G7 leaders commit to long term decarbonisation goals
The heads of state and government from the US, Canada, Italy, France, Germany, Japan, and the UK have called for deep greenhouse gas emissions cuts as part of an effort to decarbonise the global economy over the course of the century and stem the greenhouse gas emissions driving manmade climate change.
A declaration from a two-day Group of Seven (G7) rich countries’ leaders meeting held in Germany’s Elmau valley in the Bavarian Alps from 7-8 June broaches a wide range of economic, security, and development priorities, including among others trade, responsible supply chains, the post-2015 development agenda, as well as climate, energy, and the environment.
“We commit to doing our part to achieve a low-carbon global economy in the long term, including developing and deploying innovative technologies striving for a transformation of the energy sectors by 2050,” reads the climate change section in Tuesday’s declaration.
The declaration supports cutting greenhouse gases at the “upper end” of 40 to 70 percent below 2010 levels by mid-century following recommendations provided last year by UN climate scientists on the level of mitigation required in order to stave off the worst consequences of climate change. (See BioRes, 4 November 2014)
G7 nations are responsible for 19 percent of global emissions.This increases to a share of 30 percent of emissions and 40 percent of global GDP with the inclusion of the full membership of the 28-nation EU bloc.
The G7 leaders’ declaration nods to the need to eliminate fossil fuel subsidies as part of the climate action effort. Mention is also made to continued efforts to phase down short-term climate pollutants such as hydrofluorocarbons (HFCs), which are often used in air conditioners, refrigerators, and insulating foam. These HFCs reportedly have a warming potential over a thousand times more severe than carbon dioxide.
The declaration calls on all parties to the Montreal Protocol, which targets ozone-depleting substances – to negotiate and approve an amendment to phase out HFCs this year after talks last November failed to move forward. (See BioRes, 27 November 2014)
Eyes on UN climate talks
According to some experts, the G7 announcement marks the first time the world’s largest industrial democracies have set a timeframe on decarbonisation efforts, and this could prove to be an important signal for the global economy.
“This long term decarbonisation goal will make evident to corporations and financial markets that the most lucrative investments will stem from low-carbon technologies,” said Jennifer Morgan, Global Director of think tank the World Resources Institute (WRI) in a press statement.
The news received a less favourable reception, however, from other commentators.
“It is difficult to see the idea of a fossil fuel phase-out by the end of the century as anything but an effort to try to direct attention away from the essential short to medium-term challenge,” wrote Jorgen Henningsen, former director of the EU Commission’s climate change directorate, in a letter to The Financial Times.
Some analysts, such as Michael Levi, Senior Fellow for Energy and the Environment at the Council on Foreign Relations (CFR), recalled that the group had already pledged to reducing emissions by 50 percent by 2050 in advance of the 2009 Copenhagen climate summit.
“And the idea that an 85-year old goal will have much impact on present policy or investment is a bit ridiculous,” added Levi in a blog post this week, joining a chorus of some critics sceptical of the impact or firmness of the long term pledges.
All G7 economies except Japan have formally unveiled post-2020 emissions-reduction targets in the context of the UN climate talks. These are included in individual nations’, or the collective EU's, Intended Nationally Determined Contributions (INDCs) submitted to the UN Framework Convention on Climate Change (UNFCCC) Secretariat as part of multilateral negotiations on a new climate regime. This deal, set to be signed off at a December meeting in Paris, France, would require emissions cuts outlined in INDCs from all countries and not just those considered developed.
The declaration affirms participating countries’ intention to adopt a universal climate agreement in Paris that is ambitious, robust, inclusive, and reflects evolving national circumstances, with binding rules to track progress towards achieving mitigation targets.
Word of the G7 climate pledges quickly swept through the corridors of the UN Framework on Convention on Climate Change (UNFCCC) mid-year talks ongoing in the German city of Bonn. While some saw it as an important boost to a slow two-weeks of negotiations, in particular the mention of binding monitoring rules, others suggested the G7 efforts as outlined will not be enough.
