Summits of leaders from the twenty largest economies of the world, G-20, began their journey in 2008. Their principal objective then was to tackle the economic recession gripping the world and to have a mechanism to address such challenges for the future. Climate Change had, by then, also been clearly recognized as a major global challenge with huge economic implications and one that even had an existentialist dimension for humankind. Urgent action was the need of the hour, yet all that the first G-20 Summit, held in 2008 in Washington DC, had to say on climate change and a host of critical issues for the globe in its declaration was:
“We remain committed to addressing other critical challenges such as energy security and climate change, food security, the rule of law, and the fight against terrorism, poverty and disease”.
President George Bush was the US President at that time and for many this very limited reference to climate change was understandable given that the US’s main efforts at that time was to rope in the major emerging economies into taking mitigation (reducing GHG emissions) actions, no matter the impact of this on their development imperatives. The US had not joined the Kyoto Protocol under which developed countries took quantified emission reduction targets and all effort were directed to dilute, if not jettison, the guiding UNFCCC (United Nations Framework Convention on Climate Change) principle of common but differentiated responsibilities (CBDR). This would also do away with the scientifically proven responsibility of the developed world for their emissions since industrialisation.
In action, rather than words, the direction was to maintain the hegemony of the developed world even in climate action. This has continued to remain.
In the G-20, the developed world also sought to rope in the leading emerging economies to share in the global burden. In brief, with the by then apparent rise of China, a US-China concert, with some help from Europe (read Germany) was set in motion. There were, of course, checks and balances, including the inclusion of the next set of emerging economies like India, Brazil, Russia, South Africa and others in the grouping to make it more ‘inclusive’. The US-China concert has also continued to play in the climate change auditorium.
In 2009, President Barack Obama was inaugurated and a Democratic administration with an avowed commitment to multilateralism and tackling climate change came into place. CBDR now found its way into the simple declaration of the 2nd G-20 held in London in early 2009:
“We reaffirm our commitment to address the threat of irreversible climate change, based on the principle of common but differentiated responsibilities, and to reach agreement at the UN Climate Change conference in Copenhagen in December 2009”.
This was, in realty, lip service.
The next G-20 Summit was held in Pittsburgh USA in late 2009 just prior to the United Nations Convention on Climate Change (UNFCCC) Conference of Parties (CoP) in Copenhagen. Articulating a strong resolve on climate change, the Summit declared the G-20’s “resolve to take strong action to address the threat of dangerous climate change. We reaffirm the objective, provisions, and principles of the United Nations Framework Convention on Climate Change (UNFCCC), including common but differentiated responsibilities …… We will intensify our efforts, in cooperation with other parties, to reach agreement in Copenhagen through the UNFCCC negotiation. An agreement must include mitigation, adaptation, technology, and financing”. Finance Ministers were tasked to report back with “a range of possible options for climate change financing to be provided as a resource to be considered in the UNFCCC negotiations at Copenhagen” and climate and green financing underscored as important for the World Bank’s agenda.”
The Pittsburgh the G-20 declaration basically set the tenet for the G-20 position on climate change, which nominally acknowledged the developing countries on differentiation but demanded action by ALL countries. Underplaying the providing of climate finance and collaboration on innovation have also been a hallmark though again in well couched language.
Another push by the developed world at the G-20 which was concretised at a working lunch at the environment friendly facility of Phipps Conservatory at Pittsburgh was “to phase out and rationalize over the medium-term inefficient fossil fuel subsidies while providing targeted support for the poorest. Inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change”.
Since then, this has been one of the recurring themes driving the G-20 against fossil fuel subsidies. The narrative pushed is that these subsidies distort markets, widen fiscal deficits across economies and slower the adoption of cleaner fuels thus making fossil fuel subsidies an unfavourable global policy choice. All this, even while the developed world continues to ply its own fuel subsidies in various forms.
Let us see how things moved on climate change at the G-20 from 2009, the pivotal year in so far as global climate negotiations with world leaders attending the CoP at Copenhagen and even participating in the negotiations.
No matter the change in administration in the US, the country, with able support from the rest of the developed world, continued to be strong in dismantling differentiation. Indeed, President Obama himself negotiated with leaders of the BASIC group [India, China, Brazil and South Africa] on the issue of all countries agreeing to have their climate actions “verified” internationally, no matter this not being in consonance with the UNFCCC and its Kyoto Protocol, which was now in force. Despite strong opposition from the Chinese, he finally relented only when Prime Minister Dr Manmohan Singh told him that the Indian Parliament would not countenance such infringement of sovereignty. The leaders settled on the expression “consultation” in so far as developing countries were concerned and at the next CoP, in 2010 at Cancun, a process of International Consultations and Analysis was agreed for them as against an International Assessment and Review for developed countries.
