Global climate policy is currently at a critical turning point and could shift to fundamentally different forms of functioning. This is due to cross-border carbon taxation in the EU, Trump’s strong opposition to the green agenda, and the unresolved issue of a truly just transition to carbon neutrality for the Global South, writes Valdai Club Programme Director Oleg Barabanov.
In the context of the thirtieth Conference of the Parties to the United Nations Framework Convention on Climate Change (COP30) in Brazil, the topic of combating climate change and a just green transition was once again at the forefront of the global agenda. This always happens at the end of each year, when the annual Conference of the Parties takes place. But this year, climate issues have taken on an additional dimension.
First, this is due to the fact that in 2026, the EU Carbon Border Adjustment Mechanism (CBAM) is scheduled to begin collecting a real “carbon tax” on the most carbon-intensive sectors of the economy, which could have a significant impact on the development of global trade. Second, the position of US President Donald Trump, who openly calls the climate agenda a hoax and strongly opposes it, stands in stark contrast to global concerns about climate change. Trump’s approaches have already been echoed in a number of other countries. Thus, the more or less established, at least verbal global consensus on climate change concerns has been disrupted. This could have a serious impact both on the discussions at COP30 in Brazil and more broadly on the entire climate agenda, particularly regarding financing.
The financial issue is undoubtedly key in all discussions of this topic. First, the introduction of a carbon tax under the CBAM in the European Union has set off a near-chain reaction of similar regulations in other countries. A similar mechanism is planned for implementation in the UK as early as in 2027. But even more importantly, similar measures are being seriously discussed in Beijing, with 2029 being cited as a possible start date for the Chinese carbon tax. Similar discussions are already on the agenda or will soon be included in other major countries of the Global South, if only because the EU’s CBAM mechanism provides countries that introduce a similar and (importantly) verifiable carbon regulation mechanism with either a complete exemption from the EU tax or significant concessions. Given the importance of the European market for exporters in many countries, a chain reaction of national carbon taxes seems quite likely. Only Trump could prevent this, if he imposes new tariffs and duties of up to a hundred percent or more on imports from both the EU and other countries that introduce cross-border carbon taxes. Thus, Trump is essentially the final barrier to a carbon tax becoming a global reality.
All this leads to the fact that the issue of finances in ensuring a just green transition is, perhaps, the key one. Without its resolution, the steps being taken can only worsen the inequality between developed and developing countries, and ultimately undermine their right to development.
Developing countries’ alternative proposals are largely based on the historical responsibility of Western countries for anthropogenic emissions, which have contributed to climate change since the beginning of the Industrial Revolution in the West in the 19th century. Specifically, they propose calculating what have been called trans-temporal carbon budgets, quantifying how many emissions each country has made not in recent years, under the Kyoto and Paris control mechanisms, but throughout its entire history, since the beginning of the Industrial Revolution. This argument from developing countries is closely linked to the basic premise that Western countries have been uncontrollably polluting the atmosphere and water for a century and a half for their own economic development, and are now essentially hindering the industrial and agricultural development of countries in the Global South. This raises a much broader question about the just completion of the decolonisation process.
According to the logic of this approach to trans-temporal carbon budgets, Western countries have long since exhausted all possible emission limits and are deeply disadvantaged in this context. Developing countries, particularly the poorest ones, whose actions were insignificant, are perfectly capable of continuing their emissions even now, as their trans-temporal limit is far from exhausted. This approach is also quite popular in Brazil, the host country of the current Conference of the Parties. However, for obvious reasons, this idea of a trans-temporal carbon limit is met with absolute rejection by Western countries. Indeed, it is far easier to introduce a trans-border carbon tax now than to acknowledge, not only verbally but also through concrete financial means, their primary responsibility for anthropogenic climate change.
The Brazilian presidency is currently working hard to ensure that COP30 agrees on a new strategic document, which, due to the host country, is known as the Belem Action Mechanism for a Global Just Transition (BAM). However, there are concerns that, due to the position of Western countries, it could once again be reduced to a series of promises and the inclusion of ever-greater aid figures, which, unfortunately, are unlikely to be implemented in practice.
Related to this is another issue that Western countries are resisting: taking into account the absorption capacity of forests and wetlands in a given country when calculating the green transition and achieving carbon neutrality. The host country of this conference, Brazil, with its vast Amazon forests, has obvious reasons to seek to include absorption in carbon neutrality figures. But even here, a serious struggle lies ahead.
Overall, in our view, global climate policy is currently at a critical turning point and could shift to fundamentally different forms of functioning. This is due to cross-border carbon taxation in the EU, Trump’s strong opposition to the green agenda, and the unresolved issue of a truly just transition to carbon neutrality for the Global South.