A recent report by research group Climate Analytics has measured the gap between where emissions are headed, based on current climate policies, and where they need to be in order to keep global temperature rise below an internationally agreed average of two degrees Celsius above pre-industrial levels.
According to this report the INDCs submitted by the G7 plus the EU for 2025 and 2030, if implemented, would only bring the group 20-30 percent of the way to the two degree emissions pathway needed for that time period.
The UN talks are due to wrap up on Thursday with mixed views between parties and stakeholders alike on how much progress has been made on drafting the Paris agreement. Guidance by the co-chairs of the talks may prove critical in the coming months, according to several sources, before negotiators meet again at the end of August.
Climate finance, insurance
The G7 declaration reiterates a commitment to a 2009 rich country pledge to mobilise US$100 billion per year by the end of the decade for climate action in developing economies. Mention is also made to the need to harness private sector capital, a move resisted by some developing countries in the multilateral climate talks.
The group also reaffirms an intention to make a Green Climate Fund (GCF), slated as a multilateral financial entity dedicated towards achieving UNFCCC goals, fully operational by this year.
Some commentators in Bonn corridors said that the declaration lacked concrete action to follow through on the international climate finance pledges.
“Their acknowledgement of the need to provide climate finance after 2020 was an improvement on previous positions but we urgently need a roadmap to the pledged $100 billion. These countries still have plenty of opportunity between now and Paris to step up to the plate," said Anoop Poonia of the Climate Action Network South Asia.
Meanwhile, WRI released a working paper this week summarising various pathways for the world to secure the US$100 billion per year starting in 2020. The think tank suggests a combination of multiple sources will be necessary including innovative sources of finance, for example, from the redirection of fossil fuel subsidies and export credits.
Tuesday’s G7 declaration also pledges to mobilise financial resources from development finance institutions, private investors, and multilateral banks to help accelerate renewable energy deployment in Africa and other developing countries.
In addition, a new commitment is made to help vulnerable developing countries manage climate change-related disaster risk. The leaders agreed to increase the number of people with access to direct or indirect climate risk insurance coverage by up to 400 million by 2020. This would help these populations plan and manage damages from climate hazards such as flooding and drought. The World Bank reports that weather-related loss and damage costs almost US$200 billion yearly.
Scrapping fossil fuel incentives
As part of the effort to clamp down on emissions, the declaration states that G7 nations remain committed to the elimination of fossil fuel subsidies, and continuing discussion within the Organisation for Economic Co-operation and Development (OECD) on understanding the role of export credits in achieving climate goals.
Governments worldwide currently spend over US$500 billion a year on fossil fuel consumption and production subsidies, but the true cost to the economy due to climate and health impacts is likely to be around US$5.3 trillion this year, according to World Bank estimates. Eliminating these subsidies could help reduce global emissions by between 6-13 percent by 2050, suggest other researchers.
Data in a report released at the start of the month by World Wide Fund for Nature (WWF) in coordination with Oil Change International (OCI), and the Natural Resources Defence Council (NRDC), suggests that export credit agencies based in OECD member states were among the biggest supporters of coal investments worldwide.
Export credit agencies typically help to minimise the risk of making deals abroad for investors by providing government-backed loans, guarantees, and insurance under certain conditions.
It is estimated that Japan’s export credit agencies gave more than US$20 billion for investments abroad in coal power plants between 2007 and 2014, followed closely by foreign investments made by Korea and Germany.
Some media sources report a deal on phasing out export credit support for coal is unlikely the OECD’s export credit group in the immediate future.
ICTSD reporting; “Deal to Phase out Rich-World Coal Export Subsidies Elusive,” REUTERS, 27 May 2015; “G7 nods to loss and damage claims with climate insurance pledge,” RTCC, 10 June 2015.