The G-7 committed on Monday to “decarbonization of the global economy over the course of this century.” The goal of decarbonization — powering the economy without emitting greenhouse gases — has ascended with dizzying velocity from a plea by activists to acceptance at the highest levels of government. The G-7’s imprimatur increases the likelihood that decarbonization may be included in the global climate agreement this December in Paris.
The value of the G-7 communiqué lies more in the ultimate destination it announces than in its timeframe for getting there. After all, taken literally, “this century” allows fossil fuels another 85 years of cooking the climate. But once investors know that the fossil fuel ship will sink eventually, you can’t blame them for rushing for the lifeboats early.
The decline of fossil fuels may well come faster than anticipated by the G-7’s communiqué, if new predictions for China are any indication. Nicholas Stern and Fergus Green predict that China’s greenhouse gas emissions will peak as soon as 2025, five years ahead of schedule. China’s retreat from the dirtiest fuels, coal in particular, is likely being accelerated to avoid the impacts of air pollution brought to light in the viral video Under the Dome.
Of course the challenges to decarbonizing modern economies are enormous. Fossil fuel industries currently benefit from $5.3 trillion in subsidies identified by the IMF. About one-fifth of these subsidies come out of public budgets through budget support and tax breaks (“sins of commission” as my colleague Bill Savedoff puts it), while the remainder come from public resources in the form of unpriced externalities such as climate change, air pollution, and traffic congestion (“sins of omission”). Encouragingly, the G-7 “remain[s] committed to the elimination of inefficient fossil fuel subsidies.” Its member governments should translate their on-paper commitments to rolling back fuel subsidies into concrete actions, following the lead of Indonesia and India.
It’s worth remembering that decarbonization involves not just powering economies without fossil fuels but also growing food without deforestation. Annual carbon emissions could be reduced by up to 24–30 percent by stopping tropical deforestation and letting forests grow back. The timeline here can be far faster: 32 countries (including all the G-7 countries save Italy) have endorsed the New York Declaration on Forests, which would halve tropical deforestation by 2020 and end it by 2030. The draft Sustainable Development Goals envision an even more rapid timeframe.
The G-7 countries don’t have many tropical forests of their own, outside of a few island states and territories. Instead they should commit in Paris to greater performance-based funding for reducing tropical deforestation. Now that the United Nations negotiations on reducing deforestation are “finished on paper” it’s time for rich countries to scale up finance. Also helpful are initiatives to get deforestation out of supply chains; such efforts received a mention in the G-7 communiqué. G-7 countries should also pay greater attention to the mitigation potential of their own forests.
The G-7 commitment to decarbonization gives climate efforts a welcome boost of momentum on the road to Paris. Look for another big boost next week when Pope Francis is expected to unveil a highly anticipated encyclical on Climate Change.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise.
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