Towards an inclusive climate alliance with a balance of carrots and sticks policy bief

As G7 countries generate 25% of world greenhouse gas emissions, an open and cooperative G7 climate alliance can accelerate international climate policy in a transformative and inclusive manner. Building upon a proposal of the German Government (2021), we propose the following design elements for such an alliance:
1. Membership conditions that benefit all members and are sufficiently ambitious to enable a pathway to genuine ‘net zero’
2. Apply a ‘carrot and stick’ approach based on Article 6 and a differentiated CBAM to encourage alliance participation
3. Use a ratcheting mechanism to raise ambition.