Source: Energy & Management Powernews, June 29, 2022
The leading Western industrialized countries, G7, have reaffirmed their commitment to climate protection. The "climate club", initiated by Germany, is to be formed by the end of the year.
In the final declaration of the summit, which ended at noon in Elmau, Bavaria, the leaders of Germany, France, the United Kingdom, Italy, Japan, the United States and Canada stressed that greenhouse gases must be reduced by 43% worldwide by 2030 in order to implement the Paris climate agreement. To that end, the G7 wants to step up its own efforts and increase its financial assistance "to multilateral funds and bilaterally."
The G7 has adopted the idea of the "climate club" proposed by Germany in general terms. It is to be formed by the end of the year, with the aim of preventing the relocation of industrial operations due to climate policy burdens. The club is to be open to all countries that want to implement the Paris Agreement, and it is to be built on three pillars:
- ambitious and transparent climate targets,
- a clear timetable for transforming industry, building a hydrogen economy and growing green markets, and
- international cooperation to promote the energy transition.
In addition, the Climate Club is to look after partnerships for a just energy transition with developing countries. The partnerships are to provide for the necessary technology transfer as well as for more transparency in climate policy and its financing.
The sale of zero-emission vehicles is to be "significantly increased" by 2030. Public subsidies for coal-fired power generation are to be halted by the end of this year, "except in clearly defined and limited" exceptions. Investment in liquefied natural gas is justified under the circumstances to replace coal and become less dependent on Russia, he said. Green hydrogen and products made from it play a key role in decarbonizing industry and should be promoted, he said. The G7 electricity industry should be "predominantly carbon-free" by 3035.
Climate change funds for developing countries will be doubled
The G7 reaffirmed the developed countries' goal of $100 billion annually for climate change mitigation in developing countries and at least twice as much funding for climate adaptation in 2025 as in 2019. Funding for disaster relief, including risk financing through insurance, is to be substantially increased. Great importance would have in this context stable financial markets, in particular to mobilize private investment.
Subsidies for the use of fossil fuels, it further says in the Elmau statement, are not compatible with the Paris Agreement and "inefficient subsidies" must be dismantled.
In their climate goals, the G7 do not want to make any concessions because of the increased energy prices due to the Russian war in Ukraine. One would continue the efforts to become independent of Russian oil and gas. Russia should not profit from its aggression against Ukraine. The G7 support the EU's attempt to enforce maximum prices for imported oil and gas. This could involve interventions in the transport sector, which Russia relies on to transport oil. At the same time, the access of poorer countries to the international oil market should remain open.
Together with the International Energy Agency, IEA, the G7 want to consider how a further increase in energy prices "in the G7 countries and worldwide" can be avoided. To this end, their own reserves are to be exploited to a greater extent. The producing countries in general and OPEC in particular are called upon to contribute to easing tensions on the international energy markets.
Author: Tom Weingärtner
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