The Climate Club is an international initiative aimed at promoting global cooperation in reducing greenhouse gas emissions and accelerating decarbonization, particularly in high-emitting industries and developing economies. Launched in 2022 by the G7, the Climate Club focuses on facilitating collaboration between countries, industries, and other stakeholders to achieve the goals outlined in the Paris Agreement and limit global temperature rise to 1.5°C.
A climate club is a coalition of the willing among countries that wish to adopt more stringent climate mitigation policies. Sometimes the term is used loosely to refer to any such international climate alliance. However, the concept of a climate club has most famously been promoted in a stricter sense by William Nordhaus, winner of the 2018 Nobel Memorial Prize in Economics.[1][2] In his conceptualization, the climate club introduces carbon pricing among the club's member states and levies a fee on all imports of goods from countries that are outside the club and have not introduced similar carbon pricing. This is expected to encourage more countries to join the club and introduce carbon pricing.[3]
A 2025 paper in Econometrica found the kind of climate club that Nordhaus advocated for, with border taxes to deter free-riding, "can achieve 33–68% of the globally optimal carbon reduction, depending on the initial coalition (EU, EU + US, or EU + US + China)."[4]
The G7's version of the Climate Club differs slightly, focusing on partnerships and cooperative approaches rather than punitive measures. The idea of a Climate Club originated from efforts to bridge the gap between developed and developing nations in climate action. Spearheaded by the G7, particularly under the leadership of Germany's ChancellorOlaf Scholz, the initiative was announced in December 2022 during the G7 summit.[5][6] It is designed to foster international cooperation in decarbonization while avoiding protectionist trade policies and carbon leakage (the relocation of carbon-intensive industries to countries with looser regulations).[7] Furthermore, it is invisigaged that trading partners support each other in the transformation of the industrial sector, in the production of hydrogen, ammonia, crude petrol, methanol and synthetic fuels.[8]
Structure and Membership
The Climate Club is a voluntary coalition of countries and partners committed to advancing industrial decarbonization and strengthening climate cooperation. In 2022, the founding members were: Germany, France, Italy, Japan, Canada, United Kingdom, the United States and the European Union.[9] The climate club is open to other countries, and an invitation to developed as well as other emerging economies and developing countries, can be sent upon request.[10]
The Global Matchmaking Platform is expected to be launched by the United Nations Industrial Development Organization in collaboration with the Climate Club at COP29 in Baku. This unique initiative is dedicated to accelerating the decarbonization of heavy-emitting industrial sectors in emerging and developing economies. As the first platform specifically focused on connecting countries with global technical and financial assistance, it provides support to enable industrial sectors to transition to low-emission and zero-emission practices. By addressing country-specific needs, the platform matches countries with a network of delivery partners, facilitating the transfer of innovative technologies, investment opportunities, and policy guidance to drive the decarbonization of energy-intensive industries like steel and cement.
Criticism
Concept
The idea of a climate club has been criticized by countries that fear the imposition of fees on their exports as well as by researchers who are skeptical of carbon pricing in general.[11] Others have argued that some of the supposed losers, such as China and India, will actually gain from a climate club and the resulting introduction of carbon pricing.
The EU's Carbon Border Adjustment Mechanism (CBAM) has been labeled as the possible beginning of a climate club.[12][13][14] Others see CBAM as too narrow to function as a climate club.[15]
Climate Club
When presenting the proposal, Scholz's proposal has been criticized as vague.[16] The journalist Petra Pinzler criticized the Climate Club as an expression of the "Janus-faced behavior" of the Scholz cabinet, because Germany is simultaneously hindering ambitious progress and, as a result of the Russian war of aggression against Ukraine, is interested in developing new gas sources worldwide. In addition, the Climate Club lacks member states (as of May 2023), which is why it is more like an 'association for the promotion of green industrial transformation'.[17]
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Chile (co-chair)
Germany (co-chair)
Argentina 
Australia 
Austria 
Bangladesh 
Belgium 
Canada 
Colombia 
Costa Rica 
Croatia 
Denmark 
Egypt 
European Union 
Finland 
France 
Greece 
Indonesia 
Ireland 
Italy 
Japan 
Kazakhstan 
Kenya 
South Korea 
Luxembourg 
Malaysia 
Morocco 
Mozambique 
Netherlands 
New Zealand 
Norway 
Peru 
Poland 
Singapore 
Slovakia 
Spain 
Sweden 
Switzerland 
Thailand 
Turkey 
Ukraine 
United Kingdom 
United States 
Uruguay 
Vanuatu