Scholz pitches 'climate club' as Ukraine war gives push to green G7 goals

German chancellor says environmental aims more urgent than ever

Olaf Scholz addressed the Global Solutions Summit in Berlin on Monday. AFP

German Chancellor Olaf Scholz said on Monday that the war in Ukraine had strengthened the case for the green transformation he is pushing in the G7 as he pitched his idea of a global “climate club” of eco-friendly economies.

Mr Scholz said the climate-focused priorities set by Germany for its G7 presidency this year had become “ever more urgent” as the war in Ukraine prompts a scramble in Europe to move away from Russian fossil fuels.

Germany itself is one of the countries hurrying to make that switch after its plans to use its heavily Russian-supplied gas imports to fill the gap left by coal and nuclear were upended by the invasion of Ukraine.

Speaking to the Global Solutions Summit, held once a year in Berlin to provide recommendations to G7 and G20 leaders, Mr Scholz said the show of western unity prompted by Russia’s invasion was a chance to tackle global problems such as climate change.

But he said finding a consensus in institutions such as the UN and G20, two institutions in which Russia is a prominent member, would “not become easier” in what diplomats are calling a changed geopolitical climate.

In such an atmosphere, Mr Scholz argued, rich democracies who need “partners far beyond the G7” to tackle climate change should form a new coalition of countries willing to agree to ambitious environmental standards.

These should include countries in Africa and the Indo-Pacific, he said as he promised to put technology transfers and finance for developing countries on the table to tempt them into joining the group.

Mr Scholz spoke of an “enormous task” to meet the Paris Agreement’s goal of limiting global warming to 1.5°C above pre-industrial levels, with scientists predicting a surge in natural disasters if that threshold is breached.

Schloss Elmau in Bavaria, Germany, will host the G7 summit in June. AFP

“An international climate policy based on the lowest common denominator will not achieve this,” said Mr Scholz in his address on Monday.

“Instead of waiting for those who are the slowest, we will therefore move forward together with those that are the most ambitious.”

Mr Scholz will try to win backing for the climate club from the leaders of the US, Britain, France, Italy, Canada and Japan when he hosts them at the G7 summit at a Bavarian retreat in June.

He described his proposed club as an international market that protects climate-friendly countries from being undercut by less environmentally minded competitors.

This would involve agreeing on a common approach to decarbonising industry to “prevent companies from migrating to countries with a lax climate policy”, he said.

The idea is similar to the G20’s decision to establish a minimum corporate tax rate to stop companies using tax havens to avoid filling government coffers.

Mr Scholz, who was Germany’s finance minister under Angela Merkel until he moved to the chancellery in December, was one of the leading advocates of that move.

He said a climate club would complement rather than replace other international forums such as the rolling UN-sponsored climate talks that will culminate in the Cop27 summit in Egypt this year.