Keywords

Introduction

Climate finance is an increasingly important issue for international cooperation of established actors such as Germany and emerging actors such as the Republic of Korea (hereafter referred to as Korea) as well as their claims of global leadership in the green energy transition. Climate politics, on the one hand, involves national policies on green energy transformation to a great extent and is therefore “motivated by domestic economic priorities, the global pressure for competitiveness, and the desire to secure better positions in global production and trade networks” (Allan et al., 2021, p. 4). On the other hand, governance of climate requires cooperation, in which highly industrialized developed countries are expected to take responsibility, for example, for addressing the challenges faced by vulnerable developing countries.

In this chapter, I explore the domestic and international linkages in the climate politics of established and emerging powers, drawing on the cases of Germany and Korea. The motivations behind the stances of the governments of Germany and Korea on international climate finance have aligned in terms of supporting global green energy transition and aiding developing countries in climate change efforts. Despite this convergence, the driving forces behind these positions differ. The German government blends ideational and material interests-driven aspects in its position, emphasizing collective responsibility along with a strong emphasis on renewable energy and nuclear phase-out; whereas the Korean government takes an economically driven approach that, alongside renewables, focuses on cooperation in nuclear energy that benefits its domestic sectors. Recognizing these differences highlights the need to understand domestic–international connections in climate finance and identify variations in national-level climate policies.

Emerging and Established Powers in Climate Cooperation

The main debates in international efforts to mitigate climate change centre on two issues: The first concerns nationally determined contributions (NDCs), such as strategies to reduce CO2 emissions or to shift energy supplies to sustainable energy sources. The second is about compensating, through climate finance, for the damage faced by vulnerable developing countries. The latter is particularly important for determining the global responsibilities in climate cooperation.

On matters of climate governance, both established and emerging power positions seek to find a balance between economic growth and climate change mitigation. This has been a key concern in particular for emerging powers. On the one hand, they have been reluctant to make environmental protection commitments that could hinder their economic growth potential, while, on the other, they have taken the position that highly industrialized countries have historical responsibilities for climate change and should allocate more resources for climate finance (Destradi & Jakobeit, 2015). Established powers, such as European states, whose emissions from their industrialization processes have historically exacerbated climate change, emphasize the burden-sharing purposes in their international cooperation on climate matters. In their aid strategies, however, they tend to combine assisting developing countries (and thus addressing their needs) with medium- and long-term interest-driven strategies regarding the provision of global public goods or their export interests (Baydag & Klingebiel, 2023). Besides economic concerns, challenges stemming from European and global crises, such as Russia’s war in Ukraine or the Covid-19 pandemic, have caused substantial shifts in state preferences towards more nation-centred and security-oriented policies. The importance of, or priority given to, climate mitigation has reduced vis-à-vis the concerns for securing one’s energy supply and fighting against rising energy prices (Feist & Geden, 2023).

In light of these issues, the variations in the positions of established and emerging powers in international climate cooperation can be observed during the negotiations at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP). The main debates at COP27 in 2022, for instance, concentrated on creating a dedicated multilateral fund for climate finance and the question of who should take (more) responsibility for financing poorer countries to help them mitigate the damage caused by climate change, i.e. the loss and damage fund. The problem was mainly with the UNFCCC’s developing country categorization, which has not been updated since the 1992 Climate Convention. This raised the issue of free riders, as it includes a long list of countries ranging from particularly climate-vulnerable ones (e.g. small island states) to emerging economies that are now among the largest CO2 emitters (e.g. China). As a result, negotiations on creating the fund provoked a strong reaction from European states such as Germany. They oppose the categorization of emerging economies such as China, Korea and Singapore—which have become significant emitters due to their rapid industrial growth—as developing countries on the grounds that it prevents climate finance from benefiting countries that need it most (The Economist, 2022). Furthermore, the European position has also emphasized the responsibilities of emerging economies such as China and Gulf petrostates in financing poorer countries (Harvey, 2023). Similarly, at COP28 in 2023, the reluctance of oil-producing countries led to a consensus only on a transition away from fossil fuels towards renewable energies rather than a more stringent phase-out plan. Furthermore, during COP28, 22 countries, including the US, some European countries such as the UK and France, as well as emerging economies such as Korea pledged to increase their nuclear energy capacity to help achieve rapid decarbonization by 2050 (Gross, 2023). On nuclear power, Germany singles itself out from other established powers because of having finalized its nuclear phase-out in 2023.

