G20/G7 / 100 billion / International climate finance / Pledges & Commitments

G7: Meagre results for climate finance

G7 Burning the Planet

Cliamte action by the G7 remains incompatible with the Pris Agreement and its 1.5°C temperature limit. On climate finance, the summit achieved no real progress. Photo © Mike Auerbach / Oxfam

At the G7 summit, heads of state and government also discussed financial support for poorer countries for cutting emissions and adaptating to climate change – with less-than-impressive results.

One can hardly claim that the G7 summit made any significant progress in global climate action. The G7 reaffirmed their intention, formulated in May by the G7 climate, energy and environment ministers, to transform the electricity sector to be predominantly emission-free by 2035 and to accelerate the phase-out of coal. At the same time, however, the G7 countries have failed to heed the call of the last UN Climate Change Conference COP26 in Glasgow and align their climate protection targets with the 1.5°C limit of the Paris Agreement – and did not even express the intention to do so by the end of the year (as called for by COP26).

Instead of climate finance: new money for fossil climate killers?

On climate finance, the results of the G7 summit are rather mixed. On the positive side, the G7 aims to follow the example of the partnership with South Africa and agree on new climate partnerships with India, Indonesia, Senegal and Vietnam. Properly designed and sufficiently backed with financial support, such partnerships can provide strong tailwinds for a just energy transition in these countries. So far, however, the new plans have not come with financial commitments, and due to the lack of further details, it is not yet possible to make a proper assessment.

On climate finance, however, the results are no more than a repetition or reaffirmation of old pledges or goals – such as related to the intention to the (albeit delayed) fulfilment of the $100 billion promise or the target set by COP26 to double annual support for adaptation to climate change by 2025. Even the recognition of the urgent need for support in dealing with unavoidable loss and damage is, in the chosen wording, only a tiny step. The G7 and the other industrialised countries still refuse th establishment of appropriate mechanisms to faciliate and reliably provide such support and only express their intention to the expansion of climate risk insurance approaches, which can play an important role but only cover a part of the losses and damages increasingly impacting vulnerable communities, and which are also not an option at all in many contexts people living in poverty may find themselves in.

A heavy blow has been the watering down of the declaration launched on the fringes of COP26 to end public funding of fossil energy projects abroad – in light of the energy crisis resulting from the war in Ukraine, Germany has successfully pushed the G7 to accept new public money to be invested into the expansion of gas production (money that will then be unavailable for the expansion of renewable energies). It’s deeply disappointing to see that Germany, of all countries, was the driving force here.

German government concretises (and dilutes) its climate finance pledge

On the sidelines of the summit, the German government concretised its 6-billion-pledge from last year’s G7 summit: In order to achieve the goal of providing at least six billion euros in climate finance annually by 2025, the German government now plans to only partially provide additional funds, and otherwise intends to make already previously expenditures “more climate-effective” (see here, German only). Assuming that even these previously planned expenditures should at least not run counter the Paris Agreement, this latter part is likely to mean: The budgets of other priorities in development assistance will be shifted (as in: plunderered) to make progress on the climate pledge.

How things will proceed here will become clear as soon as the details of the draft for the 2023 federal budget become known in the next few weeks. In 2022, climate finance will not grow, and so far this has also been the plan for 2023 and the following years – despite the much-acclaimed pledge from last year. A turnaround is urgently needed, with significant increases for 2023 and a strengthening of the pledge itself, so that German budgetary resources for international climate finance increase to at least eight billion euros annually by 2025.

Jan Kowalzig, Oxfam