The G7 summit hosted by the UK on 11-13 June is seen by many as an important precursor to the COP26 climate summit in November in Glasgow.
Key takeaways from the G7 summit (see final communique):
- Net zero roadmaps – The G7 committed to submitting long-term strategies that set out concrete pathways to net zero greenhouse emissions by 2050 as soon as possible, “making utmost efforts to do so by COP26.” Business leaders and investors worldwide have been clamouring for governments to publish detailed net zero roadmaps.
- Net zero energy – The G7 committed to set net zero targets for energy generation in the 2030s and end direct government support for new thermal coal generation capacity without carbon capture and storage (CCS) technologies by the end of 2021. Other “inefficient” fossil fuel subsidies are to be phased out by 2025. G7 members also committed to stop direct funding for coal-fired power stations by the end of 2021. The hope is that other nations will follow suit.
- Mandatory climate disclosures – The G7 finance ministers had already said at an earlier meeting that climate reporting in line with the recommendations of the TCFD should be mandatory. This was confirmed in the final communique. However, the final communique says this should be done “in line with domestic regulatory frameworks”, which means the roll out (including timing) of mandatory climate reporting will vary in different G7 countries.
- Climate finance – The G7 reaffirmed their goal to jointly mobilise US$100 billion per year from public and private sources, through to 2025, for developing countries. Although G7 members have agreed to raise their contributions to meet the overdue spending pledge of $100 billion a year, so far very few G7 members have offered firm promises of increased contributions. According to Oxfam, the G7’s current commitments would deliver only US$36bn by 2025, of which less than $10bn would be for projects and initiatives on climate adaptation. So it was hoped the G7 summit would come up with more detailed plans for additional contributions from members to make up the short fall.
- Transport – The G7 confirmed that it would “intensify efforts in enhancing the offer of more sustainable transport modes”, including encouraging the phase-out of traditional passenger vehicles in favour of electric vehicles before 2040. The G7 also pledged to support the “development and adoption of ambitious mid- and long-term measures” to decarbonise from both the International Maritime Organisation (IMO) and the International Civil Aviation Organisation. Not quite the detailed plans that certain parts of industry had hoped for.
- Green infrastructure - The G7 agreed on a new “Build Back Better for the World” scheme to help developing countries tackle climate change. The UK government has said details of the new initiative will be outlined prior to COP26 and that a key focus will be to boost green infrastructure deployment in developing countries. The new scheme has been likened to a climate version of the post-war Marshall Plan. Although many are heralding this as a rival to China’s Belt and Road Initiative, others caution against presenting the new G7 scheme as an “anti-China” effort saying that it’s about western economies “showing what we are for, not who we are against”.
- Green innovation – The G7 noted the importance of the development of the circular economy, as well as electrification and “comprehensive industrial heat utilisation”, fuel switching and CCS. However, no official ringfenced funding was announced for these technologies in the final communique. So it is likely that financing for low-carbon solutions will develop nation by nation, rather than through global agreements.
- Biodiversity – The G7 adopted a “G7 2030 Nature Compact” in support of the global mission to halt and reverse biodiversity loss by 2030. This includes a target to conserve or protect at least 30% of global land and at least 30% of the global ocean by the end of the decade. The G7 also committed to “strengthen their deployment and implementation” of nature-based solutions, recognising that they can deliver “significant multiple benefits for climate mitigation and adaptation, biodiversity, and people and thereby contributing to the achievement of various Sustainable Development Goals (SDGs)”. However, the G7 stated that these solutions should not replace the “necessity for urgent decarbonisation and reduction of emissions”. According to the World Economic Forum, US$44trn (more than half of global GDP) is exposed to risks from nature loss.
A number of these announcements - including those relating to mandatory TCFD climate disclosure, the phase out of funding for overseas coal and agreement to align G7 policies with the goal of limiting global temperature increase to 1.5°C (as opposed to 2°C) - had already been trailed in earlier meetings involving G7 finance and environment ministers.
Although the final communique states that “2021 should be a turning point for our planet as we commit to a green transition” and that “we acknowledge our duty to safeguard the planet for future generations”, some of the key criticisms is that the final outcome lacks much-needed detail on many fronts and that the G7 should have been more ambitious in their financial commitments to developing countries.
Next steps in the lead up to COP26 in November? We should, hopefully, see more countries (not just the G7) set ambitious 2030 climate targets and publish detailed net zero roadmaps.
We need to make sure that as we recover, we level up across our societies, we build back better. And I actually think we have a huge opportunity to do that, because as G7, we are united in our vision for a cleaner, greener world, a solution to the problems of climate change. And in those ideas, those technologies, which we’re all addressing together, I think there is the potential to generate many many millions of high wage, high skilled jobs. And I think that is what the people of our countries now want us to focus on. They want us to be sure that we’re beating the pandemic together, and discussing how we’ll never have a repeat of what we’ve seen, but also that we’re building back better together.