Climate put on the backburner at G7 finance meeting

May 29, 2024|Written by |G7

A meeting of G7 finance ministers made little progress on climate issues, as the war in Ukraine and AI took centre stage, with climate advocates expressing their disappointment in the outcome.

In its final communiqué following the three-day event in Stresa, Italy, ministers reiterated their commitment to net zero and put forward policy options to support a just transition. However, they failed to make promises on much-needed funding to support the loss and damage fund and other climate financing needs.

While climate advocates welcomed the progress on recognising the need for a just transition and addressing the debt crisis in the global south, many said the G7 did not make enough commitments ahead of Cop29 in Baku, in stark contrast to the G7 climate, energy and environment communiqué in April.

“Without G7 leaders unlocking new commitments to increase and mobilise investments in public goods at scale, we risk an ever more fragmented, unsafe and distrustful world,” said Luca Bergamaschi, co-founding director at Italian climate thinktank ECCO.

Rebecca Thissen, global lead at the Climate Action Network, said the G7 was “shirking responsibility and kicking the can down the road” and that the communiqué was just “empty rhetoric”.

Instead, the G7 focused its efforts on already-stated commitments and guidelines, pushing to strengthen multilateral development banks in addressing global challenges and support low-income countries in pursuing their sustainable development goals.

However, they did not acknowledge the need for debt relief and restructuring debt, and did not mention special drawing rights, a tool advocates have said would help indebted countries get liquidity to address climate needs.

The G7 said it was ready to address debt challenges for low- and middle-income countries, including supporting the G20’s efforts to improve the common framework on debt treatments.

The group adopted the Finance Track Menu of Policy Options for a Just Transition, which provides non-binding options on mitigation strategies. These include the impact of climate policies and green investment on growth and innovation, exploring carbon pricing, and the distributional effects of climate policies, as well as ways to foster climate action acceptance and international cooperation.

The G7 also welcomed the International Sustainability Standards Board (ISSB) standards on reporting climate-related disclosures, as it had done in previous years, and reiterated the need for reliable data and science-based transition plans. G7 central banks plan to continue increasing their understanding of the implications of climate change, including on inflation and possible spillover effects.

The communiqué also iterated the need to narrow the insurance protection gap, and that it would require collaboration between governments, regulators, insurance supervisors, insurers and re-insurers.

This page was last updated May 30, 2024

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