The examples demonstrate that issue-specific governmental positions in climate negotiations go beyond the categorizations of positions based on established and emerging powers, but rather stem from their national preferences. While certain divergences in governmental positions that broadly define these categories have persisted (e.g. controversies on who should take more responsibility for the multilateral climate finance), convergences in positions can also be observed (e.g. promoting nuclear energy for decarbonization). Furthermore, they also diverged from their respective groups in certain aspects (e.g. Germany’s non-nuclear commitments vis-à-vis other established states).

Ideational and material interest-driven motivations have somewhat converged in the positions of the governments of Germany and Korea towards international climate finance, for example, towards the necessity of a global green energy transition and responsibility in financing developing countries in their efforts to tackle climate change. Although this might imply a lessening of differentiations in terms of positions among the established and emerging group of actors, the motivations as drivers of these preferences have nevertheless differed significantly. Accordingly, the German government has taken a mixture of ideational and material interest-driven positions in assisting developing countries that both emphasized collective action of advanced and emerging economies and pursued the domestic interests of the renewable sectors in green energy transition. The Korean positions followed a more pragmatic economic interest-driven approach, giving more weight to nuclear energy as an important source of clean energy while pointing to energy security and sector interests, in addition to renewable energy. This calls for the importance of domestic–international linkages in climate finance and the identification of the main differences in national-level climate policies.

International Climate Finance and Domestic Politics

Broadly speaking, my starting point is that international commitments hinge on the dynamics of domestic politics. Due to limitations imposed by domestic politics, the likelihood of establishing a consensus in climate negotiations significantly depends on the level of support from the domestic public and elites (Keohane & Oppenheimer, 2016). Governments of both established and emerging powers are expected to align their national climate targets with international commitments. In consequence, while national strategies shape commitments of states towards international climate finance, discrepancies between those two may hinder multilateralism (Etzioni, 2018).

The main argument in this paper lies on international political economy (IPE) approaches concurring on two key points concerning domestic preference formation (Katzenstein, 1977; Milner, 1997; Moravcsik, 1997). First, grounded in the concept of democratic representation, these approaches assume government responsiveness, asserting that governing politicians tend to align their policies with voter preferences in order to retain office. However, this responsiveness is not absolute, as it is limited by factors such as interest-group influence and bureaucratic constraints. The state as a representative institution is subject to constant capture and reconstruction by social coalitions. Governments incorporate dominant societal preferences into their policies to appeal to a crucial segment of society. In essence, state preferences reflect the interpretations of powerful domestic groups on security, welfare and sovereignty. Second, IPE approaches challenge the assumption that states inherently prioritize their interests, particularly those related to power and security, which are often considered fixed or uniform (Milner, 1997; Moravcsik, 1997). This critique extends to power-centric realist perspectives and rule-based institutionalism, which predominantly emphasize systemic factors like power distribution or the role of international institutions, and overlook the impact of domestic elements on shaping the policy preferences of nation-states and, consequently, international outcomes. As such, a domestic politics perspective offers a more nuanced understanding of state preferences by highlighting the intricate dynamics of domestic politics.

From this domestic politics perspective, international climate finance strategies of German and Korean governments are argued to follow their national-level policies. In other words, the roles of demands of domestic sector groups and ideational expectations in the society in shaping the German and Korean green energy transition—as well as possible interplay among these domestic factors in policy processes (Schirm, 2020)—is decisive for the international commitments of the two governments. First, climate policy, or “policy change” through energy transition (Hochstetler, 2020), has distributional consequences in domestic politics due to several industrial strategies that concern sectors such as those in conventional and renewable energy. In addition, governments want to secure the energy supply for their domestic industries. Second, green industrial policies have distributive implications for voters (Allan et al., 2021) and therefore touch upon “path-dependent, value-based societal expectations” and “general societal interests” (Schirm, 2020), creating dichotomies, such as expectations from the government in environmental protection vis-à-vis economic growth. Furthermore, these policies are also expected to significantly follow domestic institutions and socio-economic structures that inform decision-making (Hochstetler, 2020; Kalinowski, 2020). As such, certain groups and individuals in the society, who are likely to be potential beneficiaries, will support the government’s policies on climate mitigation, whereas some others will resist it. Both governments would not risk their term in office and therefore avoid climate policies that run counter to the dominant expectations in the society.

