A fair and inclusive climate finance policy is urgently needed to realize net-zero emissions target by 2050, experts told Anadolu Agency in an exclusive interview.
The urgency has partly been spurred by the failure of G7 leaders at the 47th G7 summit in June to deliver concrete steps to stop the financing of fossil fuels or a clear date to end coal use.
'There is an expectation for a pathway on climate finance-related issues from the G20 as the G7 leaders did not really live up to the expectations last month,' Sima Kammourieh, a senior policy advisor at climate change think-tank E3G, said. '
The G20 Finance Ministers will meet between 9 and 10 July under Italy's 2021 G20 Presidency to focus on tax, climate and sustainable finance, offers an opportunity to ensure a clear path on climate financing and form a tangible solution just before the critical COP26 meetings in November.
An International Conference on Climate Change focusing on financing the climate transition in emerging and developing countries will follow in which a number of high-level speakers from the international finance world will convene, including the International Monetary Fund (IMF) Managing Director Kristalina Georgieva, the US Treasury Secretary Janet Yellen and the President of the European Central Bank, Christine Lagarde.
Kammourieh warned the G20 leaders that if they do not deliver the agenda needed for global prosperity and a roadmap before the COP26, it will be very hard for the G20 to deliver by the end of this year.
The UK will host the 26th UN Climate Change Conference of the Parties, or COP26, in Glasgow between Nov. 1 and 12 this year.
'We need to see a clear agenda that recognizes the clear priorities that need to be addressed before the end of 2021 and G20 countries will meet again in October to deliver on concrete actions and reach consensus,' she said.
-Solidarity for all countries required for success
Kammourieh stressed the importance of reaching a consensus on the climate finance policy at the G20 meeting that should be inclusive and fair to equip vulnerable countries adequately.
'Now, I think we have a window and I would characterize it as a bit of last change because if countries do not recognize the gaps on the climate agenda at this G20 meeting, it is going to be very challenging for them to deliver what they need in October,' she said.
In recognition of the financial difficulties that developing and emerging countries face with not only the climate crisis and making a transition to net-zero emissions but also with the coronavirus pandemic, she advised that the solution is not in telling the developing and emerging countries necessarily what their path should be but in ensuring solidarity for all countries to succeed.
According to International Energy Agency's net-zero roadmap for 2050, the annual investment needs worldwide are $5 trillion by 2030 and $4.5 trillion by 2050.
For emerging and developing economies, this amount is over $1 trillion.
-Developing countries wary of 'hypocrisy' of developed countries
Tim Buckley, the director of energy finance studies at the Institute of Energy Economics and Financial Analysis (IEEFA), was critical of false promises made by developed countries and said it was time for them to do their share towards a fair climate finance policy.
“Talk is cheap and there has been plenty of talk from the developed countries and the Organization for Economic Co-operation and Development (OECD) over the last 5 years,” he said.
'The upcoming meeting under G20 could be a real test for them to deliver some tangible actions and funding,' he said. 'We need to see a path that is consistent with net-zero targets. Otherwise, the G7 becomes a joke when it comes to the COP26.'
'At the G20 Finance Ministers meeting, I hope that they will talk more about a carbon border adjustment mechanism, but I think it is clear that India, like Turkey and other developing countries, is a little tired of the hypocrisy of the OECD and is looking for tangible evidence of firm action by the developed countries,' he said.
India's Environment Minister spoke out against a carbon border adjustment mechanism as a trade restraint against developing nations given the lack of tangible financial support from the G7 or the OECD to emerging countries.
'At the end of the day, countries like India or Turkey will do the right thing because the global capital markets will fund solutions and those solutions are most important in the emerging markets but we need governments to deliver on their policies,' he said.
However, Buckley noted that global financing is moving away from fossil fuels regardless of government policies.
He said financial markets are 'fleeing' the coal sector and the number of institutions announcing new or improved coal exit policies has increased by 68% year on year.
Among the latest institutions is China's largest bank, ICBC, with its announcement that it will stop funding a $3 billion coal-fired power plant in Zimbabwe.
China is the world's largest coal investor and emitter, while the US is the second biggest but historically the largest emitter.
By Nuran Erkul Kaya