Middle Powers are Finding their Green Voice

On May 11, G7 finance ministers and central bankers met in Niigata, Japan. Central bankers and financial regulators are particularly concerned with supporting and financing sustainability efforts, Japan being a key proponent of this push. Interestingly, Japan even extended invitations to emerging countries like Indonesia, India, South Korea, Singapore, and Brazil. These invitations show Japan’s desire to become a proactive leader amongst the G7 as well as middle powers, as its leadership in sustainability efforts can further expand its sphere of influence in today’s age of distracted great powers.

In the past few months, the world has seen a great power vortex amidst the U.S.-China rivalry, the war in Ukraine, the shift towards “de-dollarization,” and European populist movements threatening united democracies. American centrality and EU growth have become less apparent in many parts of the world, especially in the Indo-Pacific. However, amidst all the great power chaos and bickering, an unlikely cohort of middle powers has seized the mantle of leadership and leveraged their positions in regional politics to forward their national interests.

Rather than forwarding their own visions for the world, they champion universally endorsed ideas and cite existing norms to elevate their standing beyond what is typically expected of middle powers. Now, the middle powers are having their moment, and leadership in environmental sustainability is how they’re doing it.

In March, Canada unveiled its new $43 billion federal budget. One component stood out as the most consequential in recent history: its huge investment in clean energy.

Major points include at least $20 billion for clean power and clean power infrastructure, $25 billion worth of clean electricity investment tax credits over the next ten years, over $94 million to flood safety and resilience, and more than $3 billion over 13 years to specific smart energy projects. The budget explicitly states that “Canada is currently competing with the United States, the European Union, and countries around the world for [their] share” of the investment in clean resources. Evidently, Canada is attempting to take the lead in sustainability.

Though motivated by environmentalism, Canada’s decision to become much more invested in this area is also undoubtedly driven by its desire to “show up” and be a “reliable partner,” as Mélanie Joly, Canada’s foreign minister, stated. Ever since Canada’s rollout of its strategy for the Indo-Pacific last November, the country has made a larger effort to become a more serious global player. Canada’s newfound leadership amongst middle powers, has been further incentivized by the erosion of great power hegemony.

Middle powers leverage multilateral institutions and notions of moral stewardship to restrain great powers while projecting their own influence. This tactic is the most apparent and relevant in the field of climate leadership. Regional players such as Canada and Japan understand that decarbonizing their economies, creating cutting-edge renewable energy technology, and developing innovative infrastructure produce domestic benefits and higher international standing. As a result, they can gain greater influence in setting industry norms and driving conversations within international institutions.

Japan is a prime example of a middle power using these tools, as it is becoming an indispensable nation in the Indo-Pacific. Tokyo has long been a leader in sustainable technology development, setting comparatively aggressive carbon net-neutrality targets and mandating climate emissions disclosure. From 2010-2019, Japan produced more renewable energy patents than any country in the world, coming in at just over 9,000. Furthermore, Japanese companies are world leaders in emissions reporting. In 2022, 3,400 companies pledged support to the Task Force on Climate Disclosure, and 843 were headquartered in Japan.

The great power vortex has allowed Japan to capitalize on its long-established leadership in sustainability and has elevated the country to a level of global influence. With G7 financial regulators and core backers of ESG attending countless meetings in Hiroshima, the site of this year’s G7 summit, it is clear that no conversation about global norms can be complete without Japan.

Indonesia is another example of a middle power utilizing green energy as a tool for international influence and centrality. Jakarta aims to promote peace and prosperity in its respective region by maintaining strong relations with diverse powers, be it China, the U.S., Singapore, or Japan. Like Canada and Japan, Indonesia has begun to tap into green energy to further its leadership position. Although Jakarta may not have the economic and technological strength of Tokyo or Ottawa, it understands its essential role in the global supply chain, particularly when it comes to manufacturing.

Accordingly, Luhut Binsar Pandjaitan, the government minister in charge of maritime affairs, recently announced Indonesia’s intent to become “one of the top three countries in the world producing EV batteries as well as electric cars” by 2027. Earlier this month, the government signed new lithium trade deals — with Australia, the U.S., and Japan — that will be pivotal in its growth as a central player in the electric vehicle market.

With sustainability becoming a core global issue and green technology a lucrative and prestigious commodity, ambitious leadership on these issues is a foreign policy asset. The U.S., China, and the EU are no longer the sole authority in the international sustainability dialogue. Middle powers are now essential players in the G7 and beyond. Less developed middle powers like Indonesia understand that if they can achieve their green energy goals, they will become an authoritative voice on the world stage. In a world of distracted great powers, rising middle powers understand that sustainability leadership can level the playing field and pave the way to global influence.