German econ min warns against new global rifts on way to climate neutrality
Increasing competition and new global power structures caused by the shift to climate-neutral industries and energy sources risk splitting the world anew into conflictive spheres, German economy and climate minster Robert Habeck warned at a high-level international energy conference in Berlin. “If the world wants to become climate neutral, this has massive repercussions for the geostrategic structure,” Habeck said, according to a transcript of his speech. He added that new partnerships and dependencies would arise. “If it goes badly, this will mean that not trade, and market-based principles in force lead us, rather, this will split the world into spheres of interest which are driven by economic and energy policy conflicts. That would be the bad solution.”
Habeck told the audience of energy ministers, diplomats, energy business leaders, NGOs and climate activists at the Berlin Energy Transition Dialogue that the competition in green industries was intensifying and needed rules to ensure international fair play. “If we are honest, there will be shifts between our continents and regions, the gloves will be off between them,” Habeck said. The climate club Germany initiated at the G7 level was an attempt to set rules for a fair way forward. “Those countries which see themselves as pioneers, which want to contribute, feed in ideas, which want to show ways forward to engage in climate action, are heartily welcome to join the Climate Club,” Habeck said.
Europe itself has addressed business concerns that more ambitious rules to reduce climate-harming greenhouse gas emissions could put them at a disadvantage versus international competitors with its Carbon Boarder Adjustment Mechanism, which many trade partners fear will lead to protectionism. The United States Inflation Reduction Act added fresh concerns over a new wave of protectionism with its preferential treatment of domestic businesses, as did the European Union’s response, the Green Deal Industry Policy.