What are G20 members really doing about climate change?

This article first appeared on The Fifth Estate website on 6 Sept.

How are the members of the G20 rich nations club performing in their efforts to meet the challenge of climate change? A new report prepared for a recent G20 summit says: “Not enough. Must do better.” It urges them to drastically improve energy intensity and phase out support for fossil fuels.


Amid the plaudits for China and the US ratifying the Paris Agreement is the knowledge that the world’s greenhouse gas emissions are still rising, and that the G20 is responsible for three quarters of these emissions.

A new report from Climate Transparency, a conglomeration of global NGOs dedicated to urging climate action, analyses the relative performance and investor-readiness of the world’s richest economies in moving to a low-carbon state.

It challenges them all to submit plans by 2018 detailing how they will decarbonise by the middle of this century and to commit to basing their infrastructure investment on keeping the global average temperature increase to well below 2°C, and to encouraging green investment.

Climate Transparency says that to achieve these aims a realistic price for carbon is vital, whether achieved through a tax, levy or emissions trading.

Absolute emissions by G20 countries must be drastically reduced in the near future; between 1990 and 2013 their energy-related CO2 emissions actually increased by a depressing 56 per cent.

Per capita emissions in the G20 nations.

If global emissions are averaged on a per person basis, then in 2013 everyone in the world was responsible for 5.7 tonnes of carbon dioxide-equivalent emissions a year.

The report says that to keep global temperature increase below 2°C this must be reduced to around two tonnes per person – in other words we must each have our emissions cut by two thirds.

The G20 scorecard

How G20 members perform in climate action in six key indicators.

So, how do the individual members of the G20 size up in the race to reduce emissions? Here are the headline results:

• All of them, except Brazil and Russia, are reducing the energy intensity of their economies.
• The UK has the lowest energy intensity, mainly because its economy is predicated largely on its services and financial sectors. Countries with large manufacturing sectors face greater challenges.
• Australia, Canada, Saudi Arabia and the United States have the highest per capita energy-related carbon dioxide emissions.
• India and Indonesia have the lowest emissions per person, but Brazil’s and India’s are rising as they develop.
• All G20 countries except Argentina and Saudi Arabia have implemented policies to encourage energy efficiency in buildings and emission performance standards for vehicles.
• Only half of the G20 members have published plans for reducing greenhouse gas emissions, or expect to do so.
• Only the UK and Japan have exceeded the climate policy framework specifications for boosting performance.
• G20 governments collectively provided almost AU$92 billion in subsidies for fossil fuel production between 2013 and 2014. Of these, Russia subsidised its sector by a whopping $31 billion, the United States over $26 billion and Australia and Brazil $5.8 billion each.

The urgent need to cut fossil fuel subsidies

In 2009 G20 leaders promised to phase out these fossil fuel subsidies.

Other NGOs put the figure for the G20’s subsidising of fossil fuels even higher. The Overseas Development Institute (ODI) and Oil Change International say it is more like AU$583 billion a year.

Insurance companies worth over $1.2 trillion last week demanded that G20 governments commit to phasing out these subsidies by 2020. Aviva, Aegon NV and MS Amlin, along with the Institute and Faculty of Actuaries and Open Energi, all signed a statement to this effect.

One of the main obstacles for decarbonisation continues to be plans for new coal-fired power plants. Amongst the most worrying of these is Australia’s commitment to supporting these in the Far East with dramatic expansions of coal mining that threaten the Great Barrier Reef.

G20 members’ support for coal.

South Africa and China both rely almost 70 per cent on coal for their energy, but others are also guilty: Australia (at 37 per cent), Germany (at 26 per cent) and Japan (at 25 per cent).

If all the plans for new coal-fired power stations were implemented it would double the world’s existing capacity. This must be halted, says Carbon Transparency.

G20 members’ support for renewable energy.

Renewable energy on the other hand is a big success story in the G20. It increased by 18 per cent since 2008. Leading countries are: Brazil, Canada, Italy, India, South Africa, Turkey and the EU.

Guess in which G20 country renewable energy actually declined between 2008 and 2013? Well, it was Mexico. That is expected to change.

How investor-ready is the G20?

The G20 countries score table for investor-readiness.

So if the G20 is to shift from brown to green energy, then countries must become what is termed “investor-ready” for renewables and energy efficiency.

