Climate20+ Policy

The Scotia Group has developed a Climate20+ Policy which has been sent to the Italian G20 Presidency addressing G20 leadership to support the success of COP26.

Climate20+ Policy

Pathways to Success at COP26: 

An Unprecedented Challenge, requiring an Urgent G20 Climate Diplomatic Agenda

We are deeply concerned by the rapidly accelerating pace and impact of global climate change which, if not corrected promptly, will lead to an unprecedented, collective failure that threatens the future of our planet. The current disruptions in supply chains and energy markets are an early sign of how difficult it will be to bring about a global energy transition unless the G20 provides clear, strong and decisive leadership in Rome ahead of COP26 in Glasgow. Following the Statement of Urgency (September 2021), in which the Scotia Group declared an international diplomatic emergency in the area of climate action, the Scotia Group now calls on governments of the G20/OECD states to collaborate and to create pathways, together with the private sector and other willing states, that will accelerate global investments in decarbonization and bring about the transition to a Net-Zero world.

We call on the G20 to lead a C20 emergency policy of global governance without world government to ensure alignment of the troika — national government, intergovernmental mechanisms and mandated agencies, funds and programmes’ (AFPs) on commitments that are vital to the planet and humanity. Therefore, and in order to achieve any global progress, the immediate first step is to get out of the institutional and diplomatic chaos around the climate emergency.

C20: Leadership by Governments and International Organizations

Rather than creating new institutions, the international community must focus on coordinating climate action and mandates and finding functional pathways within existing structures and institutions for climate action and execution in every community, everywhere. We urge ministers and parliamentarians of G20(+)/OECD nations to consider three top-level priorities: (i) debt restructuring arrangements that factor in the devastating impact of the COVID-19 pandemic; (ii) the urgent commitment of resources to international climate financing, beginning with the collective pledge of $ 100 billion+, and the implementation of more manageable financing processes; and (iii) the implementation of a carbon price floor.

Additional measures in the response to the climate crisis should include climate-focused tax policies; the stimulation of urgent, public and private investments in research and development, as were mobilized during the massive, unprecedented COVID-19 response, renewable energy infrastructure to support circular carbon economies, and other uses of economic incentives.

Strong climate commitments and strategies, together with debt relief strategies, will help LDCs to reach sustainable, climate-friendly outcomes without additional, unsustainable fiscal stress. The extension beyond December 2021 and expansion of the Debt Service Suspension Initiative (DSSI) to also cover mid-income countries that commit to and continue decarbonization efforts towards a 45% reduction of GHGs by 2030 would be a powerful incentive and a pre-requisite for sustained progress in decarbonization.

To successfully reach Net-Zero 2050 around the world, we need to first succeed in meeting the Sustainable Development Goals (SGDs) 2030 and related commitments. This will require substantial leadership on the part of national governments, including the G20, and international organizations.

The G20 group of countries, the world’s largest and most important nations, must show leadership at this critical turning point through a number of complementary pathways, which include: (i) phasing out coal; (ii) developing and implementing a carbon pricing system with an agreed-upon price floor and local implementation parameters, including social safeguards to protect vulnerable communities and economies; (iii) a just, transparent and effective emissions trading system; and (iv) equitable access to technology and adaptation solutions. The price of carbon should include progressive increases to lock in an International Carbon Price Floor (ICPF) of an average value of USD 75/ton of CO2 by 2030 (IMF proposal) or, in any event, a price per ton that is not lower than the technology cost to absorb or capture it.

International financial institutions, such as the IMF, World Bank and Regional Development Banks (AIIB, IADB, EBRD and others) should ensure that international financing made available to developing countries emphasizes adaptation over mitigation. Adaptation projects that provide mitigation co-benefits and infrastructure projects that reduce vulnerability to extreme climate events and sea level rise should be prioritized. With support from UNCTAD, opportunities to promote supportive WTO trade rules and provisions for developing countries negatively affected by the adverse impacts of climate change should be explored through WTO negotiations. A range of supportive financial instruments and techniques should be deployed, including ‘green debt’ swaps and debt restructuring techniques that link debt restructuring to adaptation, decarbonization and marine conservation, to accelerate climate action by developing countries whose fiscal positions are substantially weaker than those of the G20/OECD member states.

Countries should examine the ways in which international trade rules and actions can contribute to supporting developing countries adversely impacted by climate change, and to promoting carbon neutral production of goods and services. The WTO should accept the legitimacy of actions taken by members to comply with multilateral environmental agreements. Discussions on Article 6 of the Paris Agreement will require the support and commitment of international organizations, conceptually and operationally, to ensure that Internationally Transferred Mitigation Outcomes (IMTOs) involving developing countries achieve real, equitable and progressive climate benefits, while advancing adaption objectives.

Decarbonization Policy and Industry Leadership: Hydrocarbon energy, Steel, Cement, Food

A just and equitable global energy transition is needed, supported by a diplomatic process that includes international oil companies, state-owned oil companies, OPEC governments and other stakeholders. Industry and agricultural sectors that are significant net contributors to carbon emissions (e.g. hydrocarbon energy, steel, cement and food) must become part of the solution, aligning their production with decarbonization policies.