The German and Korean governmental positions on international climate cooperation in green energy transition reflect domestic political dynamics. In the next section, I briefly examine the role of domestic ideas in their commitments to solidarity with climate-vulnerable countries and the impact of nuclear power strategies on their support for green energy transition cooperation as illustrative cases. Due to the constraints on the length of the chapter, a comprehensive analysis of domestic preference formation is reserved for future work. I look at the divergences from the perspective of their domestic strategies, which are assumed to reflect certain value-orientated perceptions and/or material economic interests of groups and individuals.

German and Korean Positions Towards International Climate Finance

In international climate finance, the positions of German and Korean governments are in line with their national strategies on green energy transition. These seem to converge in some ways (e.g. investing in hydrogen energy and financing projects in developing and emerging countries), yet follow opposite directions in significant aspects. One of those stems from the ideational differences in terms of how the government defines its global responsibilities in climate governance. German governmental commitments focus on solidarity with the most vulnerable developing countries, whereas the Korean position concentrates more on the cooperation aspect. Concerning the contributions of emerging economies to the loss and damage fund, as debated in the COP27—which closely concerns Korea—the Yoon administration has not taken an explicit position but rather adopted a rhetoric on assisting climate-vulnerable countries as well as increasing green official development assistance (ODA) to them. This seems to have contradicted Korea’s official position that emphasized Korea’s ameliorated status as an advanced country since its membership to OECD Development Assistance Committee in 2010. The German governmental position, on the other hand, emphasized “the very special responsibilities” of industrialized countries, as well as of those emerging economies “among the biggest emitters today” in climate action (Scholz, 2023). In addition, the case of Germany also demonstrates certain shifts in how established powers define their role in international climate cooperation. The government emphasized Germany’s efforts as a “bridge-builder” between industrialized and developing countries (German Federal Ministry for Economic Cooperation and Development, no date)—a so-called “middle power” position that has long dominated the narratives of the governments of middle-sized emerging powers such as Korea and Turkey (Baydag, 2021; Cooper & Schulz, 2023). This suggests that certain ideational dimensions in the cooperation approaches of emerging powers with developing countries are no longer unique to them. Stressing Germany’s efforts for solidarity with developing countries, the speech of the German Development Minister stating, “The new fund for climate-related loss and damage within the official UN climate regime shows that we have managed to build bridges between industrialized and developing countries […]”, is illustrative in this respect (German Federal Ministry for Economic Cooperation and Development, no date).

Strong public support for international efforts for climate change mitigation can be observed in the domestic politics of both countries. The majority of Germans (58%) and Koreans (68%) believe that “actions taken by the international community will significantly reduce the effects of global climate change” (Pew Research Center, 2021). In climate negotiations, sharing responsibilities among advanced and emerging economies in providing for the climate-vulnerable developing countries was more pronounced in the German position in climate negotiations in the creation of the loss and damage fund, whereas the Korean government was broadly reluctant to share the responsibility. In line with the official German position, approximately 70% of Germans think “all countries should work together and share the responsibility of tackling climate change” (YouGov, 2023). When path-dependent domestic ideas are considered, societal expectations on collective solidarity vis-à-vis individual responsibility explains differences in the positions. For instance, the data from World Values Survey indicates that more Germans (45%) than Koreans (21%) think, “incomes should be made more equal” vis-à-vis “greater incentives for individual effort” (Haerpfer et al., 2022).

