The G20 is at a crossroads. Since its inception, the exclusive group uniting the world’s 20 major economies has had the chief objective of avoiding a new financial crisis, after the 2008 crash shook the global economy to the core leaving millions of people jobless.
But a looming crisis of a different nature could now threaten international stability just as much: climate change, a risk factor deeply intertwined with other hazards such as slow growth and rising inequality.
In the face of a global power shift brought about by the new US administration, the German government that has just taken over the G20 presidency from China now operates in a social and financial landscape riddled with new risks. How they will be handled could put the planet on two very different, potentially irreversible paths.
New challenges for the G20
The combined economies of the G20 are responsible for 80 per cent of energy related pollution and represent 75 per cent of the global deployment potential of renewables by 2030. They also account for 85 per cent of global gross domestic product.
Despite having the resources to address the crisis boldly, until very recently “climate change was a taboo topic for the G20” says Nancy Alexander, head of the Economic Governance and G20 program at the Heinrich-Böll-Stiftung foundation. “In 2014, the Australian premier Tony Abbott tried to push it off the agenda.” That was when Barack Obama and Xi Jinping revealed a bilateral deal they had been negotiating in secret for months. “They burst into the summit and insisted that it would be mentioned in the declaration,” Alexander recalls.
Despite some steps forward taken by individual members, the G20 as a group has not been able to to deal with its historical responsibility for global warming.
For example, while promoting a transformation in the energy sector, the forum still fails to aggressively push for the removal of fossil fuel subsidies. Together, the G20 countries are estimated to be spending US $444 billion every year subsidising fossil fuels through various financial channels. This holds back the development of renewables and paves the way for the lock-in of carbon infrastructure - a move that would prove disastrous for the climate.
However, building on the progress made in China last year, the German government has included climate change among its top priorities for this year’s summit. This will mean working towards a development strategy built around mitigation, adaptation and risk management.
The complex nexus of global risks
The recent Global Risk Report 2017, released by the World Economic Forum ahead of its annual meeting in Davos, identifies extreme weather events and major natural disasters among the climate-related threats most likely to shape the coming 10 years.
The study, an opinion survey which interrogates 750 experts within a variety of sectors, also highlights involuntary mass migration - resulting from conflict or environmental changes - as one of the most likely disasters.
Aengus Collins, a risk analyst with the World Economic Forum, mentions mass migration as one example of how a combination of social, environmental and economic factors can drive large scale crises. “One of the things that is becoming increasingly clear is the extent of spillover risk” he says, mentioning automation and climate change as factors that magnify economic and social issues. “Over the last 10 years economic risks have faded, while environmental risks have risen at the top of the agenda,” Collins says.
Preparing for unavoidable damage
The fact that opinion leaders all over the world are increasingly concerned about climate-related crises reflects the growing awareness that some of them are by now unavoidable. We are bound to some degree of global warming, which will make extreme events more likely and severe.
Observers hope that the G20 will pledge its support to robust insurance programs, which could assist with post disaster recovery and also fulfil the commitment to reduce inequality globally.
Realignment of power
But this year the US delegation will be spearheaded by President Donald Trump, whose views and campaign pledges could threaten climate change action and potentially overall global stability.
“We are seeing a historical shift at this point in time, a realignment of global power the likes of which we have not seen since World War II” says Alexander. “New alliances are being created, other are being destroyed.”
For example, with the trade agreement Trans-Pacific Partnership (TPP) coming to a standstill, “China [which was excluded from the deal] has now much greater leeway to set the rules of engagement in Asia and globally,” says Alexander. China is fast emerging as a new climate champion - aggressively promoting renewables and championing the Paris Agreement.
At the other end of the spectrum, Donald Trump has questioned the very existence of climate change as well as “making it clear that he intends to sweep away many of the financial regulations that have been put in place to prevent a new financial crisis,” she says.
Taking responsibility for the vulnerable
In Germany, delegates will discuss how to build a global economy that is stable, fit for the future and takes responsibility for the poorest, particularly in Africa.
Energy scarcity - rife in Africa and in the poorest parts of Asia - is one problem that could lead to locking in more carbon, or laying the foundation of a cleaner infrastructure. “We regard [the need for a global] energy transition as an opportunity, one of the ways to create financial security and basic access to energy,” says Sonja Thielges, a researcher at the Institute for Advanced Sustainability Studies of Potsdam, Germany.
“The challenge now is to enable energy access [in Africa] while staying away from fossil fuels” says Thielges. “And creating energy access to renewables is a lot easier than creating access to fossil fuels,” so the missing link is a more attractive policy and financial environment, that could be enabled by multilateral development banks among others.
But political instability and red tape still lock many countries out of climate finance flows. Despite the various knowledge-sharing platforms available, the latest of which was introduced at the UN climate talks in Marrakech, many lament a lack of financial and technical support from their richer counterparts. As the majority of African countries have submitted pledges tied to effective international aid, the Paris Agreement is at stake.
The G20 is coming to grips with the need to take climate change seriously. In order to keep everyone - including the US - on board, the German presidency will need to make a business case for resilience building and mitigation, both in the rich and the poor world. Taking a strong stance against carbon intensive infrastructure may not be business as usual for the G20, but as new temperature highs are recorded almost every day, acting fast is in everyone’s interest.
Lou Del Bello is a journalist specialised in climate science and policy. @loudelbello
Disclaimer: The views expressed in this article are personal.
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