The Carbon Transparency report ranks countries on their investment-readiness. It finds China, France, Germany, India, the UK and the United States are already attractive to investors.

What counts in this respect is the coherence and reliability of energy and climate policy, which provides confidence to investors. For example, Germany is now seen as not quite as attractive as it was because it has introduced caps on subsidies for renewable energy.

The least investor-ready countries are Russia, Saudi Arabia and Turkey. Both offer little support for renewables and their national grids are not yet adapted to their integration. Since President Erdogan took power in Turkey, energy policy has favoured coal at the expense of renewables.

Under global climate agreements eight developed countries in the G20 are supposed to offer cash to other countries to develop their low carbon economies.

But this is not yet sufficient. In 2013-14, France, Germany, Japan, the UK and the US each provided between US$1.2-8.4 billion.

Although that sounds like a lot of money, in relation to GDP it is low. If you look at it from this angle, Japan (at 0.18 per cent) and France (at 0.12 per cent) have the highest ratio of providing international climate finance per head of population.

At the bottom of this table are Canada (0.0008 per cent), Australia (0.001 per cent) and Italy (0.0003 per cent).

Reducing carbon intensity

If we are to move to a low or zero carbon economy and improve the living standard of everybody on the planet then carbon intensity must reduce equally everywhere. This means producing more with less polluting energy.

Carbon intensity varies wildly amongst the members of the G20. The least efficient is South Africa (at 925 gCO2 /KWh). It is followed by India, Australia and Indonesia, who all have electricity emissions intensities of over 800 gCO2 /KWh.

G20 members’ carbon intensity compared.

At the top of the electricity emissions intensity table are: Brazil (at 100 g CO2/kWh), Canada (at 161 g CO2/kWh) and France (at 67 g CO2/kWh), but Brazil and Canada can attribute their success to their large hydropower sectors and France to its high share of nuclear power.

None of them perform so well when compared with Norway, which beats the world with just 8g CO2/kWh.

So what are they all doing about it?

For the Paris climate summit all G20 states submitted Intended Nationally Determined Contributions. These were supposed to show what they were going to do about climate change.

However the emissions reductions stated in these documents only cover 15 per cent of those needed to reach under 2°C. To achieve that, the G20 members need to ramp their climate action ambition up to 2030 by six times.

Among the tools needed, besides climate finance, is carbon pricing. Common pricing makes it more expensive to pollute than not to pollute when producing energy.

Australia’s emissions trading system introduced this year is criticised because its baselines are so high that they don’t not require any emissions cuts. And it repealed its comprehensive carbon price mechanism in 2014.

Throughout the world, carbon prices vary significantly from below one US dollar a tonne of carbon dioxide to US$130 a tonne, with the majority (85 per cent) priced at less than US$10 per tonne. Ideally, the world needs to move to a harmonised system of carbon pricing.

Looking forward, here is a table of how the countries compare in their planned investments in energy:

G20 planned investments in energy

Conclusion: the transition is happening but the speed is yet too slow.

David Thorpe is the author of:

• Best Practices and Case Studies for Industrial Energy Efficiency Improvement (with Oung, K. and Fawkes, S. UNEP, 2016)
• A London Conversation: Business Briefing on Green Bonds (The Fifth Estate, 2015)
• The One Planet Life (Introduction: Jane Davidson. Routledge, 2015)
• Earthscan Expert Guide to Energy Management in Buildings (Earthscan, 2013)
• Earthscan Expert Guide to Energy Management in Industry (Earthscan, 2013)
• Earthscan Expert Guide to Solar Technology (Earthscan, 2011)
• Earthscan Expert Guide to Sustainable Home Refurbishment (Earthscan, 2010)

G20 nations squabble as COP21 looms

...But Green Bonds could bridge the commitment gap

Signed photo of the G20 leaders in Antalya.

Overshadowed by the terrible events in Paris, G20 leaders meeting last weekend could be forgiven for being preoccupied as they debated their communiqué on climate change ahead of COP21. This UN summit on climate change is now due to start in that very same city in less than two weeks' time.

These 20 countries, while a small minority of the world's nations who will be represented at the summit, are nevertheless the richest and most powerful.

Precious time was apparently spent on discussing whether reference to the 2°C warming limit should be included in the statement, with Saudi Arabia and India resisting. India didn't even want the G20 to interfere in the Paris talks and blocked a general reference to discussions on “periodic monitoring”.

