G20 leaders for inclusive growth, flag $4 trillion a year needed for clean energy tech

With several parts of the world including India reeling under high inflation, the document noted that central banks remain strongly committed to achieving price stability and ensuring that inflation expectations remain well anchored.

New Delhi: G20 leaders on Saturday called for a strong, sustainable, and inclusive growth as an answer to the uneven recovery the world has seen from the pandemic-infused plunder, and flagged trillions of dollar that countries would need to meet their climate goals and clean energy technologies.

The New Delhi Declaration adopted at the Summit of leaders of the world's top 20 economies held under India's presidency also called for reforming of international financial institutions, managing debt vulnerabilities of low and middle-income countries and the start of exchange of tax-relevant information on crypto assets by 2027.

The declaration called for accelerating efforts to phase down unabated coal power, phase-out of inefficient fossil fuel subsidies and low-cost financing for energy transition of developing countries. While developing countries need USD 5.8-5.9 trillion in the pre-2030 period for their climate goals, the world would need another USD 4 trillion per annum investment by 2030 to help reach net-zero carbon emission goal by 2050.

Stating that cascading crises have posed challenges to long-term growth, the declaration called for well calibrated macroeconomic and structural policies to counter the challenge of an uneven recovery, and boost long-term growth. "We will protect the vulnerable, through promoting equitable growth and enhancing macroeconomic and financial stability."

"With notable tightening in global financial conditions, which could worsen debt vulnerabilities, persistent inflation and geoeconomic tensions, the balance of risks remains tilted to the downside. We, therefore, reiterate the need for well-calibrated monetary, fiscal, financial, and structural policies to promote growth, reduce inequalities and maintain macroeconomic and financial stability," it said.

With several parts of the world including India reeling under high inflation, the document noted that central banks remain strongly committed to achieving price stability and ensuring that inflation expectations remain well anchored. "We will prioritise temporary and targeted fiscal measures to protect the poor and the most vulnerable, while maintaining medium-term fiscal sustainability."

Recognising the critical role of private enterprises in accelerating growth and driving sustainable economic transformations, they resolved to facilitate investments including Foreign Direct Investments (FDIs) and promote the ease and reduce the cost of doing business. "We reaffirm that a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system, with WTO at its core, is indispensable," the declaration said.

With the war in Ukraine triggering a spike in energy prices particularly of natural gas in 2022, the leaders emphasized the importance of "maintaining uninterrupted flows of energy from various sources, suppliers and routes, exploring paths of enhanced energy security and market stability, including through inclusive investments to meet the growing energy demand."

The spike in gas prices had led many countries, including that in Europe to switch to coal, the polluting fossil fuel they had committed to phasing down. This was seen by some as a threat to the climate goals and the target of bringing down carbon emission to zero. But G20 leaders recognised the need of the present energy systems to support growth. "Recognizing that developing countries need to be supported in their transitions to low carbon/emissions, we will work towards facilitating low-cost financing for them," the declaration said.

"Will work towards facilitating access to low-cost financing for developing countries, for existing as well as new and emerging clean and sustainable energy technologies and for supporting the energy transitions." They took note of the report on 'Low-cost Financing for the Energy Transitions' prepared under the Indian Presidency and its estimation that the world needs an annual investment of over USD 4 trillion, with a high share of renewable energy in the primary energy mix.

"Will pursue and encourage efforts to triple renewable energy capacity globally through existing targets and policies, as well as demonstrate similar ambition with respect to other zero and low-emission technologies, including abatement and removal technologies, in line with national circumstances by 2030," the declaration said.

The leaders agreed to increase efforts to implement the commitment made in 2009 in Pittsburgh to phase out and rationalise, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption and commit to achieving this objective, while providing targeted support for the poorest and the most vulnerable.

They also were in favour of "accelerating efforts towards phasedown of unabated coal power". "We note the need of USD 5.8-5.9 trillion in the pre-2030 period required for developing countries, in particular for their needs to implement their NDCs, as well as the need of USD 4 trillion per year for clean energy technologies by 2030 to reach net zero emissions by 2050," the document said.

It reaffirms the 2010 call for the developed countries to mobilize jointly USD 100 billion climate finance per year by 2020, and annually through 2025, to address the needs of the developing countries, in the context of meaningful mitigation action and transparency in implementation. "Developed country contributors expect this goal to be met for the first time in 2023."

The leaders called for setting an ambitious, transparent and trackable New Collective Quantified Goal (NCQG) of climate finance in 2024, from a floor of USD 100 billion a year, taking into account the needs and priorities of developing countries in fulfilling the objective of the UNFCCC and implementation of the Paris Agreement.

Emphasizing on the importance of healthy ecosystems in addressing climate change, biodiversity loss, desertification, drought, land degradation, pollution, food insecurity and water scarcity, the G-20 committed to restoring by 2030 at least 30 per cent of all degraded ecosystems and scaling up efforts to achieving land degradation neutrality.

On reforming international financial institutions, the declaration underscored the need for enhancing representation and voice of developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions.

"The international finance system must deliver significantly more financing to help developing countries and EMEs to fight poverty, tackle global challenges and maximise development impact," it said. "We reiterate our commitment to a strong, quota-based, and adequately resourced IMF at the centre of the global financial safety net."

The leaders said they were committed to revisiting the adequacy of quotas and will continue the process of IMF governance reform, including a new quota formula as a guide, and ensure the primary role of quotas in IMF resources, to be concluded by December 15, 2023. Emphasising the importance of addressing debt vulnerabilities in low and middle income countries in an effective, comprehensive and systematic manner, the document called for continued discussion on policy-related issues linked to the implementation of the Common Framework for making appropriate recommendations.

G20 leaders also decided on swift implementation of the automatic exchange of tax relevant-information on crypto assets, saying a significant number of member nations want such reporting exchanges to start by 2027. "We resolve to deploy all available digital tools and technologies and spare no effort in fostering safe and resilient digital ecosystems, and ensuring that every citizen on our planet is financially included," the declaration said.

On Artificial Intelligence (AI), it stressed on international cooperation and further discussions on international governance for a safe, secure, trusted, accountable and inclusive digital public infrastructure (DPI). (PTI)