At the G20 Summit in Rio de Janeiro, leaders of the world’s 20 largest economies, responsible for 85% of global emissions, made progress in scaling up climate finance but stopped short of committing to phasing out fossil fuels. The joint statement released on Monday reaffirmed global climate goals but left significant gaps in addressing the pressing need to transition away from fossil energy sources.
Meanwhile, in Baku, Azerbaijan, delegates from over 200 countries are engaged in critical negotiations at COP29 to finalize a new climate finance target. The stark contrast between the G20’s cautious approach and the urgency of discussions in Baku underscores the challenges in global climate diplomacy.
G20’s Climate Commitments
The G20 leaders’ declaration reaffirmed their commitment to the 2015 Paris Agreement and endorsed the outcomes of the 2023 Global Stocktake. The statement also emphasized scaling up renewable energy, enhancing energy efficiency, and centering climate action on principles of justice and equity.
However, the absence of a firm commitment to phase out fossil fuels drew criticism from environmental advocates.
“It’s unfortunate that the G20 failed to reiterate the commitment to shift away from fossil fuels, which all countries agreed to at COP28 in Dubai,” said Ani Dasgupta, President and CEO of the World Resources Institute (WRI). “However, it reaffirmed that just, equitable climate action must remain at the centre of the global agenda, and negotiators in Baku should rally behind a strong new climate finance goal.”
Focus on Climate Finance at COP29
The G20 Summit coincided with ongoing negotiations at COP29 in Baku, where countries are working to set the New Collective Quantified Goal (NCQG), a climate finance target to replace the $100 billion annual commitment made in 2009.
While the G20 did not announce specific figures for this new goal, it acknowledged the need to mobilize resources on a much larger scale, shifting from billions to trillions.
“Without decisive progress on finance at COP29, we are steering towards a catastrophic temperature scenario, where the most vulnerable will bear the gravest consequences,” warned climate activist Harjeet Singh from the Fossil Fuel Non-Proliferation Treaty Initiative.
Wealth Tax and Financial Reforms: A Step Forward
One of the more groundbreaking elements of the G20 statement was its endorsement of a wealth tax to generate climate finance. The declaration supported innovative mechanisms like progressive taxation and cooperation to ensure effective taxation of ultra-high-net-worth individuals.
A 2% wealth tax on the richest could mobilize as much as $250 billion annually, a significant contribution to climate mitigation and adaptation efforts in developing nations.
“The G20 has continued its push for international cooperation on global issues and strengthening of the multilateral system. Hopefully, this will positively nudge the negotiations at COP29,” said Manjeev Puri, Distinguished Fellow at The Energy and Resources Institute (TERI).
Additionally, the G20 endorsed reforms to global financial institutions and debt restructuring to make funds more accessible to climate-vulnerable nations. These steps, though incremental, were praised for addressing systemic barriers to climate finance.
Multilateralism in the Spotlight
The G20’s reaffirmation of multilateralism comes at a crucial moment, particularly against the backdrop of political disruptions. Vaibhav Chaturvedi, Senior Fellow at the Council for Energy, Environment & Water (CEEW), highlighted the significance of this commitment amid the challenges posed by Argentina’s withdrawal from COP29 negotiations and ongoing uncertainties in the U.S. regarding international climate agreements.
“In the background of Trump threatening to pull out of the Paris Agreement and Argentina pulling out of the COP29 negotiations, the G20 has sent a clear sign and has reiterated that the process of multilateralism is critical,” Chaturvedi noted.
