The G-20 Leader’s Declaration for the first time formally recognises the quantum jump in finance necessary for the world to transition to a renewable energy economy. The Declaration “...noted the need for USD 5.8-5.9 trillion in the pre-2030 period required for developing countries....as well as USD 4 trillion per year for clean energy technologies by 2030 to reach net zero by 2050”.
The G-20’s promise to reach ‘net zero’, or when there were no net carbon emissions into the atmosphere, didn’t imply all nations had to equally contribute to the costs of doing so and would have to account for principles of “common but differentiated responsibility”.
G-20 Summit, September 9, 2023 | updates
A long-standing dispute among developed and developing countries, to prevent the globe from warming beyond runaway tipping points, is on transferring money and technology to developing countries. Though it was agreed in 2010 that 100 billion dollars a year was to be collected by 2020 and transferred annually until 2025, little has actually materialised. Saturday’s Declaration reiterates this commitment and notes that developed countries are likely to meet this goal for the first time in 2023.
Prime Minister Narendra Modi in 2021, while committing that India would achieve net zero by 2070, also underlined that “trillions of dollars” was needed to achieve this.
The Declaration recognises the need to reduce global greenhouse gas emissions by 43% by 2030 (relative to 2019 levels) and notes that global peaking must occur before 2025.
The G-20 communique also “encourages tripling of renewable energy capacity by 2030, and voluntary doubling the rate of energy efficiency improvement by 2030”.
However, the G-20 statement didn’t further moves to transition away from the use of coal — the main source of energy for most of the G-20 countries and which still has the maximum number of coal plants under construction.
“The tripling of renewable energy and access to low cost finance to the tune of USD 4 trillion annually, is on facilitating and not committing to it. While the progress is good, a time commitment on both the renewable energy target and allocation of finance to energy and developing countries would have strengthened the commitment from nations on the climate crisis,” said Vibhuti Garg, Director, South Asia, Institute for Energy Economics and Financial Analysis, (IEEFA), “The net zero target needs much higher investment and if that is not enhanced, it will be difficult for developing countries to achieve their climate goals.”
