ECO applauds China and the US formally joining the Paris Agreement as a prelude to the G20 summit in Hangzhou, China. This is a major step toward the entry into force of the Paris Agreement. It is a very timely signal to the world that global leaders are serious about what President Obama once called: “the best chance we have to save the one planet we have”. With the two largest polluters joining, the count of countries/emissions represented has risen from 24 and 1% to 26 and 39% respectively; closing the gap towards the 55/55% double-threshold.
Other than this, ECO found the rest of the G20 slightly anti-climatic. Despite a strong push from China and the US, no other nations announced ratification. Contrastingly, India came forward with being unable to ratify the Agreement by the end of 2016. Similarly, still no end date for “the world’s most destructive subsidies” exists. Progress on the fossil fuel subsidy phase-out was limited to countries being merely “encouraged” to participate in peer reviews.
The emphasis on natural gas as a low-carbon alternative, and the “diversification of energy sources” in the Communiqué has a distinctive fossil fuel odour to it. Plus, the G20 completely failed to address how—despite the Paris Agreement—the world is still headed for 3°C of warming due to the low ambition in countries’ NDCs. Finally, ECO is feeling a bit dismayed due to Chancellor Merkel’s silence on the climate agenda of the incoming German G20 presidency. Perhaps this is because parts of her government are closely listening to industry “front” groups; killing off ambition in the forthcoming German 2050 mitigation strategy.
There was a silver lining on the finance and investment horizon, though: China positioned itself as a green finance leader with encouraging rhetoric around green growth and sustainable development, and the establishment of the G20 Green Finance Study Group. ECO is pleased at the broad push towards transparency and mobilisation of finance for sustainable infrastructure within the G20. The world’s leading finance ministers and central bank governors embracing “green finance” as part of their own agendas is an important breakthrough. That isn’t to say that there wasn’t more “growth” than “green”, though, with no clear and stringent definition of what constitutes a “green” investment. To make financial flows truly consistent with long-term climate goals, it is pivotal to exclude carbon intensive technologies, embrace renewables and scale-up green finance beyond current levels. While some of the clouds are lifting, a more concrete reset of the global economy is not what came out of Hangzhou.