It’s difficult to cajole developing countries to abandon coal while reopening your own coal-fired power plants.
That’s the dilemma facing leaders of the G7 rich industrialized countries at their three-day summit starting Sunday. Dealing with gas shortages and the need to break free of Russian energy dependence, they’re looking to pour money into fossil fuels — but that doesn’t jibe with their message to poorer countries that they should make the jump to green energy to stop global warming.
Less posturing and more money.
Rather than browbeat developing countries with high-flown messages on climate change, the idea is to put up hard cash and other sweeteners to shift them away from fossil fuels.
“The world needs a positive investment impulse, and it needs it now,” Ursula von der Leyen, the president of the European Commission, said this week at a development conference.
The incentives could come in the form of energy investment deals, invitations to a climate club, offers of technological transfers and funding for innovation — all of which have been discussed in the run-up to the G7 summit.
The leaders of Senegal, India, Indonesia and South Africa have been invited as guests to join permanent members: the U.S., Canada, Japan, Germany, Italy, France, the U.K. and the EU. All four of those countries are now involved in talks with G7 countries about so-called Just Energy Transition Partnerships. These involve multibillion-dollar deals to wind down coal industries and replace them with green energy. The model is being trialed in South Africa.
These initiatives offer something more concrete than endless prodding at U.N. climate talks.
“I don’t know that it’s going to work, but to me, it seems more realistic. It seems to have a better shot of working,” said Zainab Usman, director of the Africa program at the Carnegie Endowment for International Peace.
Ina-Maria Shikongo, a climate activist from Namibia, said: “European investment can make the difference between African countries saddled with polluting technology from the last century that makes the climate crisis worse — or thriving economies built on safe and reliable renewable energy.”
The rich world’s awkwardness as it tries to spur a global shift to clean energy amid war, gas shortages and the hypocrisy of its own addiction to fossil fuels has been on full display in recent days.
“The root cause of our problems is our dependence on fossil fuels, which we must get rid of,” von der Leyen said on Friday in Brussels, less than 24 hours after the EU signed a deal supporting Norway’s “continued exploration and investments to bring oil and gas to the European market.”
Also in the European capital Friday morning, G7 host and German Chancellor Olaf Scholz said the response to “major challenges in terms of the global economy” must “ensure that we can quickly operate in a climate-neutral way.” At the same time, Scholz’s negotiators were discussing with their G7 counterparts a call to invest taxpayer money in natural gas to replace Russian imports.
Pay to play
The moral position of the G7 has not only been weakened by their energy security woes. A failure to deliver on promises to send climate finance to poorer countries has severely damaged their standing in climate talks.
There’s also a broad recognition among climate diplomats and observers that naming and shaming countries to get them to raise their climate goals has reached the end of its usefulness.
Last year, the U.S., the EU and Britain choreographed the G7 and G20 to isolate China, the world’s largest greenhouse gas emitter. That drew marginal concessions from Beijing on ending international coal finance and methane, but no new climate goals. Then the COP26 U.N. climate conference in Glasgow ended in disarray last November as China and India flexed their muscles and weakened a deal to phase out coal.
“You just have to look at the closing plenary of Glasgow to see that we need to find a different way to engage with emerging economies that actually makes them want to do more,” said a German official.
The buzzword in climate circles to describe the shift from negotiating global deals to actually cutting emissions is “implementation.” That’s changing the conversation between big emitters from “What are you doing?” to “What can we do for you?”
“At the end of the day, implementation is not something that you can negotiate. Implementation is something that needs to be wanted by the country and continuously invested in,” said the German official.
Scholz has long championed an international climate club. Membership could offer bonuses ranging from access to proprietary research or technology innovations to exemption from carbon border tariffs. The details were being discussed by G7 negotiators ahead of the summit. Several officials from G7 countries told POLITICO that, while there would be barriers to entry based on climate efforts, the intention of the club was to be open enough to convince China, India, Indonesia and others to join.
“It’s also no longer sufficient to lead by example, in target setting or broad sweeping commitments in the communiqué,” said Alex Scott with the E3G think tank. “We’re talking about changing the whole of the world’s economy, and every economy within it. So the rubber hitting the road on that is a different level of challenge.”
This has the added geopolitical benefit for Western countries of countering China’s Belt and Road overseas investment program. The U.S., EU and U.K. have all announced similar investment programs that they are seeking to coordinate at the summit. The leaders plan to officially launch a combined “Global Infrastructure Partnership,” a U.S. administration official said, though the exact details of what kinds of projects it would entail have not been made clear.
Right now, the money has not been flowing in meaningful ways. “China keeps writing checks. The U.S. keeps saying: ‘We have a checkbook,’” said Hayley Channer, a U.S.-based senior policy fellow at the Perth USAsia Centre.
As well, the amount of finance and other incentives that the G7 can muster — and therefore its effectiveness — are finite and possibly dwindling as the world slips toward a recession.
“The fear now is that with the war in Ukraine and all that’s happening in Europe that the attention and the financing and the resources to be devoted to that may be slow to come,” said Usman.
Even in the example of overseas investment, the G7’s green agenda faces a serious challenge from the realities of the present energy crisis. All of the countries at the talks have signed up to a pledge to end almost all international fossil fuel financing by the end of 2022. But Scholz and Italian Prime Minister Mario Draghi have led an EU charge to support new gas exploration in Africa. There are fears among NGOs that the leaders will water down the commitments made last year.
Despite that, political leaders have offered repeated — but not completely convincing — assurances that the world is only headed in one direction.
“There will not be a return to cheap fossil fuels,” said von der Leyen on Friday. “I think.”
Zack Colman, Matthew Choi and Hans von der Burchard contributed reporting.
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