G20's green transition?

For nearly two decades, the G20 summit, this year taking place in Hangzhou, China, on Sunday and Monday (September 4 and 5, 2016), has acted as an informal gathering of the most influential industrial and developing countries (Group of 20), including the European Union, United States and China.

Although the original purpose of the G20 summit was for countries to exchange information and advise each other on financial issues, this summit in China features something new: "For the first time ever, G20 in its statement mentioned climate change as a key topic," said Lina Li of Adelphi, an independent think tank on climate, environment and development topics.

Climate change, a hot topic

G20 states produce 85 percent of global economic output and represent two-thirds of the world's population. They also emit around 80 percent of global energy-related greenhouse gas emissions.

"G20 countries recognize that they can play a very critical role in defining the future of environmental protection and climate protection of the world," Li told DW.

Since 2015, energy ministers of G20 countries have been meeting regularly - their last gathering was in Beijing at the end of June this year, where they discussed the future of energy and reduction of greenhouse gases.

This point becomes all the more poignant in light of a recent study by Climate Transparency, which sounded alarm bells over plans for new coal plants.

"Even if only a small fraction of the planned coal plants were built, it would become virtually impossible to keep (global) temperature increase below the 2 degrees Celsius limit, or down to 1.5 degrees Celsius," the report states.

Linking energy and climate policy

Also criticized in the report is Germany. Although the country has made great strides in transitioning to renewables with its Energiewende, and has acted as a role model for climate finance, it still generates a quarter of its electricity from burning coal.

The report also brought attention to continued subsidies for fossil fuels, particularly in the US and China.

Sonja Peterson, science director with the Kiel Institute for the World Economy (IFW) in Germany, points out that a pledge to phase out fossil fuel subsidies has been on the G20 agenda since 2009.

"That would be an important measure to actually reduce emissions," Peterson told DW.

China is likely to reach peak emissions by 2030, and the US has committed to emissions reductions of 26 to 28 percent less than 2005 levels by 2025. The two countries have been pushing the issue forward since 2014.

China's climate-conscious G20 leadership

A shift came about for China during the 2009 climate conference in Copenhagen, Lina Li believes. Before then, China viewed itself as a developing country, less responsible for climate issues than industrialized countries.

"Nowadays, China is also recognized as an emerging economy. It has certain responsibilities, also for this global challenge and to contribute to solutions," Li said.

Also the IFW praised China for its role in the G20 presidency, which rotates yearly. "It's introduced emissions trading systems in various regions," Peterson said, adding that by 2017 this should be nationally implemented.

"China has in the meantime taken the climate issue very seriously, and has accomplished much at the national level," she added.

Internationally, however, China has demonstrated less leadership. Responsible for a quarter of global emissions, the country still hasn't set concrete emission reduction goals.

If the US and China, as the two major players in terms of emissions, don't both carry forward climate policy, Peterson believes there's little point to further climate protection efforts.

Shadow of the Paris Agreement

Despite the hesitancy of the People's Republic in committing to concrete goals, green groups still expect China and the US, ahead of the G20 summit, to jointly announce their ratification of the Paris Agreement on climate change agreed at the end of last year.

Chinese Vice-President Li Yuanchao had already announced this intention at a signing ceremony in New York in April this year. There, 175 states signed the agreement.

But the Paris Agreement will only actually come into effect when at least 55 countries - responsible for at least 55 percent of emissions - have ratified it. To date, only 24 of 197 parties have actually ratified the pact, covering just over 1 percent of emissions.

China and the US together produce about 40 percent of emissions. With Europe's expected ratification, this would cover the requirement.

Li, however, is skeptical that China will ratify the treaty before the G20, and that this may rather happen toward the end of the year. "This would be a very good gesture from the Chinese side," Li said.

Peterson believes the Paris Agreement won't fail like the Kyoto Protocol did - especially because each country is able to determine its own contribution under the Paris framework.

"That would be a first recommendation for G20 countries: Move forward so the treaty can formally come into effect," she said.

G20's green transition

This year's G20 summit marks a change in thinking, both experts agree. Climate change is emerging as a key global problem, which is being discussed at greater depth internationally, including across the financial sector.

Particularly the risks of environmental problems, including climate change, are beginning to be factored into financial decision-making, also to support wider mobilization of green finance.

But it's still not enough, Li thinks. "This is really a good thing that G20 could pick up across its different workstreams - linking the need for change of finance and investment for a green future."