The story regarding finance is equally interesting where developing countries were presented a figure of US$ 30 billion as commitment by developed countries for finance for the years 2010-2012 and US$ 100 billion a year for the coming decade till 2020. However, just as the hammer was to go down, an advisor whispered something in his ear and a visibly embarrassed President Obama had to block the proposal on the ground that specific money matters were a Congressional prerogative and not in his remit. The expression “approaching US$ 30 billion” then crept into the Copenhagen Accord and ‘approaching’ has been the guiding principle on climate financing to be provided by developed countries ever since. Indeed, the long-term promise of US$ 100 billion a year is still nowhere on the horizon with the Glasgow Climate Pact (UNFCCC COP in 2021), more than a decade later, noting the “regret” of the developed countries in keeping their commitment!
The next two G20 meetings, both held in 2010, at Toronto and Seoul, did precious little on climate change but heard special briefings from President Felipe Calderón of Mexico and Prime Minister Meles Zenawi of Ethiopia on climate change financing. The next G-20 Summit in Cannes (France) in 2011 saw the grouping return to the issue of fossil fuel subsidies with decisions on bettering data to tackle this issue.
Things changed at the G-20 as the Mexicans took the Presidency in 2012. The Los Cabos Summit moved to provide some substance to the climate finance agenda creating a group on climate finance and for finding ways to mobilize resources. Further, green recovery and sustainable finance mechanisms were also discussed in greater detail. Also, by 2012 the need for restructuring and refinancing the multilateral development bodies to support green growth was very well established and the G-20 action at Los Cabos sought taking measured steps to restructure the global financial architecture to deliver finance for green growth and tackling climate change.
The Los Cabos Summit, as indeed other Summits, clearly showed the interest of the hosts in guiding the declaratory thrust of the grouping. This was best noticed at the next G-20 Summit in 2013 in St. Petersburg where the Russians ensured that the declaration limited itself to a very narrow set of issues pertaining to the climate change and support to developing a legal instrument under UNFCCC to deal with climate challenge. Russia, whose ratification in 2004, had brought the Kyoto Protocol in force had now sown the seed for the jettisoning of the principle of differentiation with the support for a new legal instrument under the UNFCCC.
The directional shift of action by ALL was clearly noticeable in the declaration of the 2014 G-20 Summit in Brisbane (Australia) which noted “We will work together to adopt successfully a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC that is applicable to all parties at the 21st Conference of the Parties (CoP21) in Paris in 2015. We encourage parties that are ready to communicate their intended nationally determined contributions to do so well in advance of CoP21 (to be held in Paris in 2015).
This was reinforced at Antalya, Turkey in 2015 though there the CBDR principle was at-least paid lip-service: “We underscore our commitment to reaching an ambitious agreement in Paris that reflects the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances. We reaffirm that UNFCCC is the primary international intergovernmental body for negotiating climate change. We welcome that over 160 Parties including all G20 countries have submitted their Intended Nationally Determined Contributions (INDCs) to the UNFCCC, and encourage others to do so in advance of the Paris Conference”.
The UNFCCC CoP at Paris in 2015 was a game-changing conference that saw a jettisoning, in real effect, of differentiation and committed ALL countries to nationally determined commitments (NDCs). The US, and the developed world, appeared to have prevailed with the Chinese as willing partners. Indeed, the game appeared set after the US and China announced a climate partnership in 2014. This was again to be witnessed in 2021.
India, under Prime Minister Modi, played a major role at Paris in giving a huge fillip to renewable energy by establishing the International Solar Alliance in collaboration with France.
But the ironies of the twists of history continued.
Presidential elections in the US brought President Donald Trump to power in 2016 and one of his first acts was to pull the US out of the Paris Agreement. From then onward, for the next four years, the G-20 was basically a divided grouping on climate change with the US, perhaps, elaborating disdain for the Paris Agreement [best captured in the G-20 declaration from Hamburg (2019): “The United States reiterates its decision to withdraw from the Paris Agreement because it disadvantages American workers and taxpayers.” The real reason, it can be surmised, was not only its unwillingness to cap growth but to commit to cut down on fossil fuel usage.
