How Climate Ambition Can Save Multilateralism

csis.org/analysis/how-climate-ambition-can-save-multilateralism

January 22, 2021

This commentary is part of CSIS's Global Forecast 2021 essay series.

There is no problem more global, more far-reaching, and perhaps more daunting than
climate change. How unfortunate, then, that climate change is rising on the agenda as the
appeal and vibrancy of multilateralism is falling. Unfortunate, yes, but also an opportunity.
Institutions decay when they lack purpose, and addressing climate change could give new
meaning to the multilateral system. This is not merely about keeping our planet habitable—it
is also a strategy to resuscitate multilateralism.

Every international institution deals with climate change. The International Monetary Fund
(IMF) in its latest World Economic Outlook devoted a chapter to climate change, and the Fund
often deals with climate impacts when lending money or extending technical assistance. The
World Bank and other international financial institutions have, for years, made decisions
about what projects to finance, using climate change as a screening tool. In the Bank of
International Settlements, central bankers talk about climate change and financial stability.

Climate permeates institutions beyond finance, too. The World Trade Organization (WTO)
has heard and settled disputes related to low-carbon energy technologies. The UN Security
Council and other security organizations are engaged in conflicts made worse by climate
change. The UN high commissioner for refugees deals with climate migrants even if they are
not called that. The World Health Organization thinks about the interaction between public
health and a changing climate.

But climate is not a core function of these institutions. The system is designed to enable the
continuous interaction among 200-odd sovereign states without endless conflict. Order is a
necessary goal, but it is also elusive, especially when the system is changing quickly, as it is
today. During those times, leaders articulate higher ideals to build coalitions, to justify their
actions, to inspire. What loftier goal than proposing to tackle the most common and
omnipresent threat of all?

Leveraging climate change to revive multilateralism and making its solution a core purpose of
the system does not mean appending climate change to whatever an institution does. It
means rethinking the workflow of the organization and visualizing how its day-to-day
functions can be repurposed to address this problem.

For instance, the IMF can write about the macroeconomic benefits of tackling climate
change, but what the Fund really does is lend money and survey the economic health of its
members. A serious focus on climate change would mean assessing if a state’s finances can
withstand climate impacts; if a state can afford investments in mitigation and adaptation; what
climate-related shocks might jeopardize its output, employment, trade, and so on. It means
understanding that climate change and the energy transition will reshape every economy—
and that no projection is meaningful unless it incorporates these effects.

Or take the WTO. Trade has helped lower the cost of clean energy, especially solar. But for
countries trying to lower their emissions, the WTO is a problem, not a partner. That could
change. The zeitgeist in clean energy has shifted anyway: countries want jobs and industry,
and they yearn for deep, diverse, and resilient supply chains. They no longer want to merely
import the cheapest solution from China. The institution could help cater to that need rather
than merely preach the virtues of uninhibited trade.

The trading system could also accommodate another need: how to account for the carbon
intensity of traded goods. A country that wishes to decarbonize its energy system cannot be
undercut by others who do not. The limit on greenhouse gases, after all, is global, and an
appeal to “free trade” cannot be an excuse to pollute with impunity. Today’s rules make it
difficult for countries to tax imports based on their carbon intensity; it is the rules that must
change, not our aspiration to limit greenhouse gases.

The agenda can be even bolder in finance, building on the growing awareness that capital
must flow to activities that improve our world, not merely those with the highest short-term
return. As a voluntary process, this movement has yielded metrics, standards, and aspirations
—but limited change. The best governments can do to accelerate the energy transition is to
make space for lower-carbon options—money will then flow. But governments can also push
markets to be more transparent and prudent—and, by law, make it clear what investments
are compatible with a world trying to limit greenhouse gas emissions.

The list goes on. Not every institution will make climate change its number one priority, and
we have other goals too. Some might argue that these institutions already grapple with
climate change through special commissions, studies, and communiqués. But these actions
are not enough. Climate change is not just another topic for a lengthy report that gathers
virtual dust in the cloud. It is an urgent challenge whose impacts we feel—one that requires
deep, cross-border collaboration. Simply put, these institutions would operate differently if
climate change were a top priority for them.

For the Biden administration, this is a case for fusing two priorities that are now pursued in
isolation: rallying countries to combat climate change and reviving alliances and
multilateralism. On climate change, President Biden has rejoined the Paris Agreement and
has committed to ask the world’s major carbon emitters to increase their ambition. On
alliances and multilateralism, the president has promised to show that “America is back,”
repairing the alliances that were strained during the Trump era and resuscitating the
institutions that the United States helped create over the past 75 years.

This ambitious agenda can be made easier if the goals of fighting climate change and
restoring U.S. leadership are pursued in tandem. On climate change, the world will welcome
America back, but with some skepticism, especially as countries see an opportunity to lead in
developing the energy technologies of the future and as countries doubt Biden can achieve
as much in Congress on climate as he would like. On multilateralism, the return will be
welcome too, but with some hesitation as countries recalibrate their relationship with the
United States, seeking to understand what commitments Washington is still willing and able
to make and trying to navigate the increasing discord between the United States and China.

By combining action on climate with the multilateral reform agenda, the Biden administration
could avoid rehashing old debates and offer a new foundation for collective action. On
climate change, this means moving beyond the usual conversation—where each country sits
around the table to say what it is willing to commit to, where progress is measured in dollars
pledged or promised cuts to greenhouse gas emissions. On multilateralism, this strategy
would mean transcending old disputes about “institutional reform,” or “burden sharing,” or
“picking sides,” and channeling the conversation toward a shared problem that needs to be
solved rather than reformed governance for its own sake. These institutions are stuck and
need to change—climate change can be a way to infuse them with a new mission.

A multilateral reform agenda anchored on climate change would require that the United
States unsettle power structures and existing dynamics in these organizations. It means
giving voice to countries based on their contribution to solving a problem, not arcane rules or
legacy positions. It offers a guide for rewriting rules and reapportioning power—not based on
narrow U.S. interests, but on a yardstick that everyone can embrace: how much are you
doing to solve the greatest threat that humanity faces? For a multilateral system that seems
lost and directionless, a call to stop climate change could give it new meaning, purpose, and
life.

Nikos Tsafos is deputy director and senior fellow with the Energy Security and Climate Change
Program at the Center for Strategic and International Studies in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a
private, tax-exempt institution focusing on international public policy issues. Its research is
nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all
views, positions, and conclusions expressed in this publication should be understood to be
solely those of the author(s).

© 2021 by the Center for Strategic and International Studies. All rights reserved.

Written By

Nikos Tsafos
James R. Schlesinger Chair for Energy and Geopolitics

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