During the G7 summit on 12th June, leaders from the G7 countries: UK, Canada, France, Germany, Italy, Japan, and the United States reaffirmed their commitment to “jointly mobilise $100 billion per year from public and private sources, through to 2025”. The summit was held in Cornwall, England,
The funds will help poorer countries cut their carbon emissions, adapt to climate change, support infrastructure investments and help shift to cleaner and more sustainable technology. However, according to climate groups, the climate finance that the G7 leaders pledged lacked details.
Reuters reports that Canada promised to double its climate finance pledge to $4.4 billion in the next five years and Germany to $7.26 billion per year no later than 2025.
During the summit, the G7 leaders also want to counter China’s rising influence on developing countries through its multi-trillion-dollar Belt and Road initiatives; however, it lacked details like the climate financing pledge.
UK Prime Minister Boris Johnson, the host of the summit, says G7 countries contribute 20% of global carbon emissions, and it is clear that the action should start with them.
Wealthy countries failed to meet their climate finance pledge
Climate groups were unimpressed by these promises. In 2009, developed countries agreed at the United Nations to contribute $100 billion each year by 2020 to help developing countries cope with the increasing impacts of climate change like sea-level rise, droughts, and storms; however, developed countries failed to meet this pledge.
Although leaders promised to phase out coal, boost up the transition to green technologies, tackle carbon leakage – the risk the companies move to other regions to continue emitting GHG, they did not provide specifics on how they will cut emissions, nor details on phasing out coal to transition to electric vehicles.
G7 countries also need to reveal specific actions on cutting subsidies for fossil developments and investments in new fossil fuel projects.
$100 billion crucial in the success of COP26
According to a Financial Times report, the G7 leaders’ failure to produce specific plans for climate financing to developing countries has caused tension during the COP26 preliminary meetings. It may also cause to derail the COP 26 summit itself.
The article said that a failure to reach the $100 billion target would make it difficult to agree on new goals for climate finance at the COP26 in November in Glasgow. Additionally, meeting the climate finance pledge will be more difficult this year as the pandemic has already drained government funds.
The upcoming COP26, already postponed by a year due to the pandemic, will see several rules of the Paris agreement finalized, like how countries report their carbon emissions. Negotiators will also craft rules for global carbon markets like carbon offset between countries.
Patricia Espinosa, UN climate chief, says that reaching the climate fund pledges is “absolutely crucial” for the success of negotiations during the preliminary meetings leading up to the COP26 summit.
Lord Nicholas Stern, an economics professor at the Grantham Researcher Institute on Climate Change at the London School of Economics, says that developed countries should contribute at least $150 billion in climate funds annually by 2025, adding that the “success of COP26 depends on whether the financial flows increase in quantity and quality by 2025”.
According to Stern, these funds will come from public and private sources, including $60 billion in bilateral finance and a further $90 billion through multilateral development banks.
Schomberg, W. & Piper, E. (2021, June 14). More needed: G7 nations agree to boost climate finance. Reuters. Retrieved from https://www.reuters.com/business/sustainable-business/g7-leaders-commit-increasing-climate-finance-contributions-2021-06-12/
Hook, L. (2021, June 18). UN climate talks hit a wall over tensions about finance. Financial Times. Retrieved from https://www.ft.com/content/5072b2be-17ed-4c20-a0e5-e631f17a8d5b
PHOTO CREDIT: G7 Members by The White House – P20210611AS-0528, Public Domain, https://commons.wikimedia.org/w/index.php?curid=106962061