3.4
IMPROVING PUBLIC FINANCE
Trillions needed from the G7 and G20 for the climate emergency
T he world must rapidly raise trillions of dollars for a just clean energy transition and nature conservation amid the current climate change crisis. In parallel, it must also begin the long overdue careful planning and action needed to end all financial investments and infrastructure in fossil fuels. Here the G7 and G20 members play a central role, accounting for about 45% and 80% of global gross domestic prod- uct, respectively. The supply chains of these clubs’ energy and extractive industries have tentacles that span the world; their members’ histor- ical and projected emissions have systemic significance for destabilis- ing the climate system that cannot be understated in terms of its impacts on human, animal and plant health and well-being. The G20 – which includes all G7 members – accounts for nearly 80% of all global emissions. A closer look at their compliance Despite this wildly disproportionate contribution – just 19 countries and the multinational fossil fuel compa- nies headquartered in them, throwing an entire planetary system out of equi- librium – the G20’s compliance with its climate finance commitments is under- whelming, averaging only 66%. The G7 performs better with its own such commitments, with 73% com- pliance. These percentages reflect the clubs’ compliance with commitments
As we can only manage what we measure, it is vital to explore how these groupings are com- plying with their commitments to sustainability and financing. Brittaney Warren, director of compliance and sustainability governance, Global Governance Program
to increase climate financing, includ- ing through contributing to recognised international climate funds such as the Green Climate Fund, providing adap- tation financing or unlocking private sector climate investments. That compliance also includes G7 and G20 efforts to meet their oft-repeated commitment to raise $100 billion annually for developing countries by 2020, a deadline later extended to 2025. The G20 Research Group’s research does show steady progress towards this goal. On average, the G7’s com- pliance with this commitment, from the four years tracked, stands at 77%. However, the G20’s compliance, tracked over two years, is a meagre 46%. These numbers are corroborated by Oxfam, which found the G20 members are failing to do their fair share to respond to the climate emergency. Still, accord- ing to the Organisation for Economic Co-operation and Development, as of spring 2024, developed countries did finally meet and surpass their $100 billion goal. This pledge is long overdue, but much more is needed now. Eradicating subsidies To respond effectively to the climate emergency, in addition to increasing climate finance, countries must also decrease fossil fuel subsidies. Since the G20’s 2009 Pittsburgh Summit, its members have committed “to phase- out and rationalize over the medium term inefficient fossil fuel subsidies
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Financing a Just Transition
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