G20 leaders summit

The G20 presidency is an opportunity for India to position itself as a leader representing the voice of the Global South.

G20: Amid high ambition and low consensus, climate action needs a crucial push

As deep geopolitical divisions surface in the lead up to G20, India shoulders the challenging imperative of moving the global agenda forward on climate action

Starting tomorrow, the G20 Leaders’ Summit is set to take place in the country’s capital, New Delhi. Geopolitical friction over the Russia-Ukraine war and intensifying US-China rivalry loomed large throughout the G20 meetings hitherto. Most recently, failure to reach a consensus at G20 Sherpas meeting due to the Ukraine conflict has further dampened hopes of collaborative global action. 

Extreme weather events, escalating climate impacts in a year that is likely to be the hottest on record and devastating floods in the north-western parts of the host country itself makes climate change a critical issue, requiring immediate attention at the Summit.

Already the absence of  Chinese leader Xi Jinping and Russian leader Putin at the meeting signals difficulties in reaching consensus on key issues including the energy transition, green financing and sustainable development goals. The two countries are also among the highest emitters in the world. 

While India itself has made big climate commitments and is one of the top five countries globally in the race of developing zero-carbon tech, the absence of two significant leaders at the Summit and the presidency’s failure to produce a communique following the energy and climate ministers‘ meetings have casted some clouds of doubt.

The G20 shoulders the responsibility to lay a foundation for fruitful climate action at the UN’s COP28 scheduled to happen in November this year at the UAE, where the agenda revolves around pushing major economies to target deals on fossil fuel phaseout, tripling renewables and raising new levels of climate finance. 

Despite difficult conversations and lack of any clarity on issues mentioned above, there is still some hope that the G20 Leaders’ Summit will be able to gather minimum consensus needed to project unity among the group. Let’s take a look at key climate issues the G20 must address in this era of climate emergency.  

Finance first 

Finance remains the key element of the Leader’s Summit. The G20 has an opportunity to help leverage the trillions in investments needed to support developing countries in their energy transition. Annual investments in climate action need to increase by more than $2.4 trillion annually (or 2% of the global GDP) by 2030. 

The G20 Finance Deputies met on September 5 to discuss debt distress of vulnerable countries— a topic India expects to be an important part of discussions at COP28. China, the world’s largest bilateral creditor to low- and middle-income countries, is said to be not on board with a common understanding on debt resolution for vulnerable nations, seeking wider reforms of multilateral development banks (MDBs). 

“The G20 can bring alignment around a few items. Such as the reforms needed in multilateral development banks. The MDBs need a new financial architecture. There needs to be a mechanism that will also bring in the IMF by recycling Special Drawing Rights, which has already been a model in the resilience and sustainability trust. The outcome documents from the Governors’ meeting show that they all align in the need for MDB reforms. But what is lacking is institutionalisation of the concepts and principles that have been known to us through the Bridgetown initiative, capital adequacy framework or the global financial pact. If possible, the G20 should drive this,” said Dhruba Purkayastha, India director, Climate Policy Initiative (CPI). 

The White House has indicated that Biden will have a World Bank offer at the G20.  However, analysts noted that unlocking these funds would require congressional approval, which could be a challenge given the upcoming US Presidential elections next year. 

The EU is reportedly under pressure to make tangible offers on finance despite recent changes in its top leadership and Timmermans’s departure. Calls are also being made for oil-rich Saudi Arabia to offer developing countries more financing for renewables and adaptation instead of R&D in CCS. 

Fossil fuel: language, subsidy and abatement

So far member nations have continued to dispute the definition of abatement. While the oil rich Saudi Arabia is pushing back on a fossil fuel phase out,  the EU is  working to support a fossil fuel phase out deal at COP28. 

