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COP26: G7 Climate outcomes

COP26: G7 Climate outcomes

Overview

In addition to COVID-19, climate change was one of the headline issues at the G7 summit in Cornwall over the weekend of 11-13 June 2021. The leaders of some of the world's richest nations, whose average carbon footprint per person is thought to be double the global average (triple for the US and Canada), made several climate-focused pledges, but critics claim that the detail of how to achieve them, and the finance needed to do so, were both missing.

With COP26 only five months away, the G7 meeting was seen as an opportunity to set the tone for the climate discussions to take place in Glasgow in November of this year. A virtual meeting of the G7 environment and climate ministers held in late May resulted in several joint commitments which were repeated or fleshed out in the final G7 Communiqué. These included reaffirming the Paris Agreement commitment for developed countries to mobilise US$100bn annually through to 2025 to support developing countries build resilience to climate impacts, and supporting the transition to a net zero economy with a focus on energy, mobility and innovation.

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More of the same?

The G7 Communiqué (the main output of the meeting) devotes a section to climate and environment, but has been widely criticised as not going far enough. The Communiqué uses phrases which could by now be described as well-worn such as a recognition that "climate change and biodiversity loss pose an existential threat", that the G7 "reaffirm our commitment to the Paris Agreement" and an intention to "build back better". The Communiqué repeated the commitment to mobilise US$100bn annually, but does not exceed the funding level specified in the Paris Agreement as UN Secretary General António Guterres had encouraged the G7 to do. Guterres has since spoken of "an unforgiveable lost opportunity" and "point of no return".

The G7 also provided no details on where this funding will come from, other than "public and private sources". NGOs, politicians and corporate CEOs have all criticised a lack of focus on financial support for developing countries to tackle climate change – the "just transition" - in particular for the Global South which will face some of the harshest and most immediate climate change impacts. There are concerns that this sets the wrong tone for the upcoming COP26 negotiations, where developing nations could have little appetite for increased climate ambition without financial support and solidarity from developed countries. 

The Communiqué also draws attention to and supports participation in the OECD's new International Programme for Action on Climate (IPAC). The programme offers countries an assessment and tracking tool to ensure that they are on and remain on a net zero trajectory, including ongoing monitoring and an assessment of national and international policies, with custom recommendations.

Is there any good news?

The G7 committed to ending new government support for unabated coal-fired power generation by the end of 2021, and called on other major economies to do the same. They also pledged to end "inefficient fossil fuel subsidies" by 2025; the fact that this commitment also appeared in the G7 Leaders' Declaration in 2016, and the lack of uniform definition of the term, somewhat diminishes an otherwise eye-catching headline. The International Energy Agency has recently published a Roadmap for the Global Energy Sector, listing more than 400 milestones on the transitional path to a net zero energy system by 2050, which was "noted" (rather than supported) by the G7. A multifaceted approach as advocated in the IEA Roadmap is exactly what will be needed to achieve the G7's commitment to "an overwhelmingly decarbonised power system in the 2030s".

The Communiqué supports the Glasgow Finance Alliance for Net Zero ("GFANZ"), recently launched by Mark Carney with the aim of bringing together a variety of financial institutions to mobilise private finance for climate change. Each signatory is required to set science-aligned interim and long term goals to achieve net zero by 2050. At its inception in April 2021, 160 financial firms managing over US$70 trillion of assets had joined the initiative. It is increasingly recognised that climate-related disclosures are a key tool in ensuring that these vast sums are invested for good, and the G7 added further support for mandatory disclosures using the Task Force on Climate-related Financial Disclosures (TCFD) framework.

To be credible, ambitions need to be supported by tangible actions in all sectors of our economies and societies.

2021 G7 Leaders' Communiqué

Biodiversity

Biodiversity was also discussed by the G7, ahead of the COP15 conference of the parties to the Convention on Biological Diversity in Kunming in October 2021. The G7 agreed the 2030 Nature Compact, which in its four pillars commits its signatories to:

  1. Leading the transition to sustainable and legal use of natural resources
  2. Investing in nature and driving a nature positive economy
  3. Protecting, conserving and restoring nature including through ambitious global targets (conservation or protection of 30% of global land and ocean by 2030)
  4. Prioritising accountability and implementation of commitments for nature.
Conclusions

The G7's focus on climate issues, with equal intensity to the focus on COVID-19, must be taken as a positive indicator. However, there is no doubt that global leaders must move away from rhetoric and target setting towards concrete action and target achievement. The UK has another opportunity to lead the world in climate action at COP26 and the world will be watching to see whether developed nations accept any of the G7's invitations to improve their climate pledges before then.

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