarbonisation pathways based on country experiences".
The Climate Club was initiated by the previous German government, and was initially touted as an alternative to the EU's carbon border adjustment mechanism (CBAM), as Germany's strong export sector feared the consequences of a CBAM for exports.
The Climate Club's 46 members include the EU and most EU member states, Australia, Canada, Bangladesh, Egypt, Japan and South Korea, among others, but not the largest emitters China and the US, nor other significant emitters such as India, Brazil, Saudi Arabia, Iran or Russia.
The Climate Club's purpose is to support co-ordinated approaches to industrial decarbonisation among members, notably through its "global matchmaking platform" designed to facilitate technical and financial assistance for emerging markets and developing economies for decarbonising their industry.
Climate Club co-chair Berthold Goeke, head of the domestic and international climate action department at Germany's federal environment ministry, stressed that "carbon leakage needs to be addressed as long as mitigation efforts differ across countries".
Including the private sector in a public policy framework is important, consultancy onepoint5 director Gonzalo Canseco Gomez told delegates at the event. Several Latin American governments have pursued action reflected in ambitious nationally determined contributions to the Paris agreement and "robust" government programmes, Canseco said, but "nothing really happens" as the private sector fears losing out to competitors.
A report released last week by Global Climate Policy Project (GCPP) of US universities Harvard and MIT suggests more concrete and far-reaching principles. Drawn up by the GCPP working group on climate coalitions, the principles call for countries to commit to a minimum carbon price and a carbon border mechanism, and for incentives to be given to lower to middle-income countries to help them finance low-carbon technologies.
These principles will underpin an "open" multilateral climate coalition which the GCPP aims to launch at the UN Cop 30 in Belem, Brazil, in November, GCPP director Arathi Rao told delegates. This coalition would bring together countries willing to co-ordinate on carbon pricing and related policies, with an initial focus on carbon-intensive industries such as steel, aluminium or cement. Member countries would commit to a carbon price floor applying to these target industries within their borders.
