The ministers responsible for climate and environment of the Group of Seven (G7) nations, the world’s seven largest advanced economies, agreed on 21 May to stop international financing of coal projects that emit carbon by the end of this year and to phase out financial support for all fossil fuels to meet their commitment to the 2015 Paris Agreement. The target of the Paris Agreement is to cap the rise in the Earth’s temperatures to as close as possible to 1.5°C above preindustrial times.
“In building back better from the pandemic, we stress our determination to put climate, biodiversity, and the environment at the heart of our COVID-19 recovery strategies and investments,” the ministers wrote in a joint communiqué, in which they committed to making their 2030 ambitions consistent with the aim of achieving net-zero emissions as soon as possible and by 2050 at the latest.
The communiqué stated that urgent and concrete action is needed to move toward global sustainability, further mitigate and adapt to climate change, and halt and reverse biodiversity loss and environmental degradation.
“We recognize that climate change and the health of the natural environment are intrinsically linked and will ensure that the actions we take maximize the opportunities to solve these crises in parallel,” the ministers said. They also said that the COVID-19 pandemic was a reminder that increased contact between humans, wildlife, and livestock as a result of human activities—including those contributing to climate change—has increased the risk of zoonotic disease emergence and spread. Zoonotic diseases are those that are transmissible from animals to humans under natural conditions.
Hard Stop to Coal Financing
“We will phase out new direct government support for carbon-intensive international fossil fuel energy, except in limited circumstances at the discretion of each country, in a manner that is consistent with an ambitious, clearly defined pathway toward climate neutrality in order to keep 1.5°C within reach, in line with the long-term objectives of the Paris Agreement and best available science,” the ministers wrote. “Consistent with this overall approach and recognizing that continued global investment in unabated coal power generation is incompatible with keeping 1.5°C within reach, we stress that international investments in unabated coal must stop now and commit to take concrete steps toward an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021, including through official development assistance, export finance, investment, and financial and trade promotion support.”
Coal is considered unabated when it is burned for power or heat without using technology to capture the resulting emissions.
According to Reuters, Alok Sharma, president of the 2021 United Nations Climate Change Conference, known as COP26 and set to be held in Glasgow, Scotland, has made halting international coal financing a “personal priority” to help end the world’s reliance on the fossil fuel, calling for the summit in November to be the one “that consigns coal to history.”
Saying they recognize that coal power generation is the single biggest cause of global temperature increases, the ministers committed immediately to rapidly scaling up technologies and policies to further accelerate the transition away from unabated coal capacity and to an overwhelmingly decarbonized power system in the 2030s. They also emphasized the importance of providing support for affected workers, regions, and communities.
The ministers also mentioned moving away from international fossil fuel financing, although they gave no specific date.
More Financing for Climate Mitigation and Adaptation
While agreeing to pull funding for carbon-heavy energy development, the G7 ministers also said they are working intensively, both individually and collectively, to increase the financing for climate mitigation and adaptation actions. These include deepening efforts to advance gender equality and diversity in the energy sector and committing to targeting greater levels of innovation funding to lower the costs of industrial decarbonization technologies, including the use of hydrogen; electrification; sustainable biomass; carbon capture, use, and storage (CCUS); and synthetic fuels (including ammonia and fuels made from hydrogen).
“We will step up efforts to advance commercial-scale hydrogen from low-carbon and renewable sources across our economies, including support for fuel cell deployment globally,” the ministers said.
According to the communiqué, the G7 countries are also working intensively to increase financing for nature and nature-based solutions—also called natural climate solutions—that involve conserving, restoring, or better managing ecosystems to remove carbon dioxide from the atmosphere. The ministers have reaffirmed their commitment to a collective goal of jointly mobilizing $100 billion annually from 2020 through 2025 for these solutions.
The ministers called on multilateral development banks (MDBs), bilateral development finance institutions (DFIs), multilateral funds, public banks, and export credit agencies to ensure that their financial flows are aligned with the goals of the Paris Agreement and support the objectives of international biodiversity conventions. They also challenged all MDBs to publish, before COP26, a plan and date by which their operations will be aligned with and support the goals of the Paris Agreement and urged them to commit their private sector arms to pilot and scale up private finance programs for nature and climate, particularly in underfunded sectors such as adaptation and resilience and nature-based solutions.
With regard to energy storage, the ministers wrote, “We recognize the role of energy storage as an enabling technology to support the transformation of the global economy toward a net-zero pathway. We commit to drive energy-storage technology innovation and accelerate its commercialization and deployment by supporting the private sector in reducing the cost and increasing the performance of energy-storage technologies, through policies and tools supportive of energy-storage market adoption, including regulatory frameworks and market structures.”
Solidarity and Criticism
The members of the G7 nations—the United States, Britain, Canada, France, Germany, Italy, and Japan—plus the European Union called on all countries to join them in action. A Reuters news article quoted US Climate Envoy John Kerry as urging the countries in the Group of 20 (G20), the world’s largest economies, to match the measures agreed upon by the G7 nations. “We call on all G20 countries now and all other major economies to join with us. This is not just a one-off event, we hope. It is critical to the goals that we all have for Glasgow,” he said in a news conference.
However, some green groups said that, although they welcomed the steps, the G7 needed to set a stricter timetable. Reuters quoted Rebecca Newsom, head of politics at Greenpeace UK, as saying, “Too many of these pledges remain vague when we need them to be specific and set out timetabled action.”
In its starkest warning yet, the International Energy Agency said investors should not fund new oil, gas, and coal supply projects if the world wants to reach net-zero emissions by midcentury. The number of countries that have pledged to reach net zero has grown, but, even if their commitments are fully achieved, there will still be 22 billion tons of carbon dioxide released worldwide in 2050, which would lead to a temperature rise of approximately 2.1°C by 2100, the agency said in its Net Zero by 2050 report.
For Further Reading
G7 Climate and Environment: Ministers’ Communiqué, May 2021
Net Zero by 2050, A Roadmap for the Global Energy Sector
