The G20’s Renewed Attempt to Spearhead a Clean-Energy Transition

The Group of Twenty (G20), a federation of the most important industrialised and emerging countries, is a crucial forum for initiating a clean-energy transition at the global level. Its member states account for nearly 80 per cent of the world's energy demand and more than 80 per cent of global CO2 emissions. The G20 brings together key players in international energy markets and international institutions along with major energy exporters. According to the International Renewable Energy Agency (IRENA), a concerted effort on the part of G20 nations could increase the global share of renewable energy sources to 44 percent by 2030.

But a successful move away from fossil fuels remains to be seen, not only in the US, where President Trump intends to withdraw from the Paris Agreement, but also among the other G20 members. Indeed, 82% of the primary energy in G20 states is still fossil-based. Since assuming the G20 presidency, in 2019, Japan has been pushing for renewed sustainable energy efforts in the G20.

The G20 began its climate efforts in 2014, when the Australia-led group tasked its Sherpas’ Track with climate and energy policy and adopted its first Energy Efficiency Action Plan. The following year, the G20, under Turkey’s presidency, issued recommendations on the use of renewable energy. Since then, it has developed additional plans to fight global warming and promote sustainable energy.

According to IRENA, these efforts fall far short of the G20’s potential. Is this a fair assessment? The success of the G20 cannot be measured by the implementation of specific measures alone, and its action plans and goals are at any rate voluntary. But we cannot ignore the role that the G20 plays as an "agenda setter": its commitment to climate protection and a global clean-energy transition send important signals to non-G20 states, international institutions, and markets.

On the other hand, the decision by the US in 2017 to exit the Paris Agreement has significantly weakened the G20’s energy agenda and undercut nations’ joint commitment to climate protection. In 2018, with Argentina at the helm, fossil fuels once again had a prominent position in energy policy. Japan’s presidency this year has nevertheless demonstrated how the G20 can continue to provide important impetus to the global decarbonisation agenda.

So far, Japan's own commitment to the fight against climate change has been half-hearted. In terms of energy policy, the government of Prime Minister Shinzō Abe has focused primarily on nuclear and coal energy. For years, however, Japan has also been banking on hydrogen as the energy source of the future and has aimed to make hydrogen the country’s primary fuel. As the Financial Times reported, the Japanese transport sector has led the way by promoting hydrogen-based fuel cells to power internal combustion engines.

Despite Japan’s restrained climate engagement at home, its tenure as G20 chair has seen it become a full-throated advocate of climate protection and the expansion of renewable energy. “We must invite more and still more disruptive innovations before it's too late,” Prime Minister Abe said at the World Economic Forum in Davos this past January. Investment in a “green earth and a blue ocean,” he added, would boost economic growth. “
Decarbonation and profit making can happen in
tandem. We politicians must be held responsible to make it happen”.

To reaffirm the commitment of G20 members, Japan organised the first-ever G20 Ministerial Meeting on Energy Transition and Global Environment for Sustainable Growth on 15 and 16 June in Karuizawa, Japan. The closing statement of the meeting emphasised the commitment of G20 members to strengthening cooperation in the areas of energy efficiency and renewable energy, with a particular focus on energy innovations. Yet the statement also bears the hallmark of the Trump administration, which sees fossil energy as the central element of the future global energy supply. In its opening paragraph, the statement qualifies the G20’s commitment to clean energy by noting that “fossil fuels still play a major role in energy transitions” worldwide.

But the meeting also produced an important policy document, the G20 Karuizawa Innovation Action Plan on Energy Transitions and Global Environment for Sustainable Growth. It stresses the untapped potential of international exchange and cooperation for the advancement of energy technologies such as cleaner vehicles, more energy-efficient buildings, and storage.

Not surprisingly given its domestic efforts, Japan has placed a special focus on the role of hydrogen in a clean-energy future. In a report commissioned by Japan, the IEA warns that hydrogen is still produced almost exclusively with the help of fossil fuels and thus represents a significant source of CO2 emissions. In order to exploit its potential as a green energy, the report stresses, it is important that countries quickly introduce the large-scale generation of hydrogen from renewable electricity. This would allow the decarbonisation of economic systems to be extended to areas where the clean-energy transition is stagnating. In this way, Japan, a leading player in hydrogen policy in its own right, has put "power-to-X" technologies and greater cooperation with energy innovation on the global agenda for a clean-energy future.

In 2017, during the German G20 presidency, strong differences emerged with the US government regarding the decarbonisation of the electricity system. The US distanced itself from the G20 Hamburg Climate and Energy Action Plan for Growth, because, among other reasons, it did not want to abandon its domestic coal production. But the global clean-energy transition requires much more than a transformation of the electricity sector. In this regard, the advancement of G20 cooperation in areas such as sustainable transport, industries, and buildings also represents an opportunity for Germany.

In the face of American recalcitrance, Germany as well as other leading clean-energy pioneers such as France and China must now redouble their efforts to put climate protection and sustainable energy on the G20 agenda, while forging consensus among the other member states. It is important for the development of global energy and financial markets that the G20 nations openly signal that the Trump administration’s stance on climate protection and sustainable energy has isolated it from the international community. This year’s summit, which will take in Osaka on 28 and 29 June, is another important opportunity for the G20 to spearhead a global clean-energy transition.