According to experts, in the run-up to this year’s G20 there has been almost no meaningful discussion of public support for fossil fuels. China is now negotiating to delete reference to the 2009 G20 commitment to phase out inefficient fossil fuel subsidies. Also back in 2009, the G20 committed to phase out inefficient fossil fuel subsidies over the medium-term. But a recent report found the G20 handed out $1.4 trillion in public funds to support fossil fuels. India alone has reduced its fossil fuel subsidies by 76% from 2014 to 2022 while significantly increasing support for clean energy. 

Coal: to be continued?

Negotiators have said that coal has been largely absent from the talks so far despite the G20 being home to 93% of the world’s operating coal capacity and 88% of the pre-construction coal capacity. G20 countries won’t be able to support international climate mitigation efforts without a coal phase-down agreement and a stop to the construction of new coal plants.

A recent report ranked two G20 countries, Australia and South Korea, as the top coal power polluters per capita among the G20 in 2022, an unchanged status since 2020. Moreover, overall G20 per capita coal emissions increased by about 9% from 1.5 tonnes of CO2 in 2015 to 1.6  tonnes of CO2 in 2022. 

‘’We have looked into the Long Term Strategies of the G20 countries and out of the 17 who have submitted them, only France, UK, Germany and EU talk about “coal phase out”. So, even the Global north doesn’t have an agreement on coal,” said Vaibhav Chaturvedi, fellow, Council on Energy, Environment and Water (CEEW). 

With G20, India hopes to get the governments to agree on a fossil phase down commitment but if this commitment does not make it to the final text, there is a threat of backsliding on coal phase down that was agreed at the Bali summit last year. 

Amping up renewables 

The G20’s transition away from fossil fuels could be influenced by India’s pledge to install 500 GW of renewable energy by 2030 and its advancements in clean energy. Also, a recent analysis showed that in the G20 countries, wind and solar reached a combined share of 13% of electricity in 2022, up from 5% in 2015. 

While Germany is rallying support to land a COP28 deal that would see a goal on the tripling of renewables, developing countries including Indonesia and South Africa have objected to a goal without the outline of a clear finance package to deliver this. Eventually, finance lies at the heart of all climate action. 

“The G20 is a key moment for the EU to rally countries behind the target to triple renewable energy by 2030. The renewables goal can only become a success at COP28 if it comes with a financial package to ensure it can be achievable for developing countries. The EU and other rich countries can raise the stakes on climate ambition. They can lower the cost of capital and forge new economic partnerships on renewable manufacturing and deployment. Host-country India wants to become a champion on solar energy, it needs more public and private finance to make this a reality though,” said Linda Kalcher, executive director, Strategic Perspectives. 

The ask from India 

The G20 presidency is an opportunity for India to position itself as a leader representing the voice of the Global South. Any agreement on discussions to phase down fossil fuels could solidify India’s leadership pitch.

The country has pitched debt restructuring for vulnerable economies as a priority. Reforms at MDBs can significantly change how developing and underdeveloped economies deal with climate impacts and sustainable development. 

India is also likely to push for a global green development agreement which will include climate finance, besides Lifestyle for the Environment (LiFE), circular economy, accelerating progress on sustainable development goals, energy transitions and energy security. 

Unsurprisingly, the biggest hiccup in the way is the geopolitical divide. “The G20 has been hamstrung by US-China competition and the Russia-Ukraine conflict. This makes moving the global agenda forward extremely challenging on this platform. Climate change risks becoming a collateral damage at this year’s summit in India. Preparatory talks have exposed deep divisions. This does not bode well for the year end UN climate conference in the UAE. Yet it reflects the zeitgeist of global climate politics. Bad geopolitical blood is paralysing the G20 just as severe climate impacts across the world call for more unity and ambition,” said Li Shuo, senior global policy advisor, Greenpeace East Asia. 

For India, it is a tricky situation to be in at times when geo-political divisions run deep, while energy security and national interests rank paramount. At the same time, the G20 presidency also has the unique, albeit challenging, opportunity to drive global collaborative action in the wake of climate disasters worldwide, boost ambition at COP28, and to advance a sustainable, just, affordable, inclusive and clean energy transition.