Interestingly, but not unexpectedly, the US response of 2019 elicited a strong counter-response from the others under German leadership: “The Leaders of the other G20 members state that the Paris Agreement is irreversible ….. We reaffirm our strong commitment to the Paris Agreement, moving swiftly towards its full implementation in accordance with the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances and, to this end, we agree to the G20 Hamburg Climate and Energy Action Plan for Growth”
The G-20 Summit after the UNFCCC CoP in Paris was held in 2016 in Hangzhou and, with the US out, provided the Chinese an opportunity to try and take a moral high ground on climate change and push for the Paris Agreement. They also launched the Green Finance Study Group to identify institutional and market barriers to green finance and options to enhance the mobilisation of private capital for green investment.
The Osaka (2019) G-20 Summit tried to refocus matters on finance “we strive to foster inclusive finance for sustainable development, including public and private financing mobilization and alignment between them, as well as innovation in a wide range of areas for low emissions and resilient development……..We emphasize the importance of providing financial resources to assist developing countries with respect to both mitigation and adaptation in accordance with the Paris Agreement”
Thereafter, Riyadh (2020), a virtual Summit given the COVID-19 pandemic, had a non-negotiated declaration on climate change and an endorsement for a Circular Carbon Economy (CCE).
But the twists of history continued and in 2020, President Joe Biden assumed the Presidency of the US and brought it back into the Paris Agreement. There was, of course, no change in the pursuit of hegemony of power. Once again, no heed was paid to differentiation and accepting responsibility for past emissions, but the call was for ALL countries to achieve Net Zero GHG emissions by 2050. The G-20 Summit in Rome, Italy, was held in this backdrop and preceded the UNFCCC CoP at Glasgow which once again saw global leaders converging at a CoP.
Of all the G-20 Summits, Italy’s G20 presidency of 2021 delivered the most seminal declaration on climate change. The declaration touched upon various important issues including, climate mitigation, circular economy, fossil fuel subsidies and using tax instruments for climate finance. The G20 climate finance study group constituted in 2018, under the Argentinian Presidency, was expanded in terms of its mandate and now tasked to consider additional aspects of sustainable development. The group was, therefore, renamed Sustainable Finance Study Group (SFSG). The Group was also mandated to developing, climate focused G20 sustainable finance roadmap, improving sustainability reporting, identifying sustainable investments, and aligning International Financial Institutions’ efforts with the Paris Agreement.
Italian presidency also witnessed introduction of a new pillar dedicated to protecting the planet in the G20 action plan. Climate change was no longer being viewed as one of global challenges, rather its macro-economic and fiscal impacts were being assessed for safeguarding the global economic architecture.
The relevant text from Rome thus demands full reproduction, even though it is lengthy, to capture its full import:
By the end of 2021, it was almost clear that the developed world couldn’t mobilize committed climate finance of $ 100 bn per year. The climate delivery plan submitted at the Glasgow presidency of Conference of Parties to the UNFCCC acknowledged that the target agreed at time of the Paris agreement, can only be achieved by 2023[i]. Therefore, the G20 needed to step up its efforts in mobilizing and safeguarding the financial resources for climate action.
The declaration reaffirmed the G-20’s “commitment to the full and effective implementation of the UNFCCC and of the Paris Agreement, taking action across mitigation, adaptation and finance during this critical decade, on the basis of the best available scientific knowledge, reflecting the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances. We remain committed to the Paris Agreement goal to hold the global average temperature increase well below 2°C and to pursue efforts to limit it to 1.5°C above pre-industrial levels, also as a means to enable the achievement of the 2030 Agenda.
We recognize that the impacts of climate change at 1.5°C are much lower than at 2°C. Keeping 1.5°C within reach will require meaningful and effective actions and commitment by all countries, taking into account different approaches, through the development of clear national pathways that align long-term ambition with short- and medium-term goals, and with international cooperation and support, including finance and technology, sustainable and responsible consumption and production as critical enablers, in the context of sustainable development. We look forward to a successful CoP26.
In this endeavour, informed by the IPCC assessments, we will accelerate our actions across mitigation, adaptation and finance, acknowledging the key relevance of achieving global net zero greenhouse gas emissions or carbon neutrality by or around mid-century and the need to strengthen global efforts required to reach the goals of the Paris Agreement. Accordingly, recognizing that G20 members can significantly contribute to the reduction of global greenhouse gas emissions, we commit, in line with the latest scientific developments and with national circumstances, to take further action this decade and to formulate, implement, update and enhance, where necessary, our 2030 NDCs, and to formulate Long-Term Strategies that set out clear and predictable pathways consistent with the achievement of a balance between anthropogenic emissions and removal by sinks by or around mid century, taking into account different approaches, including the Circular Carbon Economy, socioeconomic, economic, technological, and market developments, and promoting the most efficient solutions. We acknowledge the efforts made to date, including net zero and carbon neutrality commitments and new and ambitious NDCs and LTSs by G20 members, and those to come by or at COP26.
