At the Davos Forum, Separate Discussions in the US... 'Solo' Disagreement Over Climate Change Issues

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The 50th Annual Meeting of the World Economic Forum (WEF, Davos Forum) concluded on the 24th (local time). Although a platform was established to seek sustainable capitalist solutions in response to climate change, the event ended without reaching a consensus due to persistent disagreements from the United States.

Donald Trump, the U.S. president undergoing impeachment proceedings, also visited Davos, Switzerland, for the first time in two years, but he was criticized for using the international discussion platform as a stage for domestic politics and U.S. trade and foreign policies, engaging only in verbal exchanges with youth environmental activist Greta Thunberg and the European Union (EU).

The core theme of this WEF was climate change. The WEF pointed out that more than half of the economic value created worldwide is exposed to the risk of natural destruction, warning that ecosystem collapse could soon lead to economic losses. Ahead of the WEF opening, Klaus Schwab, the founder of WEF, emphasized that "we must make stakeholder-centered capitalism the new model" and stressed the need to address climate change from a capitalist perspective.

However, the problem was the United States. Given President Trump's history of denying climate change, it was highly likely that he would express dissent in climate change discussions. In contrast, European leaders such as Christine Lagarde, President of the European Central Bank (ECB), German Chancellor Angela Merkel, and Ursula von der Leyen, President of the European Commission, unanimously emphasized the need for swift action on climate change.

According to CNN, similar clashes occurred during discussions among finance ministers and central bank governors responsible for global economic policy on the final day of the WEF. Steven Mnuchin, U.S. Treasury Secretary and a panelist, expressed the view that long-term improvement plans related to climate change were unnecessary. He said, "We don't want to deceive ourselves," adding, "I don't see a way to model this risk (climate change) over the next 30 years." Secretary Mnuchin also criticized the carbon tax as a "tax on hardworking people."

[Image source=EPA Yonhap News]

President Lagarde disagreed with Secretary Mnuchin's opinion, stating that assessing the impact of climate change risks on financial markets and the economy is very important. She emphasized that this would make the risks predictable, measurable, and mitigable. President Lagarde also stressed the necessity of a carbon tax. At a press conference following a monetary policy meeting the previous day, she mentioned that the ECB would review its monetary policy strategy, focusing on climate change response.

In particular, interest in the 'showdown' between President Trump and Thunberg was high even before the WEF began, as news spread that both would attend. On the first day of the WEF, the 21st, President Trump agreed to participate in the host's proposal to plant one trillion trees. In response, Thunberg strongly criticized that tree planting alone was insufficient and that world leaders were not taking active measures. Following President Trump, Secretary Mnuchin mocked Thunberg the day before, asking, "Is he the chief economist?" and added, "Come back to us after studying economics at university and explain it to us."

Moreover, the United States used the WEF, an international stage, to maximize its own interests. As the U.S. Senate began formal impeachment hearings during the event, President Trump highlighted economic achievements such as the U.S.-China Phase One trade agreement, tax cuts, and deregulation. He also targeted the EU, insisting that trade negotiations be concluded quickly and continued to threaten tariff increases.