Online Desk: The increasing alignment of climate, geopolitical, and economic goals may help advance the global green agenda, according to the Munich Security Report 2024.

Yet countries’ national outlook risks undermining collaborative climate approaches and a positive-sum transition, the report said.

Climate cooperation with China hinges on the “broader relationship” between Washington and Beijing.

Competition on clean tech leadership could spur the climate agenda but trade frictions and the risk of weaponization of green technologies threaten to hamper global progress to net zero.

The transatlantic partners could be an engine for international climate action.

Yet frictions on subsidies and carbon pricing undermine their leadership potential.

To meet global net-zero targets and align climate and development goals, deeper, positive-sum cooperation between high- and low-income countries is required, including on climate financing and critical minerals, said the report in its chapter 7 – “Climate: Heated Atmosphere.”

The competition for green energy leadership between China and the US could prompt a “race to the top,” spurring green investments, innovation, and international climate action.

Yet the rising tensions between the two powers increasingly risk thwarting the global climate agenda by undermining cooperation and fragmenting the green energy market, the report mentioned.

Since China dominates across clean tech supply chains, policy-makers will need to square the imperative to reduce dependencies on Beijing with adequate cooperation to meet decarbonization goals, the report said.

In contrast to the common framing of climate as an “island of opportunity,” climate cooperation with China has been weak in substance in recent years and hinges on the broader state of geopolitics.

China’s suspension of climate talks with the US following then-speaker of the US House of Representatives Nancy Pelosi’s visit to Taiwan in 2022 is a case in point, according to the report.

The recent resumption of talks and the joint statement on reviving climate cooperation sent an important signal before COP28 a few weeks later.

However, the implementation of the agreement is uncertain, and more ambitious joint initiatives, such as on green trade rules, are unlikely, said the report.

The tensions between China and the US limit the room for climate cooperation that could drive the global green agenda, it said.

However, the bigger threat for international climate action is that this geopolitical rivalry erodes the rollout of green technologies, as access to them might be weaponized and trade barriers are fragmenting the clean tech market, according to the report.

Towards a Positive-Sum Transition?

The increasing alignment of climate, geopolitical, and economic interests could drive progress to net zero.

Yet as reflected in the divides between China and the US, the transatlantic partners, and high- and low-income countries, the narrow focus on national economic and security interests rather than global climate needs could negate the benefits of trade and climate cooperation and, in turn, delay the green transition.

Policy-makers will need to balance the focus on strengthening domestic green industries with efforts to forge international partnerships; and the need to reduce the vulnerability of clean technologies to weaponization with adequate cooperation to meet decarbonization goals.

The calls of low-income countries for new financial instruments and reforms of the international financial system to mobilize climate investments are thus getting louder, and the need for resources is even more pressing, as poorer countries, often the most affected by climate change, have to spend an increasing share of their GDP on climate adaptation, according to the report.

Controversies on China’s fair contribution and geopolitical frictions have complicated international climate financing agreements and hampered broader financial reforms – to the detriment of climate and development targets, said the report.