By Andrew Sheng and Xiao Geng / Hong Kong
Two global struggles – the Second Cold War and the fight against climate change – clash. By agreeing to hold a virtual summit before the end of this year, US President Joe Biden and Chinese President Xi Jinping have indicated that they want to prevent relations from deteriorating to the point that a miscalculation could lead to conflict. armed – a risk that recent tensions in the Taiwan Strait have highlighted. But Biden and Xi must also ensure that their great power competition does not hamper cooperation on the existential threat of climate change.
The upcoming United Nations Climate Change Conference (COP26) in Glasgow represents a major opportunity for the United States and China to show their commitment to face this threat. There is reason to hope. Since 2015, when COP21 delivered the Paris climate agreement, the dangers of global warming have become impossible to ignore, due to five of the hottest years on record.
In addition, the United States and China have set ambitious climate goals. Even the corporate sector seems to have realized the risks of inaction – and the opportunities of the green transition. China alone could have to spend as much as $ 47 billion to meet its goal of becoming carbon neutral by 2060. That’s a lot of investment that could be directed to companies that offer innovative solutions.
But, as environmentalist Paul Gilding argued a decade ago, tackling climate change will require not only large-scale mobilization, comparable to that seen during World War II, but also a radical change of mindset. We need to replace our âdependence on growthâ with an âethic of sustainabilityâ. Gilding quoted economist Kenneth Boulding: âAnyone who believes that exponential growth can last forever in a finite world is either a lunatic or an economist. “
Thus, average growth will probably have to slow down. At the same time, however, the relationship between consumption and investment must change, as massive resources will be needed to tackle climate change, as well as to achieve other social and development goals, such as reducing poverty. inequality.
The good news is that global players, including the International Monetary Fund, are increasingly recognizing the need for systemic change. And China has quietly stopped targeting GDP growth – a sign that sustainability is now a priority over the blind pursuit of higher production.
But, as Gilding acknowledged, such a system change will be exceptionally difficult, not least because growth is currently anchored in profit plans, debt contracts, consumer decisions and public policies. The shift from a unipolar to a multipolar world further complicates the situation, as no single power can take responsibility for making the tough decisions about global action on its own.
Add to that the zero-sum logic of a new Cold War, and systemic change becomes virtually impossible. And the intensification of tribalism makes this outcome more and more likely. For example, China views US concerns over its actions in Xinjiang, Tibet, Hong Kong and Taiwan as nothing more than an attempt to undermine its sovereignty. Diverting resources from the fight against national inequalities towards the pursuit of an arms race is a tribalist response.
Beyond fueling competition from the great powers, tribalism has made rational negotiations more difficult at the national and local levels. As Amy Chua, Reuben E Brigety II, and others have observed, tribalism has fractured American politics, fueling social polarization and leading to deadlock on many pressing issues. The gutting of the Biden administration’s $ 5.4 billion spending plan is one example. When it comes to climate action, the deadlock at the national and global levels is a nightmare scenario.
To understand how to counter tribalism, we must first ask ourselves why it is gaining ground. The surge in decolonization after WWII and the collapse of the Soviet bloc after 1989 doubled the number of sovereign states from just over 100 in 1945 to nearly 200 in 2020. Between 1950 and 2018, the world population has tripled. And while per capita income has more than quadrupled, the gains have not been distributed evenly – far from it.
In 2018, the world’s 2,000 largest state-owned enterprises held $ 189 trillion in assets, or 2.2 times global GDP. They had a market value of $ 56.8 billion, or two-thirds of global GDP. Today, the richest 26 people in the world have as much wealth as the poorest half of the world’s population. While the wealthiest have gained an increasing share of income, wealth, power and privilege, the incomes of middle and working class households have stagnated in many places.
Growing inequalities and economic insecurity have fueled popular frustration, contributing to the rise of tribalist political movements around the world. Much of the world is now stuck in a vicious cycle of social polarization, environmental degradation and civil strife.
In light of this, as UN Secretary-General AntÃ³nio Guterres said last year, inequality is the defining problem of our time, and any effort to tackle climate change must be principled. of justice. In fact, to overcome tribalist resistance to political action, countries will need to go further, negotiating – and implementing – a new social contract.
But that won’t happen until COP26. The question now is whether a tribal-divided United States can agree to rules of engagement with China. And, after Donald Trump’s disruptive presidency, the Chinese remain concerned that any deal with Biden could change if he loses his majority in Congress next year.
As tribalism hinders progress nationally and globally, many cities and small communities are taking matters into their own hands, sometimes with private funding. This is certainly welcome and testifies to the value of strong local leadership. But to overcome a challenge like climate change, effective national and global policies will also be needed.
Negotiating a new social contract will be a long and difficult process. But it is essential to counter tribalism and avoid a future of conflict between great powers and uncontrollable climate change. – Project union
? Andrew Sheng is Distinguished Fellow at the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Board on Sustainable Finance.
? Xiao Geng, Chairman of the Hong Kong Institution for International Finance, is Professor and Director of the Institute of Policy and Practice, Shenzhen Finance Institute, Chinese University of Hong Kong, Shenzhen.