Fuel subsidies that do not drive down carbon output should be eliminated. Public sector grants and programmes in the energy sector should be aimed at creating new technologies (R&D), innovation and pathways to a more progressive transition and sustainable economic opportunity.

Food production accounts for up to one-third of greenhouse gas emissions, and there is a pressing need for this sector to contribute to decarbonization and NetZero 2050 in a systematic, coordinated way. Events like the UN Food Systems Summit can provide important platforms for collective decisions that can accelerate sectoral decarbonization while protecting human rights and the ecosystem. Similarly, investments to catalyse innovation and transformations in the steel and cement industries will be critical in reducing sectoral GHG emissions and moving onto the path toward Net-Zero.

Communities and Citizens: Climate Action, Accountability and Rule of Law.

Much practical climate action takes place in cities, regions, and sub-national states. Scaling these successes is critical to meeting climate goals in time. For example, with increasing global urbanization, climate-focused urban planning, building codes, and investments in green public transport can be part of a coordinated global action that supports inter-generational climate equity and justice.

The G20 should therefore ensure that international climate financing opportunities and the mobilization of investments, including financial platforms and mechanisms, reach the level of government at which policy is being implemented and climate action is taken. To complement government action, peer-to-peer networks and learning between cities, states, and regions can build the trust needed to operationalize climate solutions and make successful transitions.

Citizens, whether individually or through advocacy groups and other civil society organizations, will play a growing role in the efforts to achieve the goals set out in the SDGs2030 and the NetZero2050 commitment. Their efforts and voices on climate mitigation and adaptation must be supported through effective accountability and effective structures, including national judicial systems, parliaments and sub-national legislatures and councils.

Urgent Considerations for the G20

  • The science remains abundantly clear. We must urgently transition to more effective ways of taking action to mitigate and adapt to climate change. New accountability and oversight structures must be developed and, anchored in multilateral frameworks and commitments, to ensure that the world will move along a collective path to NetZero 2050.

  • For the G20, this meeting must become the moment to pivot from negotiation into implementation mode, with the SDGs2030 putting us on a trajectory of “T-9,” during which we must address the climate emergency and relevant supporting processes.

  • We can slow down the effects of climate change, mitigate their impact and adapt, if we act urgently and systematically, integrating decarbonization and accelerating pathways to NetZero into both public and private sector decision-making.

  • This includes ambitious national commitments to reduce CO2 emissions beyond those that may be made at COP26, supported by (i) coordinated, multilateral leadership, (ii) effective climate financing through carbon pricing and emissions trading systems, (iii) progressively increasing levels of investment in mitigation and adaption, R&D and renewable energy infrastructure, and (iv) an effective balance between incentives and accountability structures, including national courts accessible to citizens and corporations, and legislatures.

  • On the way to net-zero, solutions must be consistent. Some affordable solutions that can lead to a 45% reduction in emissions by 2030 may significantly derail the 2050 net-zero goal. How we get to 2030 is therefore critically important if we are to reach net-zero by 2050. Solutions must be technology-neutral, as innovation can make other sources of renewable energy as affordable as solar, wind and hydropower.

  • The climate crisis does not exist in isolation from the COVID-19 pandemic and the world’s existing and emerging conflict zones; there is a high risk that political attention will be fragmented and directed elsewhere. Sustainable, affordable energy sources will be important to nations emerging from conflict or natural disaster. Strong, multilateral commitments from partner states involved in reconstruction and development work will be essential to ensure the development of energy systems and grids that can contribute effectively to decarbonization, including solar-, wind- and hydrogen-based systems. At a minimum, governments must be encouraged to develop and implement ‘green’ pandemic recovery plans.

  • The G20 should embrace the goals of not only making it more ‘expensive to pollute,’ but progressively ‘cheaper to be green’, particularly for developing economies, as the price of renewable energy technologies continues to fall.

  • In this respect, G20 leadership will remain critical, and diplomatic efforts must be strengthened to agree upon climate finance structures that can drive decarbonization through new, ambitious levels of investment, supported by carbon pricing frameworks and/or emissions trading systems, sustained financial assistance to LDCs and pathways toward a circular carbon economy.

  • G20 members should press multilateral institutions, like the IMF, to take on transformational roles in accelerating the pace of decarbonization toward NetZero 2050, and new multilateral arrangements, such as an Advance Market Commitment (AMC) equivalent for decarbonization investments, could provide important incentives to prioritize energy transitions in less-developed countries.

  • The involvement of the G20 and climate-allied parliaments will be critical, with respect to making national, legislative commitments to reach NetZero 2050, and to secure ongoing public engagement, accountability and monitoring along the way. Existing institutions and organizations, like UN Climate Change/FCCC and the Inter-Parliamentary Union (IPU), can form linkages and partnerships to accelerate climate action and oversight, similar to ongoing inter-organizational cooperation in such areas as human rights protection through the Universal Periodic Review (UPR).

  • The global climate emergency demands bold, focused, coordinated multilateral action. After 25 years of climate negotiations, COP26 is our collective opportunity to move forward, together. Our shared future on the planet demands nothing less.