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Asia must seize energy opportunity

Wind turbines at the ReGen Powertech Pvt farm in Madhya Pradesh, India. The G20, under India’s leadership, should strive to achieve concrete results on climate change.bloomberg

A year ago, after US President Joe Biden won the election, multilateralism was once again at the heart of global climate action. G20 leaders agreed to a more ambitious short-term climate target to reach net zero emissions by mid-century, to end inefficient fossil fuel subsidies and to phase out coal more quickly. We pledged to cooperate in the deployment of clean energy.

China’s and India’s willingness to tackle fossil fuels reflects a growing awareness of the macroeconomic risks of resisting the transition to clean energy.

These results were crucial to enable a series of new initiatives dedicated to ‘staying at 1.5’ at the United Nations Climate Change Conference (COP26) held in Glasgow last year. 1.5C compared to the pre-industrial average.

They also helped lay the groundwork for the historic Glasgow Climate Accord, which commits all nations to phase out coal use, even if India and China manage to block calls to phase out coal. Did.

Unfortunately, the stage at last week’s G20 summit in Bali couldn’t have been better. Geopolitical and economic conditions are far more unfavorable, largely due to Russia’s terrifying war of aggression against Ukraine, which has resulted in G7 nations withdrawing promises to end investments in fossil fuels. . Today’s escalation in US-China tensions will be alleviated somewhat by a meeting between Mr. Biden and President Xi Jinping in Bali. However, it will be difficult to produce strong results.

Given that the G20 countries account for about 80% of global greenhouse gas emissions, the summit will be the final outcome of this year’s UN climate conference (COP27), which ends in Egypt after the G20 concludes in Indonesia. It sets the direction. The parliamentary proceedings in Sharm el-Sheikh are already dominated by the world’s most vulnerable countries demanding climate justice and demanding payments to support the transition and livelihoods from large emitters.

This is why fighting climate change could be the moment of unity the G20 needs. Asian members of the G20 are playing an important role in that.

Rather than backtracking, Asian countries have deepened their resolve to tackle climate change during the ongoing and deepening crisis over the past year.

Asia’s leading emitters headline the list of a handful of countries that have actually responded to the Glasgow Climate Agreement’s call to raise its climate targets by 2022. New governments in India, Indonesia, the United Arab Emirates, Vietnam and Australia have all raised their targets. Greater ambition is needed to meet the Paris Agreement target of 1.5°C, but regional momentum is moving in the right direction.

Asia is acting because it makes good policy sense. A study commissioned by the High-Level Policy Committee to Net-Zero Asia shows that more ambitious climate action will benefit regional economic development.

If the region fully implemented the climate goals set at COP26, it could boost GDP growth by up to 5.4% by 2030, while creating more new jobs, lowering energy costs and improving energy security. is strengthened. This is a big problem for governments trying to escape the inflationary trap and rising energy prices.

Developing countries also recognize that embracing green change can help mobilize the huge investments needed to make the rhetoric a reality. Sri Lanka and Bangladesh, for example, are among the countries that have announced “Climate Prosperity Plans” that, if funded, could build resilience, reduce poverty and spearhead economic growth.

Similarly, Indonesia and Vietnam have launched new projects, replicating the model in which developed countries pledged US$8.5 billion to South Africa last year to enable a faster exit from coal while protecting the livelihoods of fossil fuel workers. We will be announcing our “Fair Energy Transition Partnership”. Political will and policy certainty are powerful tools for unlocking capital flows from rich donor countries, de-risking private capital, and unlocking new domestic resources.

Asia finds itself in the multilateral hot seat at a crucial time. After this week’s summit, India will take over from Indonesia as her G20 presidency, Japan will host her G7 summit next year, and the UAE, as part of the Asia-Pacific Group, will host the COP28 climate conference next year. Simply put, climate action can be a common thread that can help rebuild consensus in favor of multilateralism.

The G20 can start by calling for a unified commitment among its members to combat climate change as an engine of economic recovery and growth. Following India, the G20 presidency will be replaced by Brazil. This represents a unique opportunity to define what this looks like from the perspective of a major emerging economy.

Another way the G20 can lead is by upping the Bridgetown agenda put forward by Barbados Prime Minister Mia Motley to provide emergency liquidity, increase multilateral lending and mobilize the private sector. In part, in Special Drawing Rights (SDRs) he will seek a new issuance of $650 billion. , reserve assets of the International Monetary Fund). Advancing the Bridgetown agenda requires strong political will from the world’s strongest lenders and shareholders.

Under India’s leadership next year, the G20 should strive to achieve concrete results. This includes devising a blueprint for a modern, resilient energy system. It outlines the policy infrastructure that supports critical climate technologies such as green hydrogen and battery storage to make climate finance work in all developing countries. India could also use the G77 bloc of developing countries as a pioneer to ensure that the G20 meets the needs of the world’s most vulnerable countries.

Multilateralism is grappling with life support at a critical moment for human survival. By putting climate action at the center of efforts to rebuild consensus and revitalize multilateralism, Asian countries will open a window of opportunity to prevent climate disasters around the world. It also facilitates the ability to profit from the large-scale economic and social opportunities created by the transition to the environment.©2022 Project Syndicate



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