G20 sharpens climate, energy pledges

The G20 summit of major economies has concluded in Bali, Indonesia with a strengthened commitment to energy transition and limiting the rise in global average temperatures to 1.5°C above pre-industrial levels. But its leaders' declaration did expose it has been moving slowly in achieving these goals since they first appeared on the G20 agenda in 2009.

The G20 host this year Indonesia has much to do with elevating climate and energy to a priority level within the grouping. Jakarta has embarked on its own energy transition by announcing this week that it will bring forward its peak in greenhouse gas (GHG) emissions from its coal-dominated electricity generation sector by the end of the decade, seven years ahead of its previous plan.

Words matter in declarations or communiques at large multilateral meetings such as the G20, with each country advocating for its view to be inserted into the final text. The placing of each paragraph is also highly contested. Obtaining a consensus view means that the final outcome requires a study of semantics, with a comparison with prior declarations needed to put the latest pledges into context.

Bali's G20 leaders noted climate change in paragraph two after Covid-19 and ahead of a global economic downturn and increased poverty. In paragraph 12 the 2022 declaration stated: "We will rapidly scale up the deployment of zero and low emission power generation including renewable energy… including accelerating efforts towards the phasedown of unabated coal power." In between paragraphs two and 12 were references to food security, the Ukraine war, trade, health and the digital economy.

"We resolve to pursue efforts to limit the temperature increase to 1.5°C," the Bali declaration said. This reverses the emphasis of 1.5°C and the 2°C target, which is also part of Paris climate agreement.

The G20 Rome text last year read: "We remain committed to the Paris Agreement goal to hold the global average temperature increase well below 2°C and to pursue efforts to limit it to 1.5°C above pre-industrial levels."

The difference a year makes

In between the Rome and Bali meetings the world has seen extreme weather events, many of which affected G20 members, such as the droughts in China and across much of Europe and the US, along with floods in India and in neighbouring Pakistan. The US has passed its most ambitious climate legislation, known as the Inflation Reduction Act, while the EU has redoubled efforts to expand the deployment of renewable energy, electrify as much of its industrial processes and households to reduce its dependence on Russian gas and oil following Moscow's invasion of Ukraine.

The election of Luiz Inacio Lula da Silva in Brazil has given environmentalists hope of stemming the tide of forest destruction in the Amazon, which absorbs much of the world's GHG emissions. There have also been changes in the past 12 months among major fossil fuel exporters, with Australia deepening its GHG emission cuts and raising renewable energy targets and Saudi Arabia setting up a sustainability fund and set decarbonisation goals for 2050 for a sovereign wealth fund.

The extreme weather events and war in Ukraine was in the preface to the Bali pledge relating to the energy transition. "We meet at a time of climate and energy crises, compounded by geopolitical challenges. We are experiencing volatility in energy prices and markets and shortage/disruptions to energy supply."

And then it pledged to accelerate the transition. "We underline the urgency to rapidly transform and diversify energy systems, advance energy security and resilience and markets stability, by accelerating and ensuring clean, sustainable, just, affordable, and inclusive energy transitions and flow of sustainable investments. We stress the importance of ensuring that global energy demand is matched by affordable energy supplies."

The latest declaration is slightly more direct than the G20 wording from Rome. "In order to deploy the full potential of zero, low emission, innovative, modern and clean solutions, we will collaborate to accelerate the development and deployment of the most efficient and effective solutions and help them rapidly achieve cost parity and commercial viability, including to ensure access to clean energy for all, especially in developing countries."

The reference to the access to all is part of the sustainable development goals for 2030 that ensures universal access to affordable and reliable energy. The Bali roadmap document estimated 600mn people will be without electricity at the end of the decade.

The slow lane

The G20 text relating to climate and energy also showed that elements of the energy transition and efforts to reduce GHG emissions move slowly. The Bali declaration reiterated the commitment to phase out and rationalise, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption and commit to achieve this objective. This pledge was first made at the G20 meeting in Pittsburgh in 2009.

The IMF estimated that fossil fuel subsidies were $5.9 trillion in 2020 and will rise to around $7 trillion by 2025 after being below $5 trillion in 2015. The IMF uses the undercharging for supply costs, undercharging of environmental costs and forgone consumption taxes in its methodology.

Next year the focus will be on India as G20 host. If it were to unveil similar ambitions to Indonesia about reducing coal dependency it would underline a major shift in the energy transition, given India is one of the world's largest GHG emitters and coal consumers. If not, the G20 may still be travelling in the climate slow lane.

By Kevin Morrison