Hot off the heels of the G20 Finance Minister meeting last week, many in the climate community are giving thought to what this unlikely cast of countries can do ahead of the Paris agreement in December.
The G20 is a peculiar venue. Countries interests diverging from Saudi Arabia to Germany need to be reconciled. The G20 is also a relatively new and organic club, not quite at ease with itself. Unlike the G7, the G20 has a focused mandate on finance and economics where the diversity of interests are more (although not consistently) aligned. This means climate and the G20 have historically been odd bedfellows. But we shouldn’t write off the G20 just yet. As the last Summit of Leaders ahead of Paris it must say something. So what can this new club do on climate? Here’s E3G’s take.
The negotiations need an accelerator and the G20 comes at the right time. Strategic guidance from Leaders ahead of the negotiations in Paris is going to be critical to jump starting the whittling down of options that Ministers need to chose from to reach a deal. A clear mandate from G20 Leaders that they need an agreement designed for ambition, a blue print for transitioning towards decarbonisation and their resolve to deploy all the tools at their diplomatic disposal to get the agreement done would set the scene for COP21.
If Paris is going to send a north star (decarbonisation agenda) to the real-economy, the real-economy needs to know how to respond. Given the G20’s work on modernising international financial architecture and financial regulations to reduce risks and prevent future financial crises, the G20 is well placed to lead on a cutting edge financial regulation. The G20 can reflect progress in the real-economy, transitioning away from an outdated model of development towards a smarter, efficient and modern economic model that increasingly understands and incorporates global risks into its decision-making. The G20 can help prepare the way and embark upon a work programme to better understand the impacts of climate change on financial stability and to drive the required transformation to ensure that financial systems are made compatible with 2°C.
Getting to grips with the infrastructure challenge.
According to the New Climate Economy report, the next 15 years of infrastructure will determine the stability of climate[1]. This is scary stuff. We know that the G20 Turkish Presidency are keen to promote infrastructure investment across the G20 agenda, this couldn’t come at a better time. Infrastructure is incredibly important for development and prosperity, and the new wave of infrastructure should focus on renewable energy and energy efficiency to avoid stranded assets through lock-in of unsustainable infrastructure, wasting precious public money.
If Paris is the beginning of a new road, then lining up the future G20 Presidencies to focus on climate is going to be key. China will host in 2016, and Germany the year after. Both these countries are seizing the opportunities for the low carbon economy and are well placed to maintain momentum on climate beyond Paris. In particular, the G20 this year, can set up the agenda for 2016 in China to seriously consider its response to the outcome in Paris. China will therefore be hosting and facilitating discussions on what Paris means for the real-economy and economic reform.
And last but not least is the issue of fossil fuel subsidies. This is the ball and chain around the G20’s climate legacy. So far, progress to eradicate inefficient subsidies has been slow. But things are starting to look on the bright side, with many countries since the drop in the oil price looking to reform their practices.
What is certain is that as we can’t ignore the G20 on the way to Paris, the G20 can’t look the other way as the decarbonisation agenda unfolds. As the biggest single risk to the economy climate change should rank high in the G20 priorities. This new club determined to drive economic prosperity has become a venue to echo the changes in the real-economy and get to grips with how the financial ecosystem can align and be compatible with 2°C. Despite being odd bedfellows it looks like Climate and the G20 can have a long and fruitful relationship.
