Reflection on 2021 G20’s Impacts and Outcomes

This year G20 took place in Rome, Italy under the Italian Prime Minister Leadership. This summit had a bigger task than usual, given that the global economy lost more than $ 8 trillion in GDP since Covid began in 2020. This summit became the facto the opening ceremony for the COP26 Climate Summit which started on November 1st in the UK. The G20 was established in 1999 as a consultation forum for the world largest economies, while giving a stronger representation to those economies not included in the G7. This consultative group (led by Minister of Finance and Central Bank Governors) aims to ensure that the international community is equipped and coordinated in its efforts to build a stronger financial system, while also focusing on sustainability and international development. The G20 include 19 countries plus the European Union. These countries combined represent approximately 90% of global GDP, 80% of global trade, and 74% of global carbon emission. Several key G20 countries, namely Brazil, China, Japan, Mexico, Russia, Saudi Arabia, and South Africa did not attend in person. China is the largest carbon emitters, Saudi Arabia, and Russia, respectively are the second and third largest oil producers in the world. Their absence in Rome, sent a negative message in terms of their commitment to help manage the climate crisis.

What happened in Rome? While the G20 meetings helped consolidate the sense of urgency to restore economic stability and manage climate risk, it did not deliver a clear path to accelerate decarbonization and climate resilience.

Three of the key climate agenda items that were prioritized in Rome and that will continue in Glasgow were: reduce methane gas emissions; phase out coal energy production, and deliver 100 US$ billion a year in climate finance to developing countries:

Methane gas emission reductions: One area where the G20 aimed to find consensus in the pledge to slash methane emissions by 30% by 2030 against 2020 levels. This is not only achievable, but also prioritized by key polluters such as the United States, Canada and Saudi Arabia. This is a key mitigation effort that can be done cost effectively, essentially by capturing the natural gas that is flared into the atmosphere for safety reasons. This would save the planet at least 0.2°C (0.36°F) by 2050. Methane is at least 84 time more potent in global warming terms as opposed to CO2, even though its life span is shorter. The G20 acknowledged that methane emissions “represent a significant contribution to climate change” but failed to endorse the Global Methane Pledge, which Australia has refused to sign.

Invest 100 US$ billion a year in climate finance in developing countries: One of the negotiations items debated in Rome, is the rich countries commitment to fulfill their longtime investment of $100 billion a year in climate and resiliency as committed through the Paris Accords in 2015. The debate is tricky particularly because, climate risk, it is still perceived by many as a low probability risk. Think for a second, in the United States, the $ 3.5 trillion dollar infrastructure plan (with billions of dollars earmarked for the climate agenda), which if approved would place the US in a strong climate standing, is being blocked and watered down by 2 senators from the states of Arizona and West Virginia. What I mean is, global investments will have to go through the local short-term decision-making process. The G20 in Rome did not help formalizing the 100 US$ billion commitments further and we will have to wait until 2023 for these commitments to materialize.

Phase out coal energy production: The G20 leaders pledged to end the provision of international public finance for new coal power generation abroad by the end of 2021 and boosting international finance for green investment. The G20 will continue to prioritize this coal phasing out debate to ensure that carbon mitigation efforts accelerate. However, the did not provide a specific timescale for the entire phasing out of coal power as an energy source, nor did they commit to stop building new coal fired power plants.

Conclusion: Overall, the G20 summit did little to move the needle on the most pressing climate challenges. As I take stock of the outcomes of the G20 meetings, and its official closing statement, I conclude that none of the G20 commitments are on a credible trajectory to help reach net-zero goals by 2050. The G20 fell short on any tangible steps in the decarbonization and resiliency efforts. This was well captured in a tweet by the UN Secretary general who said ” I leave Rome with my hopes unfulfilled”. To make my point even clearer, just twelve G20 members have committed to reach net zero by 2050, which means that almost 50% of the countries responsible for the largest portion of global carbon emissions are not willing nor able to implement what they have agreed in Paris in 2015.

Let’s not fool ourselves, neither the G20 nor the COP26 will resolve the short climate crisis and concerns, they will however, thanks to the reinvigorated US global leadership, cement the good momentum towards a more “crisis mature” and resilience focused international community.