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Addressing the Climate Crisis Requires a Diplomatic and Global Finance Overhaul

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This commentary is published as part of IPD’s project Canada’s Interests in a Shifting Order in collaboration with Policy Options magazine from the Institute for Research on Public Policy.

When considering security crises in 2023, the top item on the list of most Canadian policymakers and observers is likely Russia’s invasion of Ukraine. Western governments have responded with concerted military and humanitarian support, sanctions and contributions to reconstruction efforts.

The speed and scale of that response is in stark contrast to the lacklustre reaction to other crises our world faces, particularly climate change.

As the Earth heats up to unprecedented levels, with devastating consequences for people across the globe, the danger of relegating this other crucial issue to a secondary status is growing.

Not only do we risk failing to hit the 2015 Paris agreement target to keep the increase in global temperatures to 1.5 C above pre-industrial levels – a threshold which itself threatens lives and livelihoods – but continued inaction will further fracture international relations.

In this summer marked by record wildfires and floods, global tensions are increasing. But the climate crisis cannot be tackled within the silos of borders. It requires global co-operation.

Climate change is geopolitical. Countless wars have been fought for oil, gas and coal. Extreme weather events – such as deadly heatwaves, floods and fires – as well as longer-term climate degradation – such as droughts and rising sea levels – are happening with increased frequency and intensity.

The economic dimensions of a changing climate – the consequences of dealing with harsher and more common natural disasters, the cost of inaction and the massive transformation underway to align the global economy with the Paris goals – are amplifying inequities across nations in ways that governments are just beginning to comprehend.

The Paris Agreement goals – and the transition away from fossil fuels that is necessary to get us there – cannot happen without a massive increase in funding to fight climate change, as well as changes in how the international finance system operates.

Countries from the Global South are disproportionately affected by climate change impacts. They also face various development challenges and very different fiscal contexts than the Global North.

G7 nations are responsible for the largest share of historical emissions. They also possess a greater capacity to cover the cost of climate action.

To limit warming to 1.5 C, countries agreed in Paris that all would bend their greenhouse gas emissions curve according to a “common but differentiated responsibility” and that rich countries would provide the resources to make this possible.

The economic dimensions of a changing climate – the consequences of dealing with harsher and more common natural disasters, the cost of inaction and the massive transformation underway to align the global economy with the Paris goals – are amplifying inequities across nations in ways that governments are just beginning to comprehend.

But countries from the Global North have not held up their end of the bargain. ​​In 2009, in Copenhagen, rich countries committed to mobilizing at least US$100 billion per year by 2020 through 2025.

The money was to help countries of the Global South mitigate and adapt to the growing effects of climate change. This amount pales in comparison to the needs, which the World Bank estimates at US$2 trillion annually. Even so, this much more modest commitment has not been met.

With the fiscal impacts of the COVID-19 pandemic still lingering, countries in the Global South are faced with an escalating debt crisis, which is compounded by the climate crisis. Fifty-two countries are dangerously close to or in default on their debts.

Developing economies also face unfair and unfavourable financing costs to transition away from fossil fuels, and to adapt to and recover from climate-induced disasters.

While the Global North borrows at rates ranging from one to four per cent, the Global South faces interest rates of around 14 per cent as Mia Mottley, the prime minister of Barbados and leader of the Bridgetown Initiative, has noted.

These heavily indebted countries are trapped into investing in fossil fuels by multilateral development banks or financial institutions in the Global North to generate oil and gas revenue that often does not materialize.

Meanwhile, in the Global North, resources and attention are being poured inward – which is necessary but insufficient when it comes to climate change. Countries are becoming increasingly insular as they jockey to reap the job and investment benefits of a “net-zero economy,” a development which exacerbates tensions with other countries.

In Washington, the Biden administration’s new doctrine – a “foreign policy for the middle class” – seeks to simultaneously decarbonize, disentangle from China and Russia, and deliver a more equitable economy.

Its groundbreaking Inflation Reduction Act promises at least US$369 billion in climate investments – including incentives for the wind, solar and geothermal industries, batteries, heat pumps and more.

Meanwhile, in the Global North, resources and attention are being poured inward – which is necessary but insufficient when it comes to climate change. Countries are becoming increasingly insular as they jockey to reap the job and investment benefits of a “net-zero economy,” a development which exacerbates tensions with other countries.