But China has already agreed with France to this idea that there should be a five-year stocktaking assessment of national climate pledges.

The final statement did recommit the rich world to staying within the 2°C limit on global warming and to phasing out "inefficient" fossil fuel subsidies.

“We recognise that 2015 is a critical year that requires effective, strong and collective action on climate change and its effects,” the final communique said. “We reaffirm the below 2C goal.”

The statement added:

Climate change is one of the greatest challenges of our time. We affirm our determination to adopt a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC that is applicable to all Parties. Our actions will support growth and sustainable development.

But Laurent Fabius, the French foreign minister, said the “declaration was too weak” and had been rejected by the US and some EU countries.

"After long negotiations through the night, we managed to get the two-degree-goal into the agreement," German Chancellor Angela Merkel said afterwards. "However, we also made clear that a lot of negotiating remains to ensure that we make progress at the Paris climate summit. It has to be a success, and Germany will do anything to assist France."

On Wednesday this week the UK, where the industrial revolution began, committed also to phasing out its coal-fired power stations by 2050, although it did not commit to phasing out fossil fuels. Instead the Energy and Climate Change Secretary, Amber Rudd, announced that the country would build a new generation of gas-fired power stations. Gas-burning emits roughly half the greenhouse gas emissions of coal-burning for the same amount of power.

The G20 statement committed to "rationalising inefficient subsidies over the medium term", which did not provide the clarity sought by campaigners.

Coincident with the G20 summit, the Overseas Development Institute issued a report showing that its members are still subsidising coal, oil and gas production by a staggering US$452 billion per year.

“Heads of state could have provided a clear and powerful signal ahead of the climate summit by putting a date for the end of fossil fuel subsidies, and agreeing to stop funding fossil fuel projects around the world,” said Ümit Şahin from Turkish group İklim için (For The Climate).

Regarding the threat to the world economy of companies and investors being stranded with valueless fossil fuel assets, a proposal by the Financial Stability Board for a climate risk disclosure task force was kicked into the long grass with a promise to "ask the FSB to continue to engage with public- and private- sector participants on how the financial sector can take account of climate change risks”.

The idea was suggested by Bank of England Governor Mark Carney that businesses should be forced to reveal their carbon footprints so that investors could judge how exposed they are to the risk.

A reference to differentiation was removed from an early draft of the communiqué, though it was mentioned in a separate statement from Brazil, Russia, India, China and South Africa. These BRICS nations called for emissions pledges to be "differentiated" based upon national circumstances, thereby favouring industrialized nations doing more to limit emissions than developing ones.

There are no guarantees that climate financing will be part of the Paris agreement and even mention of the 2 degrees pledge is not backed up by commensurate measures, according to Kiri Hanks, energy policy adviser for Oxfam.

The Fifth Estate noted last week that there is a significant gap between the commitments, both financial and technical, made by national governments in their INDCs ahead of COP21, and the money and action required to keep global warming within 2°C.

But at a special salon held in the city of London last Thursday by the Fifth Estate, delegates from the real estate and banking industries felt optimistic that Climate Bonds (or Green Bonds) could fill this gap.

Sean Kidney, CEO, Climate Bonds Initiative, told those present at the salon that there is great enthusiasm in the financial markets for Green Bonds. 2015 has seen the issuance of these bonds climb to around US$50 billion and Sean predicted this would reach US$300 billion in 2016.

These bonds are issued with the proviso that they are spent on action to tackle climate change, whether by installing renewable energy or promoting energy efficiency and other low carbon infrastructure. They are favoured by pension and insurance funds because of their liquidity.

"People who hold them dispose of their non-green bonds first if they need to dispose of bonds at all," he said. This makes them more valuable in the secondary market. They also already fetch a good price in the primary market.

He said that they are most appropriate for the public sector and are being issued by municipalities around the world. He said the treasurers of all municipalities that have already issued them were, to begin with, "sceptical of Green Bonds, but after issuing them were fully converted because they received terrific feedback and lots of kudos for doing so."

"The goal we have, working backwards from the IEA's scenarios shows that we are not moving fast enough and most people don't understand the potential of green bonds and the fact that they are able to make rapid changes," Kidney said.