Another divergence stems from what clean entails in the energy transition policies of both governments and their climate cooperation for this purpose. The German governmental position in climate negotiations emphasized “sustainable, socially just, global energy transition and the decarbonization of industry” (German Federal Ministry for Economic Cooperation and Development, no date). As stated by the German Foreign Minister, it must be recognized that “the vast majority of countries around the world are committed to a future with solar and wind power, not oil and coal” (German Federal Ministry for Economic Cooperation and Development, no date). The German position excludes nuclear energy in the clean energy mix, while expanding solar and wind. The Korean climate cooperation, in contrast, significantly includes nuclear power (along with renewables) as providing clean, pragmatic and secure solutions in assisting countries that seek to reduce greenhouse gas emissions and sustain energy security (Lee, 2023). As President Yoon stated,

Korea will not only harness renewable energy but also extensively employ high-efficiency carbon-free energy (CFE), such as nuclear power and hydrogen, as a realistic measure to hasten our pursuit of carbon neutrality. We also plan to share these energy sources with countries vulnerable to climate change, ensuring they too can benefit. (Yoon, 2023)

To this end, President Yoon announced that “Korea will launch a ‘Carbon Free Alliance’, an open platform that anyone in the world can join to promote the adoption of carbon-free energy” (Yoon, 2023). This platform obviously includes a significant portion of nuclear energy cooperation to be carried out also with industrialized countries, and is considered to ensure being able to meet sector-specific targets and international pledges in the green transition (Ministry of Environment of the Republic of Korea, 2022).

The German policy on the green energy transition can be partly explained by a strong public opposition to nuclear energy dating back to the 1970s, based on concerns for the dangers it poses. In 2023, the German government completed the nuclear phase-out, which was legally adopted in 2011 with a broad consensus in the domestic politics (Quitzow & Thielges, 2022). The phase-out of nuclear power, as well as expansion in renewable energy in order to generate 80% of the country’s electricity by 2030, was justified by the government as “safer”, given the uncontrollable risks of nuclear power (German Federal Ministry for the Environment Nature Conservation Nuclear Safety & Consumer Protection, 2022). However, as the German strategy of transition to 100% renewables still has a way to go, the alternatives are not necessarily sustainable or environmentally friendly. After the start of the Russian war on Ukraine and the resulting reduced gas flows from Russia, Germany had to reactivate coal power plants (Connolly, 2022). Its strict policy on renewables and environmental protection were therefore suspended when domestic industry interests were at stake. The crisis has, nevertheless, not led to a turning back to nuclear power, as in the case of Korea, which also suggests the persistence of anti-nuclear ideas in energy policymaking.

In Korean domestic politics, interests seem to be more prevalent in Korea’s climate cooperation. For instance, along with distributing renewable energy, hydrogen and other such zero-carbon energy sources, the government increased Korea’s nuclear power generation target in 2023 and abandoned the nuclear phase-out plan of the previous government due to energy security (Korean Ministry of Trade Industry & Energy, 2023). The Korean strategy mainly focused on reducing the country’s energy dependence on fossil fuels by increasing the share of nuclear power in the power mix to at least 30% by 2030 (Korean Ministry of Trade Industry & Energy, 2022). In this respect, the government follows a pragmatic approach, which rests on the idea that “carbon neutrality must be accompanied by innovations and technological developments in the environment-friendly and new and renewable energy sectors because it must not become a burden for our industries”, as articulated in President Yoon’s statements (The Korea Times, 2022). The government emphasized the discrepancy between following a national-level climate policy based on a nuclear phase-out plan and Korean international cooperation, which heavily invests in nuclear power plant infrastructure projects overseas. The shifts in energy policy after a governmental change evidenced the persistence of the ideas of “economic developmentalism” in the process of determining the energy mix, despite public opposition to nuclear power (Cho et al., 2023; Chung & Kim, 2018). As the examples above show, while both Germany and Korea share the common goal of supporting the global transition to green energy and financing developing countries in international climate policy, the motivations behind their stances differ significantly. The explorative cases have highlighted the need for a comprehensive understanding, both conceptually and empirically, of the linkages between the national and international spheres in governmental preference formation.

Conclusion

In this chapter, I examined the preferences of established and emerging powers, using the examples of Germany and Korea, emphasizing that the diverging domestic forces shaping the green energy transition strategies of German and Korean governments explain variations in their position towards international climate finance. Ideational motivations in international climate cooperation reflect value-based domestic ideas, while the role of nuclear energy in the global green energy transition is in line with national-level priorities shaped by diverse domestic ideas and economic interests. The case studies underscore the substantial impact of national strategies on international climate finance. While some differences align with existing categorizations in the literature on established and emerging countries, a nuanced understanding of their international cooperation in global climate governance emerges when viewed through the lens of domestic politics.