But when it comes to putting money on the table and contributing its fair share of international climate finance, the U.S. is missing in action. The U.S. continues to dodge the enormous responsibility it holds for the vast majority of the world’s pollution.

Trust is eroding without this promised money on the table, and as countries with disproportionate historical responsibility for the climate crisis continue to put literal fuel on the fire by expanding fossil fuels. At the Bonn Climate Conference in June, the resulting tension was palpable – and the talks ended in an impasse.

Overhaul of International Financial Governance Needed

Worldwide, scaling up renewable energy massively and phasing out fossil fuels through a just energy transition will be achieved only through the overhaul of global financial governance.

Where does this leave Canada? If it is serious about the climate crisis, engaging proactively to repair these global fractures should be a priority. But Prime Minister Justin Trudeau sent the opposite signal by his absence at a finance summit on the subject that took place in Paris in June where leaders from the Global South came to propose solutions.

So far, Canada and its G7 allies have been slow to show interest in transforming global institutions to reflect the needs of a multipolar world in an era of converging crises.

The Bretton Woods system created after the Second World War still represents the interests and the distribution of power of that era. This is notably reflected by U.S. dollar dominance and the G7-dominated voting shares, leadership and resulting priorities and actions at the World Bank and the International Monetary Fund.

What is needed is a massive global program to provide concessional finance for climate mitigation, adaptation, loss and damage – a Marshall Plan of sorts, but rooted in the Global North countries doing their fair share to solve a problem they caused, and with governance rooted in genuine partnership.

What is needed is a massive global program to provide concessional finance for climate mitigation, adaptation, loss and damage – a Marshall Plan of sorts, but rooted in the Global North countries doing their fair share to solve a problem they caused, and with governance rooted in genuine partnership.

As Mottley put it so clearly: “The world cannot continue in the shadow of an old imperial order that does not see countries, does not feel countries, does not hear countries, and worse – does not see people.”

Achieving this level of transformation will require the Global North taking steps to build bridges and support demands from the Global South, and for some Global North countries to play broker to avoid the escalatory dynamics of great power competition.

This is something Canada can take on in environmental diplomacy. The historic collaboration between Environment and Climate Change Minister Steven Guilbeault and his Chinese counterpart Huang Runqiu during the recent COP15 in Montreal, despite rising tensions with China, and the resulting Kunming-Montreal Global Biodiversity Framework is one example.

There will be other opportunities in the coming months, notably the upcoming United Nations General Assembly and COP28. To effectively rebuild trust, however, Canada must match its actions to its words on phasing out all fossil fuels, address the fiscal concerns of Global South countries, and champion climate finance reform, especially for adaptation and loss and damage.

Tackling the climate crisis at the speed and scale which is needed now requires a whole-of-government approach – one that includes coherent foreign policy and the country’s full diplomatic apparatus.

“Polycrisis” Requires Multipronged Solution

The framing of “great power competition” – a zero-sum contest between the U.S. and China – will not respond adequately to the current convergence of crises. In an interconnected world facing interconnected issues, what is needed is co-ordination across sectors and polities rather than additional competition.

Green industrial strategy is absolutely necessary, but an approach centred only on domestic issues runs the risk of aggravating geopolitical fault lines and being ineffective to limit warming to 1.5 C if the energy transition simply reproduces and exacerbates the international order’s inequity.

Brazilian President and BRICS founder Lula da Silva perhaps summarized this best: “We cannot accept a green neocolonialism that imposes trade barriers and protectionist policies under the pretext of protecting the environment.”

As a middle power, Canada is also not advantaged in a world characterized by great powers fighting. As my former professor Kishore Mahbubani, who was Singapore’s United Nations representative, used to say: when elephants fight, the grass always gets trampled.

With wildfires raging across the country all summer, it’s also clear that Canada cannot afford to focus only on what’s happening within our borders, or those of our traditional close allies. Climate change is a global crisis that requires global solutions – one that can allow us to build, if the response is right, a more just international system.

Written By:
Caroline Brouillette
Caroline Brouillette is the executive director of the Climate Action Network Canada - Réseau action climat Canada, a coalition of nearly 150 organizations operating from coast to coast to coast.
Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor