No issue dominated the political agenda and the newspapers in the lead-up to this week’s Group of Eight (G8) Summit more than climate change. Backed up by the world scientific and economic community in the conclusions of the Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report, and buttressed by unprecedented levels of public support, Germany’s Chancellor Angela Merkel has placed climate and energy security at the heart of both the 2007 German presidencies: the G8 and the European Union.
This attention is very timely: we now know that tackling the growing challenges of energy supply risks and climate change will require a concerted shift in energy infrastructure towards secure, clean and diverse energy-service provision. This will require new ways of integrating energy and climate-change policies, to ensure consistent and clear investment signals to the private sector and to direct public investment policy to deliver well-defined public benefits.
The implications of the G8 response to the energy and climate-security debate will be far-reaching. A world characterised by increasingly aggressive competition for energy resources will be less and less able to cooperate and make the investment shifts needed to preserve climate stability. Rather than concentrating on seeking new supplies of energy, governments should be working together to reduce aggregate demand and diversify their energy supply, focusing heavily on the scaling up of renewable energies and meeting the energy needs of the poor.
However, there has been an artificial separation of energy security, the impact of high oil and gas prices on all countries (especially developing economies), domestic natural resource constraints and climate volatility. This obscures the issues’ strong interdependencies and diminishes the opportunity to develop coherent, integrated strategies.
It would have made sense for the G8, due to its members’ economic and political power, to take this opportunity to step into the debate and send a clear political signal to the business and policy world that investment needs to shift away from the conventional fossil fuels of yesterday, and towards the highly-efficient, low-carbon energy system of tomorrow.
The German G8 Agenda did try to do this, by providing a “roadmap” for a way forward that proposes efficiency targets on a national level and in key sectors required for transformation, such as housing, transport and power, as well as ensuring that sustainable biofuels flow into transportation systems. Such a smart energy strategy underpins the climate package of the German G8 Presidency, which proposed the launch of the next round of international negotiations under the UN Framework Convention on Climate Change and the Kyoto Protocol in December 2007, and puts forward a long-term goal to guide those negotiations. This goal is informed by the findings of the IPCC and should provide a benchmark for future energy investment.
Climate science confirms that a two degree Celsius limit for climate change should be the guiding post for policy makers in order to reduce the risk of irreversible and catastrophic damage, especially in the poorest countries. This science also provides increasingly robust guidance on the different risks that should be assessed in an integrated manner. Risk levels will of course vary according to the resilience of the society and ecosystem, but countries and regions facing large challenges to alleviate poverty are at a much greater risk from the impacts that are associated with a two degrees rise. As these countries are not represented at the G8, it was vital that the G8 countries send a clear signal that all final decisions will be made in the UN, where every country can have a say about its future.
Adopting targets and timetables is essential to shifting the investment towards the low-carbon future that is consistent with staying below a two degree rise. The International Energy Agency estimates that US$20 trillion will be invested in energy infrastructure up to 2030. This offers a massive opportunity to steer funds into a new sustainable and efficient energy system. However, in order to ensure that shift, long, loud and legal signals are needed from the highest level of government. The European Union adopted this approach at its Spring Council meeting, the first major Summit of the dual German presidencies.
In the end, they agreed that European greenhouse gas emissions should be reduced at least 20% below 1990 levels by 2020, no matter what actions other countries decided upon, and that the EU was prepared to reduce emissions by 30% below 1990 levels by 2020 if other countries were to undertake serious actions, or in the case of industrialised countries, mandatory deep emissions reductions. To ensure that the target will be met, heads of state agreed to: increase efficiency by 20% by 2020; diversify energy supply so that 20% of primary energy generated is sourced from renewables by 2020; fit all new power plants in Europe with carbon capture and storage (CCS) by 2020, if possible. To improve the likelihood of that, 12 CCS demonstration projects were agreed upon.
By agreeing this energy and climate package on the EU level, the stage was set for Chancellor Merkel, and her European colleagues, to show leadership and bring this approach into the G8. The G8 agenda was formulated to respond to the dual challenges of energy and climate security. By prioritising energy efficiency, it also attempted to speak to the priorities of the so-called “+5 countries”: China, India, Brazil, South Africa and Mexico. The German Presidency has more formally engaged the +5 than any other country before it, highlighting the shared dilemma each country faces due to the interdependent, international nature of climate change.
This agenda is quite different than that of North America. Both the Bush Administration and Canada’s Stephen Harper have rejected the German proposals for a deep cut in emissions to avoid the two degree temperature rise. In the lead-up to the Summit, it seemed that both were also questioning whether the UN should be the main forum where an agreement should occur. At the heart of this position is a fundamental opposition to binding targets and timetables. With the Bush Administration focus on voluntary measures and long-term technology and the Harper government’s recent statement that they will no longer attempt to meet Kyoto targets, both these countries are working to steer the debate back into the past. To be precise, the year is 1991 – before the Rio Earth Summit – when similar governments were proposing “pledge and review” schemes. Many governments, including some of the emerging economies such as China, have understood the fundamental failures of the Rio agreements to address climate change. And Countries such as Brazil and South Africa understand that they cannot meet their own development goals if they continue with business-as-usual development. Much more ambitious action is required.
Moving to an understanding amongst these countries, of the shared dilemma they face and the demand for a common, ambitious response, is a perfect task for the G8+5, but one that they only partially responded to. The Summit conclusions clearly decided that the future post-2012 climate regime should be negotiated under the UN and finalised by 2009, which is a strong step forward and much more than many expected. The G8 countries must now work together to ensure that this is the outcome of the December Bali Summit. The conclusions, however, were much weaker on substance. In the end, no targets were included either for emissions reductions or efficiency improvements. While there was a recognition that at least halving global emissions by 2050 should be seriously considered moving forward, there was no agreement. The pressure must continue to mount.
Jennifer Morgan is the Climate and Energy Security Director for E3G (Third Generation Environmentalism)