Driving forward, the implementation of the Paris Agreement and the 2030 Agenda in a coherent and mutually supportive manner is a significant opportunity for modernising our economies, enhancing competitiveness, and stimulating employment and growth.
The 2019 Group of 20 (G20) summit, in Osaka, Japan is being held at a time when the biggest threat to world economy — climate change — is confronted with multiple political and economic challenges. First, the United States has continued to pursue regressive policies on climate action and remained the sole holdout at the G20 meeting in Buenos Aires last year to discuss the progress of the Paris Agreement. Secondly, the most comprehensive stock-take on climate action, the Brown to Green Report 2018 by Climate Transparency found that 82% of energy in G20 countries are still led by fossil fuel industry- coal, oil and gas. This leaves a significant gap in meeting the global emission reduction targets. Under the current scenario, the world is on the course for a 3.2C rise in average global temperatures, more than double the lower Paris Agreement threshold of 1.5C - that is believed to be the last window of opportunity to save the world from adverse and disastrous impacts of climate change.
However, the climate change crisis offers G20 an opportunity to prove the value of multilateral institutions and reaffirm the world’s faith on the power of ‘collective action’ in addressing the greatest global challenge of the century. G20 accounts for about two-thirds of the world's population, 85% of the gross world product and 75% of the greenhouse gas emissions. As one of the most powerful forum of the world's biggest economies, with its influence extending through financial markets to commodities, infrastructure and energy sectors, G20 could establish that climate action is in the economic and security interest of all nations.
India has emerged as a key G20 member who has significantly influenced the ongoing process of reshaping the world’s economic and financial order. India strongly believes that stabilising the world economy and financial markets require joint efforts to mitigate climate risks. For India, it is therefore imperative that G20 leads the global transition in adopting a low emission pathway and promote the growth of resilient economies. The alignment of G20 policies with the climate action is high on India’s agenda.
The expectations of India, as of the rest of the world, from the upcoming summit are likely to be centred around bringing a new momentum to the discussions around climate goals, that would provide long-term direction and certainty through adaptation of common guidelines, including strengthening innovation and employment in future-oriented industries and supporting developing nations in an ambitious implementation of the Paris agreement.
Addressing climate change would require huge investments in infrastructure to facilitate sustainable development. $90 trillion is expected to be spent on infrastructure in the next 15 years, doubling the world's stock of infrastructure on the ground today. While the G20 is focused on pursuing "quality" infrastructure, efforts to rigorously include climate resilience in the definition have failed so far. In the face of increasing climate risks on world economy, it is imperative for the G20 to include elements of both low-carbon pathway as well as resilience to climate change impacts in defining infrastructure development. India recognises the high vulnerability of economies, particularly the developing ones, to the significant loss and damage caused by increasingly intense climate-induced disasters and expects G20 to establish appropriate political frameworks, financing instruments and economic incentives to boost investments in climate-resilient infrastructure and to mobilize the resources required to implement such projects, India is seeking the Global Coalition for Disaster Resilient Infrastructure (CDRI). The sharing of the country’s experiences and promoting efforts for adaptation and resilience-building under the new Adaptation Work Program of the Climate Sustainability Working Group could provide direction for enhanced measures on resilient infrastructure.
India hopes that the energy transition, accelerated by the Paris Agreement, must continue at an unprecedented scale and speed. Among the G20 countries, only India is on course to stay below the 2C warming limit. The 2009 Pittsburgh G20 communique included a momentous commitment to "phase out and rationalize over the medium-term inefficient fossil fuel subsidies while providing targeted support for the poorest." However, the G20 nations have spent $147bn, an increase of about 50% in subsidies over the past 10 years, although they pledged to phase them out more than a decade ago. Ironically, Japan- this year’s G20 presidency- has continued to export fossil fuel infrastructure through financing fossil fuel projects or exporting technology used in fossil fuel infrastructure. One of the key reasons for scanty progress in phasing out of fossil fuel subsidies is the lack of definition of ‘medium term.’ The G20 therefore needs to set a clear timetable given the increased urgency to drawdown carbon emissions. Learning from peers such as Indonesia’s cap on the diesel subsidy and scrapping subsidies for petrol in 2015, could provide lessons for other countries working to reform their consumer subsidies. G20 must recognise that a secure, economically efficient, greenhouse gas-neutral energy supply is a basic prerequisite for economic growth, stability and prosperity.
As one of the country’s leading the world in green energy transition, India expects the G20 to give an action-oriented approach to the Energy Action Plan that could assess the accessibility and affordability of energy in developing economies, create a reliable investment environment to promote de-carbonization initiatives and build on the Energy Efficiency Leading Program.
The expected transition to a lower-carbon economy would require about $3.5 trillion in investment in the energy sector in the foreseeable future, generating new investment opportunities. However, companies investing in projects vulnerable to climate-related risks may be less resilient to the transition and investors may experience lower returns. The G20 must therefore enhance work under the Task Force on Climate-related Financial Disclosures and provide a framework to help organizations identify and report climate-related financial disclosures and help investors assess climate-related risks and opportunities.
It is opportune that Japan holds the G20 presidency this year. The G20 under Japan’s leadership can rightly establish that there are significant opportunities in the global pivot towards climate resilience and energy transitions. Japan has announced the implementation of its recently adopted long-term strategy of a "decarbonized society" through a virtuous cycle of innovation. The country has embarked on ambitious measures toward the reduction of GHG emissions by 80% by 2050 and strongly supports relevant technologies such as hydrogen, carbon capture, utilization, and storage (CCUS) and carbon recycling. Japan should collaborate with G20 members and promote private finance, and business environment for deployment of innovation towards climate goals.
India has long-standing strategic relation with Japan and a shared history of successful development cooperation with a thriving partnership in the areas of climate and energy in recent times. India and Japan have strengthened bilateral cooperation in energy development and promoting well-functioning energy markets of Electric Vehicles (EVs) through policy dialogue on next generation/Zero emission vehicles. Both the countries recognise that climate risks on the economy could be better managed by linking climate and energy policy more closely. A secure, economically efficient and greenhouse gas neutral energy supply accessible to everyone, in line with the Paris agreement, is a fundamental prerequisite for global economic growth and sustainable development. Japan can thus expect complete cooperation and support from India at the forthcoming G20 summit.
Politically, the relationship between other G20 countries and the US (particularly the Trump administration) is likely to remain complicated. India expects the Japan G20 presidency to convincingly demonstrate that climate change has a high cost and is a risk multiplier that jeopardises the past and future progress of the global economy.
Driving forward, the implementation of the Paris Agreement and the 2030 Agenda in a coherent and mutually supportive manner is a significant opportunity for modernising our economies, enhancing competitiveness, and stimulating employment and growth. The G20, therefore, needs to demonstrate the power of numbers and guide the future of global climate governance.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Aparna Roy is a Fellow and Lead Climate Change and Energy at the Centre for New Economic Diplomacy (CNED). Aparna's primary research focus is on ...Read More +
Monica Marcela Jaime Torres University of Concepcin ChileRead More +