G20 supports energy transition acceleration, yet clear pathway is missing

At the last summit of the Group of Twenty, gathering the countries responsible for 80% of greenhouse gas emissions, their representatives did not set a pathway to mitigate the climate crisis. However, they stated in a joint declaration that renewable energy capacities must be tripled by 2030 to achieve global climate goals. Once again, the group failed to agree to accelerate the phaseout of coal and other fossil fuels.

At the 2023 G20 New Delhi summit in India, leaders of the world’s largest economies highlighted the need for annual investments of over USD 4 trillion to achieve the goal of net zero emissions by 2050.

Annual investments of over USD 4 trillion on a global scale are required to achieve climate goals

The group must secure the said amount every year for a successful energy transition. However, it is not clear how the funding could be provided.

As emphasized at the event, a high share of renewable energy in the primary energy mix is also necessary.

The non-binding joint declaration calls for efforts to triple renewable energy capacity in line with “national circumstances” by 2030. But the G20 omitted a commitment to phasing out coal and other fossil fuels, which is a point of disagreement.

The declaration reaffirms the 2010 commitment of developed countries to assist the most climate-vulnerable countries and regions with USD 100 billion per year.

The energy transition requires affordable financing and international collaboration

Members of the G20 said they would work to enable affordable financing for developing nations for the energy transition.

The recipients will require between USD 5.8 trillion and USD 5.9 trillion in the pre-2030 period to achieve their nationally determined contributions (NDCs), the group said.

Developing countries will require between USD 5.8 trillion and USD 5.9 trillion to reach targets

G20 has concluded that countries opting to use civil nuclear energy should collaborate on research, innovation, development, and deployment of civil nuclear technologies, including advanced and Small Modular Reactors (SMRs).

The Global Biofuels Alliance was established at the summit. Its members will support reliable, diversified, sustainable, and responsible supply chains for energy transitions, as outlined in the G20 declaration.

Inconsistency in practice: The fossil fuel industry subsidies

Despite promises to gradually phase out subsidies, G20 member countries provided USD 1.4 trillion in support for the fossil fuel sector in 2022, more than double the pre-pandemic levels, revealed the report by the International Institute for Sustainable Development (IISD) published last week.

G20 member countries allocated USD 1.4 trillion in support for the fossil fuel industry in 2022

This total includes USD 1 trillion in fossil fuel subsidies, USD 322 billion in state-owned enterprise investments, and USD 50 billion in loans from public financial institutions, the document reads.

Meanwhile, the scientific community continues to warn of the acute consequences of the climate crisis. Authors of a United Nations report said the countries of the world are not reducing greenhouse gas emissions fast enough to meet the Paris Agreement goals and prevent a climate catastrophe.

G20 decisions are not legally binding but have significant importance

Member states have further pointed to the importance of preserving healthy ecosystems in addressing climate change as well as to the threats posed by biodiversity loss, desertification, drought, land degradation, pollution, food insecurity, and water scarcity.

Their representatives have committed to restoring at least 30% of all degraded ecosystems by 2030.

While G20 decisions are not legally binding, they hold a significant importance. As stated in the preamble of the New Delhi declaration, it is a decisive moment in history, as the decisions made now will determine the planet’s future.

The adoption of new commitments and climate goals by individual countries is expected after the publication and analysis of the first UN global stocktake. The report summarizes what each country has achieved within the framework of the 2015 Paris Agreement.