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G20 Leaders strike deal on climate – E3G responds

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G20 Summit | Rome, 30 October 2021 Image via Flickr: paulkagame
G20 Summit | Rome, 30 October 2021 Image via Flickr: paulkagame
  • G20 Leaders struck a deal on climate today in a clear sign that their common goal is to keep temperature rise of 1.5C within reach.
  • They agreed to hit net zero by or around mid-century, and committed to take further action in the 2020s, including enhancing 2030 NDCs. 
  • Overall the G20 deal injects momentum into the COP26 climate talks in Glasgow. Leaders will now face the challenge of turning this political promise into agreed process.   

Story – G20 outcome

Details on timelines and specific actions to deliver on the promise of faster action in the 2020s were few and far between. Though Leaders agreed to end international coal finance this year, following on from similar commitments by the G7, South Korea, Japan, China, and OECD.  In the post-Summit press briefing, Italian PM Draghi noted that China and India were more willing to move on domestic coal phase-out timelines and the agreement amongst G20 countries to provide support for the transition.  

The communique signals that G20 Leaders agree on the importance of a more systemic analysis of macroeconomic risks coming from climate change a wider range of fiscal, market and regulatory tools needed beyond just carbon pricing. This affirms a strong agenda for finance and macroeconomic system transformation through next year’s G20; more technical work needs to be done. 

But the G20 made little movement on supporting vulnerable and developing countries with COVID recovery and climate change. While they agreed to “accelerate actions” across adaptation and finance, as well as mitigation, and committed to scale up adaption finance and address issues of access to climate finance, they gave no details or timelines. G20 developed countries also sent few new signals on mobilising the trillions needed in low-cost finance for developing countries to transition beyond calling for new platforms for MDBs and private finance to work together.  

Quotes – G20 Outcome

Nick Mabey, E3G Chief Executive and co-founder said:

After a tough fight that went all the way to Leaders the G20 have confirmed the need for all countries to increase ambition this decade consistent with keeping 1.5C within reach. COP 26 now needs to turn this political promise into an agreed process.

The G20 contains the worlds largest polluters so was never going to be the place to see the strongest climate leadership. The G20 has fallen short on clear commitments to stop building coal and other fossil infrastructure but to have agreed the need for more action in the 2020s.

Chris Littlecott, Director of Fossil Fuel Transition at E3G said:

The G20 agreement recognises that emission reductions in the energy sector must be accelerated to meet the timeframes required by the Paris Agreement. The IEA’s recent Net Zero Energy analysis highlights the need for coal phase out among OECD countries by 2030 and rest of the world by 2040. This challenge has now been elevated all the way to G20 Leaders, but it is evident that some are still resisting agreeing to explicit language on coal.

G20 cooperation to deploy clean technologies instead of coal is welcome, as is their commitment to mobilize international public and private finance to support green, inclusive and sustainable energy development. This will support the continued collapse in the number of proposed coal power plants worldwide, already down by 76% since the Paris Agreement.

The coal addicts in the G20 may feel like they have succeeded in blocking explicit commitments on coal exit, but they have lost the fight over the principles. This G20 leaders discussion has confirmed that new coal plant construction does have to stop and phase out of existing coal must accelerate to meet the goals of the Paris Agreement.

Jennifer Tollmann, Senior Policy Advisor at E3G said:

By committing to accelerate action across mitigation, adaptation and finance this decade – the G20 is expected to lay a foundation for an “Acceleration Outcome” at COP26. Recognizing the need to reach a balance of mitigation and adaptation finance and the need for all G20 to significantly increase support for adaptation speaks to concerns that will be front of mind in Glasgow. What’s missing? A clear timeline on which they will do so – something that at least the richer end of the G20 will be under pressure to clarify when they face climate-vulnerable countries over the course of the next two weeks.

Dileimy Orozco, Senior Policy Advisor at E3G said:

G20 are proposing a broad portfolio of action to drive the macro transition needed. This sets the tone for the IMF’s efforts mainstreaming climate into its work – and thereby into the work of finance ministries across the world. This will help finance ministries drive the transition and address the distributional impacts of mitigation of and adaptation to climate change.

The G20 lost its sense of urgency without setting a cut off date for delivering the SDRs, and without taking the opportunity to put more money on the table. Only recycling USD100bn seems a token gesture given that SDR recycling is an almost costless exercise. The G20 leaders also omitted to deliver the SDRs via the MDBs, this is a missed opportunity to scale up the operations of key institutions in delivering sustainable development. Assuming that the IMF is in a better position to do so fails to take into account the technical expertise that is necessary to support the transition.

Julian Havers, Programme Leader of Public Banks at E3G

Lack of access to low-cost finance by developing countries proved to be one of the main blockers at the G20 Rome Summit. In Rome leaders weighed in and pushed their MDBs to gear up the way they provide financing for the transition. G20 leaders are expected to call for new strategies on how MDBs and private finance can work together to mobilize green finance consistent with the ambition to keep 1,5 degrees within reach. There are potentially trillions available in green bonds and unlocking is now set to become a key issue for COP26 and into 2022.

– Ends –

Notes to editors

  • E3G is an independent climate change think tank accelerating the transition to a climate safe world. E3G specialises in climate diplomacy, climate risk, energy policy and climate finance.
  •  To receive updates and analysis from COP26 via E3G’s daily media WhatsApp broadcast, register here

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