To this end, The Fifth Estate is shortly to publish an e-book on the topic, particularly in relation to energy efficiency in buildings. As buildings are responsible for between 30% and 40% of global greenhouse gas emissions but altogether comprise two thirds of global asset values, Kidney believes that the potential market is huge.

David Thorpe is the author of:

• The One Planet Life;
• Energy Management in Buildings;
• Energy Management in Industry;
• Solar Technology;
• Sustainable Home Refurbishment;
• Sustainable Transport Fuels;
• Solar Photovoltaics Business Briefing;
• Passive Solar Architecture Reference Book (due in 2015);
• Solar Energy Reference Book (due in 2015).

David Cameron fails to back the Green Growth Action Alliance

David Cameron, or Camoron as I have started spelling it, was in Mexico this week and witnessed the launch of a Green Growth Action Alliance, but failed to back it or mention the green economy in his keynote speech to the world's business and G20 leaders.

On Monday, the Prime Minister was at the G20 Business Summit (B20), which serves as a business advisory to G20 officials, where a Task Force on Green Growth attended by Mexican President Felipe Calderón urged Heads of State to adopt policies that will simultaneously help to green and grow the economy in environmentally, economically and socially sustainable ways.

Yet Camoron's speech made no mention of this.

The Green Growth Task Force is asking G20 governments to initiate negotiations to achieve a sustainable energy trade agreement, create a robust price on carbon through coordinated international policies, end fossil fuel subsidies and to direct a portion of carbon price revenues to support innovation in sustainable technologies.

The call to end subsidies for fossil fuels was the subject of a 24-hour "Twitter storm" begun by Stephen Fry and aimed at the G20 and Rio+20, on behalf of 350.org, which attracted over 100,000 tweets.

The Task Force also launched the Green Growth Action Alliance, whose honorary chairman is President Felipe Calderón. This new public-private partnership initiative of comprises 48 of the world’s largest energy companies, international financial institutions, and development finance institutions which aims to address the massive shortfall in financing the low carbon revolution globally.

Wind turbine manufacturer Vestas’ CEO Ditlev Engel explained that it will “boost public and private investment into green infrastructure. Each year, $1 trillion is needed to deliver the necessary infrastructure and to shift us onto a low carbon path.”

To attract finance, and monitored by the World Economic Forum, the Alliance will work with existing initiatives, such as the United Nations’ Sustainable Energy for All initiative, the Green Climate Fund (GCF), the International Development Finance Club (IDFC), currently chaired by Germany's promotional bank KfW, and the San Giorgio Group (a policy research collaborative initiative by the Climate Policy Initiative, the World Bank and the Organisation for Economic Cooperation and Development (OECD)), the Overseas Private Investment Corporation (OPIC), the Climate Policy Initiative and the United Nations Foundation.

Members of the Alliance include leading companies such as Accenture, Samsung, KfW Bankengruppe, Bank of America Merrill Lynch, Deutsche Bank Group, Vestas and Enel.

This is a powerful coalition. Again, Camoron made no comment.

Instead, in his speech he promoted trade as a way to lift developing countries out of poverty without a single reference to the green economy, or sustainable development, or the Rio+20 summit, or climate change or anything else apart from trade.

David Camoron just doesn't get it. He started his premiership giving hope to environmentalists and the green sector, and has been backsliding ever since.

Even his former chief scientific adviser, Sir David King, is incredulous at the missed opportunity deriving from Number 10 and the Treasury's capitulation to pressure from a narrow body of Conservative supporters.

It's not that he's in a country which doesn't understand this stuff. Mexico is so far the only nation in the world other than the UK to have a Climate Change Act, which is similar to the UK's and was passed in April. Like the UK's it requires future governments to meet regular emissions reduction targets, but its goal is ultimately to cut the nation's carbon emissions 50% by 2050, instead of the UK's 80%. Almost one quarter (24%) of electricity must be generated from renewable sources by 2024.

Camoron has not travelled south to Rio de Janeiro for the Earth Summit on Sustainable Development which opens today and is being attended instead by the Deputy Prime Minister, Nick Clegg, and Environment Secretary Caroline Spelman.

Amongst those travelling to Mexico with the Prime Minister were Hugh Richmond, Managing Director of ENER-G Natural Power, plus representatives of Diageo, Rolls Royce, Virgin Atlantic, the Confederation of British Industry (CBI), Chancellor George Osborne and Trade & Investment Minister Lord Green.