Why Ukraine peace talks are more about talking than peace

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Good morning. This week the newsletter comes to you from Davos, the global elite conference that everyone claims to hate — yet flocks to each year without fail. You can follow the World Economic Forum online with the FT’s Daily Davos Show, and read all our stories from the event here.

Today, I explain the point of yesterday’s Ukraine peace talks in the Swiss ski resort, and our trade supremo reveals an almost immediate impact of the EU’s new carbon border tax: third countries setting up their own versions.

PR war

For western national security officials present at the Ukraine peace talks yesterday in Davos, the main achievement was simple: a bigger, more diverse family photo than last time.

Context: Russia launched a full-scale invasion of Ukraine almost two years ago. Ukraine has a peace plan to end the ongoing war, including a full Russian withdrawal from its land. It launched international talks on that plan in Copenhagen in June last year. Yesterday’s was the fourth meeting.

The good news is that there were more participating countries — 83 — than at the last one in Malta in October. The better news is that a larger number of them were non-western countries. And the best news is that South Africa and Brazil, countries that maintain good relations with Russia, were particularly active in the talks, people briefed on the discussion said.

There was no progress on an actual peace deal. That would also be impossible without Russia, and Russia wasn’t invited.

But that’s not the point.

With war raging in Gaza and threatening to spread in the Middle East, and Russian and Ukrainian troops locked in what looks like a bloody stalemate, Kyiv and its backers are both desperate to maintain attention on the conflict, and keep reminding other countries that Ukraine, not Russia, is the one trying to talk about peace.

“It was a good discussion,” said one person briefed on the meeting. “[But] it’s not in a setting of 83 delegations that you make real diplomatic headway in trying to conjure up the parameters of a peace treaty.”

One negative is China’s decision not to participate. Beijing sent representatives to the Jeddah event in August, but not to the other three iterations. Switzerland’s foreign minister, Ignazio Cassis, admitted yesterday that for the format to succeed in building a global alliance behind Ukraine’s demands, they needed China around the table.

There was no joint declaration of the 83 participants agreed at the talks, nor was any foreign official present at an all-Ukrainian press conference after their conclusion. But neither was planned.

“Each time we meet, the quantity of countries increases,” said Yulia Svyrydenko, Ukraine’s deputy prime minister, after the meeting.

For now, as the war continues to rage with neither side willing to begin negotiations, that’s the key achievement.

Chart du jour: Widening inequality

Rich people in the global north still own most of the world’s wealth, according to a report by Oxfam published today. The non-profit also finds that the EU’s five richest billionaires have increased their wealth by 76 per cent since 2020, from €244bn to €429bn.

Carbon influencers

The EU’s new carbon border tax is starting to have its desired effect: pushing countries to consider charging for emissions domestically to avoid paying it, writes Andy Bounds.

Context: The carbon border adjustment mechanism (CBAM) is designed to prevent heavy industry in the EU, which must pay for emitting carbon, from being undercut by imports from producers abroad who do not. Its pilot phase began in October and manufacturers of six product categories including steel and cement must start paying for their emissions from 2026.

Some countries are now looking at setting up their own emissions trading scheme (ETS) in response. It would mean companies paying domestically for the emissions, instead of paying Brussels.

The European Commission is considering setting up an advisory service to help.

Peter Liese, a European lawmaker involved in the negotiations on the carbon tax, suggested the creation of a cross-departmental task force to deal with queries.

He told the FT that a foreign diplomat had tried to meet officials to understand how they could set up an emission trading scheme that would comply with EU requirements. But there was no one available.

The commission’s climate directorate “is flooded by requests from third countries to learn about our ETS”, Liese wrote in a letter to the commission.

“Helping third countries create an [emissions trading scheme] would be the most effective climate measure ever,” Liese told the FT. “It will save more CO₂ than any of our internal measures ever can.”

Brussels has already assisted China with its plans for an ETS, and officials said they were boosting resources to offer advice to others.

The commission declined to comment.

What to watch today

1. World Economic Forum kicks off in Davos.

2. Eurogroup meets in Brussels.

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