G7 leaders are set to call for the richer developing countries such as China and Saudi Arabia to pay up for climate change, after UN climate negotiations over two weeks in Bonn ended with scant progress on how to deal with the consequences of global warming.
The UN discussions in Bonn, attended by hundreds of national delegates, were marked by divisions and entrenched positions over funding to help poorer nations deal with the effects of climate change.
The pressure to take climate action now falls on the G7 leaders who are meeting in Italy, after the failure of the UN talks which marked the halfway point to the next UN COP29 climate summit in Baku.
A G7 draft communique, seen by the Financial Times, indicates the world’s largest economies will agree they need to provide financing for poorer nations, while also calling on other states that are classed as developing but are more advanced economically to also pay up.
“We emphasise that the G7 countries intend to be leading contributors to a fit-for-purpose [climate finance] goal, underlining the importance of including those countries that are capable of contributing in any international public finance mobilisation,” the draft says.
The finance target that the UN is aiming to agree this year, known as the “new collective quantified goal”, is to replace the $100bn annual goal set more than a decade ago. This was finally reached two years late in 2022, according to the OECD, after including reclassified loans.
The G7 said the new goal was “a unique opportunity to strengthen the international climate finance landscape in this critical decade to keep 1.5 within reach”, in reference to the ideal goal of the Paris agreement to limit the long-term global temperature rise. The world has already warmed by at least 1.1C in the industrial era.
The discussions in Bonn were fraught as distressed developing countries maintained that the developed world, which historically caused the greatest emissions, should be held financially responsible for the damages from climate change.
Richer, western countries have increasingly countered that the wealthier developing nations, including China, Saudi Arabia, the United Arab Emirates, India and Brazil, should also contribute towards a global fund to address climate change.
In April, German Chancellor Olaf Scholz said many emerging economies had become major emitters with increasing economic clout. Countries “that have made a significant contribution to emissions over the past 30 years must also contribute to public finances” if they are in an economic position to do so, he said.
During the talks in Bonn, Saudi Arabia, on behalf of the Arab group, countered that the developed countries led by the US and EU needed to provide $441bn annually in climate financing for developing countries, which could then be leveraged to raise more than £1tn, and argued new taxes could help provide the funding.
“Military emissions represent 5 per cent of historical emissions and one, for example, potential idea is to have a tax on defence companies in developed countries,” a Saudi negotiator said during the talks. “We also realise a financial transaction tax could generate a lot of revenues as well.”
Countries also clashed over the pledge for the world to transition away from fossil fuels — a key aspect of the agreement at COP28 in Dubai last year — with one observer saying that negotiators had struggled to even agree on which track of talks to discuss it under.
UN climate change chief Simon Stiell said the talks had taken “modest steps forward” but “too many issues were left unresolved” ahead of Baku.
“Business as usual is a recipe for failure, on climate finance, and on so many other fronts, in humanity’s climate fight,” Stiell told delegates at the closing plenary session.
A low bar for the tone of negotiations was set in Bonn last year, when the UN’s Stiell was forced to issue a stark warning about the harassment and bullying of negotiators. One negotiator from a large western country said this year there were “much better dynamics”.
On the subject of rules to govern the trade in carbon credits, designed to incentivise countries to reduce their emissions, some small forward steps were taken.
Negotiators agreed on draft text that ruled out the admission of credits based on so-called “avoidance” projects into the international oversight system for the time being. These projects claim to avoid pollution rather than cutting it outright, for example by protecting an area of land from planned deforestation, and have faced criticism for a lack of credibility.
On the subject of agriculture, Action Aid International observer Teresa Anderson said the outcome was “surprisingly sensible” with an agreement to move ahead with workshops to discuss sustainable approaches to agriculture, and the finance flows to implement them.
“Thankfully the talks also did some decent damage control, rejecting big agribusiness’s greenwashing efforts to get name-checked as climate solutions,” Anderson said.
Alden Meyer, senior associate at climate-focused think-tank E3G, said the Bonn discussions underscored how challenging it would be to meet the agreement by countries at COP28 on the need to cut global emissions by 43 per cent by 2030.
The G7 text also confirms plans to phase out coal where emissions are not captured by 2035, as well as expand electricity storage six-fold by 2030.
The draft also says countries will make “intensive efforts to reduce demand for and use of fossil fuels”, without a timeline, as well as eliminating inefficient fossil fuel subsidies by 2025.
The G7 will launch an energy for Growth in Africa initiative, alongside Côte d’Ivoire, Ethiopia, Kenya, Mozambique, Nigeria, Republic of Congo and South Africa, aimed at driving clean investments across countries, the communique says.
Additional reporting by Kenza Bryan in London
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