Global Climate Priorities and U.S. Engagement

This commentary is part of the annual Energy Futures Forum, a project from the CSIS Energy Security and Climate Change Program exploring changes to the energy and climate landscape over the next 10 years.

Old Story Short

Lack of ambition has become a sort of cliché within climate spaces. After eight years of what has probably been the most intense period of action, global efforts will lead to a temperature increase of 2.8 °C. Instead of driving a steep dive, emissions have at best flattened while CO2 from fossil fuels continues to grow. In two years’ time, governments will communicate their next Nationally Determined Contributions (NDCs) and it will become clear whether the temperature goal will be delivered in full by the joint action of governments.

Energy CO2 Emissions for the IEA Net-Zero Scenario (2010–2050)

Figure 1

Source: International Energy Agency, World Energy Outlook 2022 (Paris: IEA, October 2022), 126,

U.S. leadership has been a major determinant of global climate action. The administration has recently signed a set of acts which are expected to have a stark effect on U.S. emissions. The question arises as to what extent the legislation could catalyze global priorities.

Priorities Big and Small

Lagging climate ambition persists despite the great deal of efforts triggered by the Paris Agreement. Aside from government-related mandates (e.g., NDCs), tens of thousands of state and nonstate actors are engaged in the setting of targets and other climate measures. Over 500 cooperative initiatives covering all sectors are active, with about 100 composed of governments. 

In reflecting on the ambition gap, many authors have pointed to the nature of intergovernmental cooperation, which they describe as pushing increments rather than transformation and seldom going beyond symbolic action due to its aspirational and open nature, lack of content or absence of appropriate objectives and incentives. Departing from the assumption that only through cooperation could climate change be averted, proposed arrangements have included the strengthening of institutions, joint technology development, and sectoral agreements such as climate clubs.

Efforts, however, have not been entirely in vain as foreseen emission trajectories have progressively improved since 2015. Existing knowledge-based and technical cooperation has played a key role in setting a direction of travel as well as establishing the technical and political basis for economic transformation. Initiatives at this level are required but a shift toward action-based agreements (e.g., policy and finance) is well overdue. 

Of the recommendations from the International Energy Agency, which stress the need to address the hardest aspects of the transition today, these three are arguably the most important for international engagement:

  1. Accelerating a people-oriented shift away from unabated coal
  2. Developing strategies to transform emissions-intensive sectors
  3. Laying the groundwork for scaling up low-carbon fuels and industrial infrastructure

Faltering global efforts on these is evident today. The State of Climate Action identifies 40 sectoral indicators and related benchmarks for midpoints (e.g., 2030) consistent with the Paris Agreement. The report finds that most are “well off track” and some “going in the wrong direction,” including those relating to the priorities described above.

The Increasing Weight of the Global South

The fact is that limiting global warming will increasingly depend on decisions taken in the south. Already, developing countries account for a third of global emissions and have contributed 95 percent of their increase in the last years. Over the next two decades, CO2 emissions from developed countries will decrease while China’s will plateau and those from the rest of the world will increase by about 5 gigatons. All future emissions growth is expected from countries outside the Organization of Economic Cooperation and Development.

Global Energy-Related Carbon Dioxide Emissions in IEO 2019 Reference Case (2010–2050)

Figure 2

Source: Perry Lindstrom, "EIA projects global energy-related CO2 emissions will increase through 2050," U.S. Energy Information Administration, September 24, 2019,

Besides arguments of responsibility, the challenges faced by the Global South have been widely expressed in different forums. Priorities of poverty and inequality, low productivity, and scarcity of quality jobs make climate action secondary. As a result, many developing countries lack a clear vision for decarbonization (or are not interested in adopting one) and the adequate regulatory and policy environment to drive it. On the financial side, overburdened fiscal positions and expected costs for adaptation—about $160–$340 billion annually—exacerbate this situation. A transition through private capital is hampered by limited capital markets and high costs of capital.

No global transformation will be possible without the Global South and unless the above challenges are acknowledged and addressed, no transformation will take place in this part of the world—or at least not at the required pace.

