International Climate Diplomacy and the impacts of the Inflation Reduction Act - Policy Forum with Barbara Botos, Hungary's Ambassador-at-large for Climate

We invited Dr. Barbara Botos, Hungary’s Ambassador-at-large for Climate to our Policy Forum on March 27 to discuss the most recent European developments in climate policy.

Dr. Botos, started her presentation by introducing the key topics of the two UN Framework Convention on Climate Change conferences in the last two years: COP 26 in Glasgow, Scotland in 2021, followed by COP 27 in Sharm El-Sheikh, Egypt.

Regarding the major outcomes of COP26, she listed the adoption of the Glasgow Climate Pact (a pledge to phase down coal), and the agreement on the goal to maintain the 1.5-degree target set in the Paris Agreement. She also emphasized that it urged the Parties to double funding for climate adaptation and it layed down the rules of the international emissions trading mechanism.

Barbara Botos


She continued her presentation with COP27. Related to this she said that it concluded with progress in several areas including adaptation, mitigation, financing as well as technology and Global Stocktake. There was, among others, a high-level ministerial roundtable on pre-2020 Ambition and adoption of the Mitigation Work Program (aimed to reduce or prevent emission of greenhouse gases). Besides, governments established new funding arrangements, as well as a dedicated fund, to assist developing countries in responding to loss and damage. It was also announced that Countries representing over half of global GDP launched a package of 25 new collaborative actions at COP26 to be delivered by COP28 to speed up the decarbonization under five key breakthroughs: power, road transport, steel, hydrogen and agriculture. Furthermore, UN Secretary General, António Guterres announced a USD 3.1 billion plan to ensure everyone on the planet is protected by early warning systems within the next five years. (This is an important step as the number of recorded disasters has increased five-fold, driven in part by human-induced climate change and more extreme weather - according to World Meteorological Organization’s (WMO) data.)

She then also touched upon the Inflation Reduction Act, the biggest and most important climate bill in the history of USA offering funding, programs, and incentives to accelerate the transition to a clean energy economy.  The roughly €350 billion IRA with the aim to build a new green economy by a broad range of subsidies, incentives, and domestic manufacturing requirements raised serious concerns that it would disadvantage European businesses.

In response, the European Commission has set out its own “Green Deal Industrial Plan” providing $272 billion for green transition coupled with the significant relaxation of the EU’s state aid rules when it comes to investment in green technology. It also provides workforce training. The EU hopes these measures will prevent companies from shifting manufacturing to other countries and will accelerate Europe’s goal of becoming the first climate-neutral continent by 2050.

In addition to the mentioned forums and decisions on climate change, she also addressed biodiversity noting the major outcomes of COP15, the United Nations Biodiversity Conference in Montreal, Canada such as the Kunming-Montreal Global Biodiversity Framework. The strategy’s main objectives to be achieved by 2050 include maintaining, improving, or restoring the integrity, connectivity and resilience of all ecosystems and maintaining genetic diversity.

She also said that Hungary has unique biodiversity with about 42 000 animal and 2 200 higher plant species in the Pannonian biogeographical region, but the global trend of biodiversity loss is unfortunately also observed in the country. She then added that Hungary had elaborated a National Biodiversity Strategy focusing on three major areas, on reducing threats to biodiversity, the sustainable use of biodiversity and benefit sharing as well as on tools and solutions to support implementation. She then highlighted that involving businesses in the preservation of biodiversity would be of a strategic area of action, therefore, biocredits, credits similar to carbon credits, which are used to offset greenhouse gas emissions could be a possible solution.