G7 Nations to Stop Financing Coal Projects Starting This Year

At a meeting yesterday, the ministers of G7 countries responsible for the environment and fighting climate change unanimously agreed to phase out the financing of fossil fuel projects beginning this year with coal. In their joint communiqué, after a two-day meeting, they recommitted their countries to keep the limit of 1.5 Celsius (2.4 Fahrenheit) atmospheric temperature rise within reach, a limit agreed to by the signatories to the Paris COP21 Climate Agreement signed in 2015.

The communiqué states:

“There is a global imperative to pursue efforts to limit the increase in the global average temperature to 1.5 Celsius above pre-industrial levels, recognizing that the avoided climate impacts are greater at 1.5 than 2 Celsius, as stated in the IPCC’s [International Panel on Climate Change] 2018 Special Report on Global Warming of 1.5 Celsius. This will require meaningful action by all countries, in particular the major emitting economies, pursuant to continuous improvement in climate and environmental action to align with a pathway that keeps 1.5 Celsius within reach. We, G7 members, will lead by example and each commit to achieve net-zero greenhouse gas (GHG) emissions as soon as possible and by 2050 at the latest.”

The specific pledge about coal reads as follows:

“Recognizing that coal power generation is the single biggest cause of global temperature increases, we commit now to rapidly scale-up technologies and policies that further accelerate the transition away from unabated coal capacity and to an overwhelmingly decarbonized power system in the 2030s.” Additional wording acknowledged “the risk of stranded assets associated with high carbon investments.” The G7 also finally pledged to tackle fossil fuel subsidies which the International Monetary Fund in 2017 estimated to be valued by the energy companies at $5.2 trillion US, a value equal to 6.5% of the global economy. The G7 pledged to stop what it called “inefficient fossil fuel subsidies” by 2025.

The meeting of the G7 ministers was timely, following a few days after the International Energy Agency report that unequivocally called for an immediate end to all new oil, gas and coal natural resource development stating that without a full-stop the planet will be unable to meet the Paris 1.5 Celsius target.

The G7 ministers called on global financial institutions to align themselves with the goals of the Paris Climate Agreement in their use of capital, particularly within the Developing World.

The ministers collectively agreed to mobilize $100 billion US annually in climate change finance through to 2025 to help Developing World countries achieve “meaningful mitigation actions.”

Businesses and investors were urged “to join the Race to Zero” by aligning their portfolios with the goals of the Paris Climate Agreement and setting and achieving their own net-zero targets for 2050 at the latest.

The G7 talked about the potential of “carbon markets and carbon pricing” to help reduce emissions, drive innovation and breakthrough technologies to achieve the net zero goal.

In a section of the communiqué entitled “Unleashing the full potential of the Paris Agreement” the G7 ministers describe their steadfast commitment, putting in place the “Paris Rulebook” which includes a common set of metrics and enhanced transparency, as well cooperative decision making.

I doubt any of this progress could have been made just four months ago before Joe Biden became U.S. President. It appears having America back in the fight to stop anthropogenic global warming has given the G7 nations an energy boost, and not one derived from fossil fuels.