A Basis for Strengthening U.S. Engagement

Engagement and leadership are built on what happens at home. Two recent pieces of law, namely the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, represent one of the boldest steps on climate by a U.S. administration. As complementary instruments, they are expected to set the United States on track to lower emissions to 40 percent below 2005 levels by 2030, un unprecedented contribution to global mitigation efforts. But beyond national direct climate and economic benefits, the legislative acts are set to have implications for global climate action and U.S. engagement in different ways:

  • Incentives are expected to result in sizeable cost reductions to technologies such as carbon capture and storage (CCS) and green hydrogen, key to decarbonizing hard to abate sectors.
  • S. industrial policy has been received with mixed feelings (e.g., the European Union) from the feared loss of green investment. A response with similar policies could open grounds for strategic cooperation of public funding, among others to increase scale and avoid waste, although some believe that competition is most effective to push the global transition forward.
  • Linked to the above, an emphasis on subsidies is likely to lessen enthusiasm to advance carbon pricing instruments and deliver an adequate global price signal. By the same token, engagement could take bolder steps on the issue of inefficient subsidies beyond the G20 commitment, which “[remains] unchanged in nominal terms to those of a decade ago,” according to the OECD.
  • Lastly, while the pledge by the administration to provide $11 billion annually can put the United States at the forefront of contributors, the figure is dwarfed by the size of the two domestic packages and is further shadowed by amounts provided to Ukraine and the fact that Congress has so far appropriated $1 billion in each of the last two years. The legislation does little to address the key question of climate finance, which will remain as one of the main points of contention at the international level.

Considering the strengthening national focus of climate policy in the United States and the increasing polarization—and fragmentation—of international politics, the question arises of what engagements address the priorities identified above and bring the Global South on board. The United States should take several steps to proactively involve the Global South:

Strengthen efforts on international financial institutional reform and climate finance. Investments of up to $5 trillion are needed by 2030, with a sizeable portion needed in the Global South. While there is enough liquidity in global financial markets, the challenges identified above impede private finance flowing at scale. International and regional financial institutions are best placed to address this situation, but they lack the mandate or unified vision. Developments on this front include the independent review of the capital adequacy framework of multilateral development banks, the Bridgetown Initiative and the roadmap of the World Bank. The landscape includes shifts in mandates and principles; core diagnostics and client engagement models; policy advice and related lending; and financing instruments and concessionality. The United States should continue to play an active role, be open to ideas from developing countries, and explore how the new legislation could be extended to increase climate finance contributions. Debt relief is also an available avenue.

Mobilize sector-based agreements. Cooperation in hard-to-abate sectors is advancing in several forums, with an emphasis on knowledge and technical cooperation. Some policy-based agreements around trade, overcapacity, and carbon intensity exist, although mostly between developed countries and catalyzed by concerns with leakage and competitiveness. Ideas for broadening participation have been developed and are also marked by these concerns. An international arrangement which brings together governments and companies could be established from all major producing countries. Agreements on standards and benchmarks as well as technical and financial cooperation have immense potential to tackle cement, steel production, and other emissions-intensive production head on. A key goal should be to engage the main producers in view of the high concentration of these industries and the lack of participation from the Global South. The United States could explore how the legislation could be used as incentives on technology cooperation, supply chains, and offshore production.

Treat green technology development as a global public good. Green hydrogen, CCS, and other modern technologies are key building blocks of the decarbonization agenda, but a large scale-up is required. Green hydrogen accounts today for about 1 percent of total production and, by 2030, CCS should be scaled by almost five-fold. Technology development cooperation is currently taking place through various initiatives, largely knowledge-based with some level of technical cooperation. The IRA brings an enormous potential for technology transfer and diffusion, which should be exploited through explicit instruments such as know-how programs, financial support for adoption and incentives for foreign direct investment, patent transfer and intellectual property rights agreements, green technology trade agreements, and others. The mere cost reduction is not a guarantee of scaled-up global uptake. The United States could actively use existing cooperation initiatives as a channel for operationalizing these instruments.

Reaping Global Benefits

For its size and boldness, the latest legislative acts will become the main engine for the U.S. transition to a decarbonized economy. At the same time, they will mark U.S. international engagement not only for the direct and indirect effects, but also for the perceived implications by third parties. Ultimately, the effectiveness of any country’s actions can only be evaluated at the international scale. The United States should therefore actively exploit the global co-benefits of its own legislation at a time in which global fragmentation risks the achievement of global goals and global well-being.

Claudio Forner is a senior associate at the World Resources Institute and is a participant in the CSIS Energy Security and Climate Change Program’s 2023 Energy Futures Forum. 

The 2023 Energy Futures Forum was made possible by support from Chevron and general support to the CSIS Energy Security and Climate Change Program.

Claudio Forner

Senior Associate, World Resources Institute