Impacts of climate change are being experienced worldwide, particularly by the poorest and most vulnerable. We stress the importance of the effective implementation of the global goal on adaptation and will submit adaptation communications. We also commit to scale up adaptation finance, with a view to achieving a balance with the provision of finance for mitigation to address the needs of developing countries including by facilitating mechanisms, conditions and procedures to access available funds, taking national strategies, priorities and needs into account. We recall and reaffirm the commitment made by developed countries, to the goal of mobilizing jointly USD 100 billion per year by 2020 and annually through 2025 to address the needs of developing countries, in the context of meaningful mitigation actions and transparency on implementation and stress the importance of meeting that goal fully as soon as possible. In this regard, we welcome the new commitments made by some of the members of the G20 to each increase and improve their overall international public climate finance contributions through to 2025 and look forward to new commitments from others. We note the Climate Finance Delivery Plan, which shows, based on OECD estimates, that the goal is expected to be met no later than 2023. We also recall the Paris Agreement aim to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, and that one of its goals is to make finance flows consistent with a pathway towards low GHG emissions and climate-resilient development. We encourage International Financial Institutions, including MDBs, to step up their efforts to pursue alignment with the Paris Agreement within ambitious timeframes, to support sustainable recovery and transition strategies, NDCs and long-term low greenhouse gas emission development strategies in emerging markets and developing economies, and to set out plans to mobilize private finance, in line with their mandates and internal approval procedures, while continuing to support the achievement of the UN 2030 Agenda.
We commit to significantly reduce our collective greenhouse gas emissions, taking into account national circumstances and respecting our NDCs. We acknowledge that methane emissions represent a significant contribution to climate change and recognize, according to national circumstances, that its reduction can be one of the quickest, most feasible and most cost-effective ways to limit climate change and its impacts. We welcome the contribution of various institutions, in this regard, and take note of specific initiatives on methane, including the establishment of the International Methane Emissions Observatory (IMEO). We will further promote cooperation, to improve data collection, verification, and measurement in support of GHG inventories and to provide high quality scientific data.
We will increase our efforts to implement the commitment made in 2009 in Pittsburgh to phase out and rationalize, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption and commit to achieve this objective, while providing targeted support for the poorest and the most vulnerable.
We acknowledge the close link between climate and energy and commit to reduce emission intensity, as part of mitigation efforts, in the energy sector to meet timeframes aligned with the Paris temperature goal. We will cooperate on deployment and dissemination of zero or low carbon emission and renewable technologies, including sustainable bioenergy, to enable a transition towards low emission power systems. This will also enable those countries that commit to phasing out investment in new unabated coal power generation capacity to do so as soon as possible. We commit to mobilize international public and private finance to support green, inclusive and sustainable energy development and we will put an end to the provision of international public finance for new unabated coal power generation abroad by the end of 2021.
As we are recovering from the crisis, we are committed to maintain energy security, while addressing climate change, and guaranteeing just and orderly transitions of our energy systems that ensures affordability, including for the most vulnerable households and businesses. In this endeavour, we will remain vigilant of the evolution of energy markets, taking into account trends over the years, and promote an intensive dialogue. Accordingly, the G20 in collaboration with the International Energy Forum (IEF) will facilitate a dialogue between producers and consumers to bolster the efficiency, transparency and stability of the energy markets. We emphasize the importance of maintaining undisrupted flows of energy from various sources, suppliers and routes, exploring paths to enhanced energy security and markets stability, while promoting open, competitive and free international energy markets. We recognize the role of digitalization in enhancing energy security and market stability through improved energy planning, while ensuring the security of energy systems against risks of attacks, including through malicious use of ICT. In addition to continuing to address traditional energy security challenges, we are mindful that clean energy transitions require an enhanced understanding of energy security, integrating aspects such as the evolving share of intermittent energy sources; the growing demand for energy storage, system flexibility changing climate patterns; the increase in extreme weather events; responsible development of energy types and sources; reliable, responsible and sustainable supply chains of critical minerals and materials, as well as semiconductors and related technologies.
We welcome the introduction of a Pillar dedicated to Protecting the Planet in the G20 Action Plan. We agree on the importance of a more systematic analysis of macroeconomic risks stemming from climate change and of the costs and benefits of different transitions, as well as of the macroeconomic and distributional impact of risk prevention strategies and mitigation and adaptation policies, including by drawing on well-established methodologies.
Sustainable finance is crucial for promoting orderly and just transitions towards green and more sustainable economies and inclusive societies, in line with the 2030 Agenda for Sustainable Development and the Paris Agreement. We welcome the establishment of the G20 Sustainable Finance Working Group (SFWG) and we endorse the G20 Sustainable Finance Roadmap and the Synthesis Report. “
Allocating a longer space to climate change in the official declaration has raised a bar for acting on climate change. However, the geopolitical and economic challenges persist. The issue of limiting global temperature rise to 1.50 C or 20 C has also become another pressure point on large developing countries as the former would even further limit the available carbon budget for humanity with every possibility of restricting them in their pursuance of development and growth. This, more-so, as the developed world was also giving itself space for growth till 2050 and really not moving on an urgent basis to cut down on their GHG emissions.
The UNFCCC CoP at Glasgow in November 2021 once again saw a galaxy of world leaders attending. These included President Biden, Prime Minister Modi and a host of Europeans – notably the Chinese and Russians were absent. Agenda of Net Zero by ALL by 2050 and a concerted effort at phasing out coal was strongly pushed.
The Glasgow Climate Pact adopted at this CoP has energized the climate change negotiations though the shadow of the Russia-Ukraine conflict could diminish action on mitigation even across Europe, the climate action leaders, given rising energy prices faced as a result of sanctions on Russia, including its gas supplies. Again, not unexpectedly, the US-China climate concert was once again visible in Glasgow with a Joint Declaration that saw China commit to phasing down its use of coal in the coming decades. This phrase later found its way into the Glasgow Climate Pact. Prior to Glasgow, China had announced its commitment t Net Zero by 2060.
Prime Minister Modi announced India’s commitment to Net zero by 2070 at Glasgow along with a host of other significant measures to step up induction of renewables in India even by as early as 2030. India’s leadership in pushing the global climate agenda was very visible.
India will host the 18th G-20 Summit in 2023. That will also be the time of the global stocktake under the 2015 Paris Agreement of the UNFCCC and the COP, likely in UAE, could be another keystone on the road of climate change negotiations. Financing will be a key challenge. Ukraine conflict and recent developments involving Taiwan strait has created a significant challenge in getting the world to agree on even some of the critical issues as climate change. No resolution coming from the environment ministers meeting under Indonesian presidency (2022) and China withdrawing from its cooperation with USA on climate action are the fresh examples of the magnitude of the hurdles that India will encounter in its G20 presidency, if it hopes to provide substance to the discussions.
It is generally accepted that the need for sustainable finance is huge and there are suggestions for such funding being anchored, perhaps, multilaterally. Such a fund or mechanism should also help accrete low-cost funds from other sources to developing countries. This is also an imperative for an exit from fossil-fuels after taking on board the need for development with equity in countries further down the development ladder and a just transition.
Furthermore, developing countries face fundamental financing barriers for investing in new green technologies and scaling up their climate actions. First, green technologies have higher capital cost in comparison to conventional technologies, primarily due to their unproven status on the impact of the operational efficiency of production, often making it prohibitive to invest in these. Secondly, developing countries lack capacities even towards the development of bankable projects beyond the renewables sector
But, perhaps, the most critical is that the cost of capital is significantly higher in developed countries, making green investments more costly. This is projected to further increase due to the impact of climate vulnerability on a country’s sovereign credit rating, worsening their financial burden and economic challenges. Moreover, they face rather high costs of hedging. This makes de-risking another priority need, particularly on lowering the currency risk.
Additionally, looking at green financing only from the lens of mitigation measures will not be enough and equal attention needs to be paid to adaptation. Indeed, as extreme weather events propel large scale loss of physical assets and loss of agricultural productivity, their handling is likely to be beyond the abilities of insurance companies and, maybe, even Governments.
Three developing countries presiding over G-20 in succession is a perfect opportunity to structure global climate action in favour of the needs of developing countries and vulnerable communities. With the next three G-20 Summits taking place in Indonesia, India and Brazil, this is an opportunity to move the needle on climate finance and the G-20 from a grouping focussing on retaining hegemony on power to being a global support mechanism. Prime Minister Modi had called for US$ 1 trillion for climate finance at Glasgow. This needs to be realised and the G-20 Summit in India is a major opportunity to push this agenda in the interests of humankind.
Manjeev Singh Puri is a Former Ambassador and Lead Negotiator for India at Climate Change negotiations
Damodar Pujari is a Fellow, Climate Change at Gateway House.
A version of the article earlier appeared in the Indian Council of World Affairs (ICWA).