Coal Remains a Hurdle for G20

    Stockholm (NordSIP) – Despite their best efforts, G20 ministers were unable to reach an agreement on concrete steps to decarbonise the global economy at the meeting on Energy and Climate in Naples on July 23rd. Concretely, despite agreeing on 58 actions “unanimously considered by all members as necessary to boost the effective and full implementation of the goals of the Paris Agreement”, the meeting participants could not agree to stop funding coal nor on a deadline to phase out the fossil fuel.

    According to the G20 presidency, the group of 20 acknowledged for the first time the “inextricable link between energy production, greenhouse gas emissions and climate change”. The representatives also recognised for the first time that the keeping global temperature rise not exceeding 1.5°C will lead to a much more reduduced impact of climate change than the scenario a 2° C increase, as affirmed in the “Global Warming of 1.5° C” IPCC Special Report. On the basis of this conclusion, the Members of the G20 decided to accelerate action to keep this 1.5° C limit on the rise of global temperatures within reach during the critical decade of the 2020s.

    Nevertheless, despite majority support on the urgency of those two actions, unanimous consensus remained elusive regarding concrete steps to implement decarbonisation. The large majority of members acknowledged that unabated coal power plants and their international public funding are incompatible with the transition to net-zero emissions.

    The discussion about the need to accelerate emissions reduction in the power sector was supported by most members. The problem, as echoed by an attached statement from the Indian delegates, was that participants from emerging markets want developed countries who have benefitted from longer periods of industrialisation and its associated economic growth and pollution to accelerate their own efforts further.

    Regarding the financing of unabated coal, a majority G20 ministers also “agreed on the need of a credible timeline establishing phase out and rationalization of inefficient fossil fuels and to align financial flows to the Paris Agreement”.

    The discussion on the points of decarbonisation is due to continue to take place at the G20 Leaders Summit, to be held in Rome on October, 30th -31st 2021.

    Image courtesy of G20

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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