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Dentons US LLP

06/18/2021 | News release | Distributed by Public on 06/18/2021 04:59

What did G7 say about Net Zero?

June 18, 2021

Ahead of the recent G7 Summit at Carbis Bay, Boris Johnson said: 'Protecting our planet is the most important thing we as leaders can do for our people. There is a direct relationship between reducing emissions, restoring nature, creating jobs and ensuring long-term economic growth.'

What did the G7 leaders agree on climate policy, and what does it tell us about the prospects for progress at the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow in November?The Summit marked a return to alignment of all the G7 governments around the 'Net Zero by 2050' consensus after a period marked by the US withdrawal from the Paris Agreement. A key headline is that they have 'committed to increased 2030 targets and, where not done already, commit to submit aligned Nationally Determined Contributions (NDCs) as soon as possible ahead of COP26, which will cut our collective emissions by around half compared to 2010, or over half compared with 2005'.

Halving emissions by 2030 is an essential staging-post on the road to Net Zero

This is good news. It reflects the widely held view that halving emissions by 2030 is an essential staging-post on the way to Net Zero and, as such, is very welcome. For Canada and Japan, it represents a significant increase in the levels of ambition in the current versions of their NDCs. For those G7 members that have already upgraded their NDCs in line with this pledge, a number of questions remain to be answered around how their 2030 targets will be achieved.

Wanted: details

The latter point is acknowledged when the Summit communiqué states: 'To be credible, ambitions need to be supported by tangible actions in all sectors of our economies and societies.' It is notable that while the communiqué endorses the International Energy Agency's (IEA) recent report, Net Zero by 2050: A Roadmap for the Global Energy Sector, in a general way, it does not commit to many of the key quantitative steps that the IEA highlights as important elements within the overall pathway it maps out (even the less controversial ones).

An exception to this is the commitment to 'an overwhelmingly decarbonised power system [domestically] in the 2030s'. Elsewhere, 'an end to new direct government support for unabated thermal coal power generation by the end of 2021' is mentioned, and there is general enthusiasm for 'decarbonised mobility' (plus 'accelerating the roll out of necessary infrastructure'), as well as reference to the newly-launched G7 Industrial Decarbonisation Agenda.

Glass half-full or glass half-empty?

Depending on whether you are inclined to take an optimistic or pessimistic view, these brief allusions to the building blocks of Net Zero can either be read as important overall policy endorsements or as bland box-ticking. The same is true for the promise of 'focus on accelerating progress on electrification and batteries, hydrogen, carbon capture, usage and storage, zero emission aviation and shipping', and that fact that the G7 'recognise the need for an urgent step change in the deployment of renewable heating and cooling and reduction in energy demand'.

Mind the gap

The language of the communiqué is measured - in part, because moving towards agreement in the context of COP26 is a process of building consensus, and balancing the desire to show leadership with concerns about alienating other governments, particularly in developing economies. However, one of the IEA report's key points concerned the gap between rhetoric and reality in both government and business pronouncements about Net Zero. There may be all sorts of things going on beneath the surface, but taking the G7 Summit at face value, it has not narrowed that gap much.