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G7 climate commitments fall short of corporate expectations

"This is a missed opportunity even at a time of uncertain politics.”
Olivia Peluso
Oil drilling of India's co
Photo by Palak Pitroda on Unsplash

Leaders of the Group of Seven (G7) developed nations committed to accelerating their transition away from fossil fuels during this decade at their Bonn summit, but climate-minded businesses were left “frustrated” by this outcome.

In a statement issued at the conclusion of their summit in Bonn, Germany, on Monday, leaders of the G7 said: “We will transition away from fossil fuels in energy systems in a just, orderly, and equitable manner, accelerating actions in this critical decade, to achieve net-zero by 2050 in keeping with the best available science.” The document also includes a pledge to phase out “existing unabated coal power generation in our energy systems during the first half of the 2030s.”

However, corporate climate group We Mean Business Coalition expressed disappointment at the group’s decision not to raise ambition from what had been agreed at previous meetings, including COP28.

Andrew Prag, Managing Director of Policy said: “This is a frustrating outcome. Faced with electoral uncertainty in many G7 countries, leaders chose to stick to lines reached by their energy and finance ministers earlier this year. But the fact is, decisive leadership on climate action and transitioning away from fossil fuels is a route to making economies more energy secure, more competitive and creating new sources of growth and jobs. This is a missed opportunity even at a time of uncertain politics.”

G7 countries also committed to reducing methane emissions from fossil fuels, including from oil and gas operations, by 75% by 2030. However, the statement confirmed the possibility of public investments in natural gas to accelerate the phase-out of their  “dependency on Russian energy.” 

This was a particularly sore point for the We Mean Business Coalition, which believes that allowing investment in LNG “further muddied” the message sent to oil and gas companies. 

Businesses and activists call for fossil fuel phase-down

A report last year found that public financing for fossil fuels – which reached a record US$1.4 trillion in G20 nations in 2022 – is heading in the completely wrong direction needed to meet climate goals. Businesses from all sectors are calling for a phase-down and the setting of science-based targets by fossil fuel companies. 

A majority of fossil fuel firms created more emissions in the seven years after the signing of the Paris Agreement than in the seven years before, and many have backtracked on their climate ambitions in recent months and years.

Some 80% of the 251 gigatonnes of CO2e emitted between 2016 and 2022 can be traced to just 57 corporate and state-producing entities, led by China’s coal industry, Saudi Aramco, Gazprom, and the National Iranian Oil Company. Of these, some 21.6% of total fossil fuel and cement emissions were traced back to investor-owned companies including ExxonMobil, Shell, BP, Chevron and TotalEnergies.

Climate activists were also critical of the summit, saying it had failed to produce concrete commitments and mostly echoed pledges that had already been agreed upon at previous lower-level meetings.

350.org U.S. campaigns manager Candace Fortin lamented that “yet another meeting ends without real commitments to revert the situation rich countries like the U.S. put us in.”

“As COP29 approaches and the world deals with worsening climate impacts, we can't afford to waste more time,” Fortin said, echoing frustration towards empty initiatives in other diplomatic coalitions.

Leaders from the U.S., Canada, Japan, Germany, France, Britain and Italy said they would submit “more ambitious” national climate plans ahead of the COP29 United Nations climate conference, which is scheduled to take place in Baku, the capital of Azerbaijan – a major fossil fuel-producing nation – in November. The conference is set to be chaired by a former oil executive. Last year’s conference was also led by an oil tycoon and saw record levels of oil and gas representation.

Some say that election cycles in several key nations have made policymakers wary of implementing ambitious climate plans. 

Pointing fingers for funding

During the summit, countries also clashed over funding targets to help poorer nations deal with global warming. Developing countries maintained that the developed world, which has historically caused the greatest emissions, should be held financially responsible for climate damages. Some Western countries countered that wealthier developing nations, including China, Saudi Arabia, India, the United Arab Emirates, and Brazil, should also contribute towards a global fund to address climate change.

Saudi Arabia, on behalf of the Arab group, argued that developed countries led by the EU and U.S. needed to provide US$441 billion in climate financing annually for developing countries. They also suggested leveraging taxation of high-emission industries, such as defense, in developed nations.

“The sheer number of unresolved issues currently sets us up for a fraught two weeks in Baku. We urge countries to use every opportunity in the months ahead of COP29 to lay the ground for an ambitious yet realistic new climate finance goal that responds to the needs of developing countries,” said Gaia Larsen, Director of Climate Finance Access at the World Resources Institute.