Opinion

G20 climate commitments must be turned into action

The G20 is just about holding together in difficult times, but the world's leading economies need to make good on their climate promises. Major projects such as China's One Belt One Road initiative and the G20 Compact for Africa must incorporate sustainability criteria, or it will be impossible to meet the Paris goals.

By: Date: August 17, 2017 Topic: Global Economics & Governance

 

This opinion piece was also published in Caixin, Capital, Dienas Bizness, Expansión, Hospodárske Noviny, Jyllands-Posten, Kathimerini, Nikkei, Nikkei Asian review and Público.

 

After Hamburg’s recent G20 meeting, what will remain beyond bitter memories of shameful rioting? There was a remarkable show of unity on trade, Africa, women’s empowerment and many other issues. But the G20 was not united on climate change. The United States refused to sign a declaration re-confirming the commitment of the other 19 countries that they would continue to support the Paris agreement. Yet, the US did announce a desire to “lower emissions” while supporting energy security and helping other countries to “use fossil fuels more cleanly and efficiently”.

This division in the declaration marks a substantial divergence in declared policy approaches. But even more important than declarations will be actions. The US pledge to help other countries, mostly less-developed countries that are not part of the G20, to use fossil fuels more cleanly should not become a meaningless declaration.

All too often, countries that are in need of basic infrastructure investment, access to power, transport and clean water still turn to cheaper and more readily available 20th century technologies. This means fossil fuels. And every coal power plant built now will be in use for 40 years, contributing to climate change. As urbanisation progresses, it will be of fundamental importance to climate change whether the new cities will have a low or a high carbon footprint. Will their transport system be based on fossil fuel cars, and will they be built in a way requiring major air conditioning or relying on green cooling? These choices will be of central importance for whether the Paris climate agreement goals can be met.

If it wants to achieve the Paris climate goals, the G20 needs to show leadership in helping developing countries to build low carbon infrastructure as they develop. In particular, the role that China plays will be fundamental. China’s “One Belt One Road” initiative is probably the largest infrastructure project in the world right now. Its aim is to connect countries across the Asian continent and also Africa and Europe. The infrastructure needs and urbanisation tendencies in the region will be substantial, so incorporating a sustainability element in the “One Belt One Road” initiative would be an important concrete step to reduce greenhouse gas emissions.

The EU and China could usefully collaborate on this important sustainability dimension of “One Belt One Road”. Europe has advanced technology that can be easily deployed. European banks could also be interested in becoming co-financers of green investments. Joint leadership on climate change from China and the EU could be a game changer for this large Chinese investment initiative.

The G20 has also agreed on a “Compact for Africa”, and a sustainability element should also be built into the help that will be granted to private firms investing in African countries. Africa, with its fast growing population, is one of the continents where the future of climate change will be decided. Again, the primary goal should be to deploy renewable energies as infrastructure gets developed. And again, G20 countries need to put words into action. Yet, there may be countries preferring to largely deploy fossil fuels. Ideally, G20 members should encourage these countries to use the most efficient technologies and US support in this regard may be useful.

On the whole, the G20 faces the same challenge as all the party members to the Paris agreement: how to turn bold promises into concrete action. And the need to act is nowhere more urgent that on climate change. Prioritising sustainability in the massive infrastructure investments that the Chinese “One Belt One Road” and the “Compact for Africa” may trigger will be of utmost importance to achieve our climate goals.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to communication@bruegel.org.

View comments
Read article More on this topic More by this author

Podcast

Podcast

Brexit consequences for EU climate and energy policy

Bruegel fellow Georg Zachmann joins Richard Tol, professor in the Department of Economics at the University of Sussex, and Pieter-Willem Lemmens, head of analysis at the climate policy think-tank Sandbag, for this episode of 'The Sound of Economics', to discuss the impact of Brexit on climate and energy policy in the European Union.

By: The Sound of Economics Topic: Energy & Climate Date: February 15, 2018
Read article More on this topic More by this author

Opinion

Climate policies risk increasing social inequality

The aggressive political interventions needed to effectively counteract climate change will make the rich richer and the poor poorer, if social concerns are not given greater prominence in policy debates.

By: Georg Zachmann Topic: Energy & Climate Date: February 8, 2018
Read article More on this topic More by this author

Blog Post

EU budget: Expectations vs reality

The public's impressions of where money is spent in the European Union can often be wide of the mark. But whether this is a result of wishful thinking or just a lack of information remains unclear.

By: Yana Myachenkova Topic: European Macroeconomics & Governance Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU long term climate change strategy

This meeting, which will take place in Czestochowa, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Czestochowa, Poland Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU Long Term Climate Change Strategy

This meeting, which will take place in Copenhagen, is part of the project “Developing the EU long-term climate strategy".

Topic: Energy & Climate Location: Copenhagen, Denmark Date: January 26, 2018
Read article More on this topic

Blog Post

Climate change adds to risk for banks, but EU lending proposals will do more harm than good

Climate change is a relevant risk factor for the banking sector, but the European Commission's plan to lower capital requirements for greener investments is irresponsible in encouraging banks to forego proper risk management.

By: Arnoud Boot and Dirk Schoenmaker Topic: Energy & Climate Date: January 16, 2018
Read article More by this author

Opinion

China Fails to Woo U.S. With Financial Sector Opening

China's recent announcement of reforming its financial market has received little enthusiasm from the U.S. despite its potential benefits. The lack of a clear agenda regarding its economic rival has pushed the Trump administration to minor any significant progress of China's reform, and to maintain focus on strategic issues.

By: Alicia García-Herrero Topic: Finance & Financial Regulation, Global Economics & Governance Date: January 5, 2018
Read article

Opinion

Chinese banks’ improved asset quality cannot hide other phantoms

The recent improvement in asset quality cannot mask other growing concerns in China’s banking sector. Beyond liquidity concerns, other structural issues such as low profitability and insufficient generation of organic capital, are emerging.

By: Alicia García-Herrero and Gary Ng Topic: Finance & Financial Regulation, Global Economics & Governance Date: December 20, 2017
Read article Download PDF More on this topic

External Publication

Central Asia—twenty-five years after the breakup of the USSR

Central Asia consists of five culturally and ethnically diverse countries that have followed different paths to political and economic transformation in the past 25 years. The main policy challenge for the five Central Asian economies is to move away from commodity-based growth strategies to market-oriented diversification and adoption of a broad spectrum of economic, institutional and political reforms

By: Marek Dabrowski and Uuriintuya Batsaikhan Topic: Global Economics & Governance Date: November 14, 2017
Read article More by this author

Blog Post

European worries about isolationist trends

Populist shocks in the UK and US threaten the multilateral order on which the EU depends. What lies behind these earthquakes, and what does it mean for Europe? Withdrawing from the world is no solution to geo-political upheavals, but Europe needs to reassess the future of globalisation.

By: Maria Demertzis Topic: European Macroeconomics & Governance, Global Economics & Governance Date: November 7, 2017
Read article More on this topic More by this author

Blog Post

Long-term growth potential, or dead in the long run?

By linking growth with both employment and the imperative for India to hold its own with China for strategic autonomy, Prime Minister Modi has brought sustainable, high quality, inclusive economic growth to the centre of political discussion, which is where it rightfully belongs.

By: Suman Bery Topic: Global Economics & Governance Date: October 5, 2017
Read article More on this topic More by this author

Blog Post

Chinese banks: An endless cat and mouse game benefitting large players

As deleveraging moves up in the scale of objectives of the Chinese leadership, banks now face more restrictions from regulators. As a result, banks have been very creative in playing the cat and mouse game in front of evolving regulations.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: September 26, 2017
Load more posts