Green path to G20 development goals
There is a need for effective multilateralism and hard resources to show solidarity with the vulnerable and commit to the planet
At the G20 Leaders’ Summit, India pulled off a historic feat with the adoption of the Leaders’ Declaration on the very first day. This was a sign that India could bridge divisions and deliver a cooperative and collaborative outcome, rather than a combative stalemate, at a time when multilateralism seemed particularly fractured. The 83-paragraph Declaration, with consensus among all member countries, underscores peace, prosperity, people and the planet — and bringing it all together is an important pact.
The G20 comprises the world’s largest economies accounting for over 80% of global gross domestic product (GDP). Through the Leaders’ Declaration, however, New Delhi has given “GDP” a new meaning — a Green Development Pact. This does not choose between development and environment but seeks to align people-centric growth with planetary sustainability.
In 2021, this columnist had highlighted the need for focusing on lifestyles, on diversifying clean energy supply chains, and that calls for climate action must be matched with a deal for development for developing countries. In 2023, the New Delhi Leaders’ Declaration put these issues front and centre. Hosting the first G20 summit after the pandemic, India sought to build consensus around a green developmental pathway that can be resilient against the compounding shocks of debt and disaster while also transitioning to a cleaner economy. The pact lays the foundations to balance these.
First, it focuses on resource efficiency and sustainable consumption. The G20 unanimously adopted the High-level Principles on Lifestyles for Sustainable Development. It’s a push for sustainable lifestyles to lower our resource footprints and it sends out the signal to create circular economies at scale, from metals and minerals to plastics and packaging.
A second key component is the emphasis on an inclusive energy transition. This is crucial for bringing the energy transition closer to people (for energy access) in geographies where clean energy infrastructure is needed. The pact endorses a target to triple renewable energy capacity and notes the voluntary action plan to double the rate of improvement in energy efficiency by 2030. It announces a Global Biofuels Alliance. It seeks transparent and resilient global markets for hydrogen. And it calls for diversified and responsible supply chains for critical minerals and semiconductors.
Thirdly, the pact focuses on climate and sustainable finance. The Leaders’ Declaration finally endorses the need for trillions of dollars for the billions of people living in the Global South, in particular $5.9 trillion needed by developing countries to achieve their climate targets by 2030, as well as $4 trillion needed per year for clean energy. Recognising the importance of leveraging the role of multilateral development banks, the pact calls for blended finance and risk-sharing facilities.
Fourthly, the pact links the triple planetary crises by drawing attention not only to the climate crisis but also reducing plastic pollution and preserving biodiversity. These include the G20 Global Land Initiative to reduce land degradation, the High-Level Principles for a Sustainable and Resilient Blue/Ocean-based Economy, and the sharing of best global practices on water.
The final crucial component is building disaster-resilient infrastructure. India introduced a Disaster Risk Reduction Working Group into the G20. It will be incumbent on member countries, all of whom have faced weather extremes, to ensure robust early warning systems and include people as stakeholders in and enablers of resilient infrastructure.
As with all negotiations, not all objectives were achieved. While there is language to phase down unabated coal power, efforts to get an agreement on a phase-down of all fossil fuels could not get consensus. At the same time, G20 leaders recognised that limiting temperature rise to 1.5 degree Celsius would need emissions cuts of 43% by 2030 relative to 2019.
If these seeming contradictions have to be squared, the G20 Leaders’ Summit must be viewed as the first leg of a four-part relay. India has kicked off this race with a comprehensive Leaders’ Declaration, which includes the Green Development Pact. The next leg is the UN General Assembly and the UN SDG Summit next week when non-G20 leaders can propose their visions for doubling down on the energy transition and climate sustainability. Next, the baton will pass to the World Bank annual meetings in Marrakech in October. G20 leaders have called for the reform of the MDBs but will the World Bank’s biggest shareholders agree when it really matters? So far, it seems close to $200 billion of additional lending could be possible with the proposed reforms.
But the journey from billions to trillions will be a long one for the Global South, which needs resources to build sustainable infrastructure at lower costs. The anchor of the race will be the COP28 climate meetings in Dubai in November-December. It will be the venue for an honest conversation about the global stocktake and the state of the planet.
The ideal outcome would be a genuine financial platform to deliver large volumes of institutional capital that the G20 has called for — in a manner that reinvigorates trust in the process. The new GDP — Green Development Pact — can serve as a bridge between the Global South and the North. It is a combination of ambition and action, where each G20 member (including the African Union as the newest member) has something to take home. Now, we need effective multilateralism and hard resources to demonstrate solidarity with the vulnerable and commit to the planet.
Arunabha Ghosh is CEO, Council on Energy, Environment and Water. He serves on the Government of India’s G20 Finance Track Advisory Group and provides guidance to the Sherpa Track for India’s G20 presidency. The views expressed are personal