During the upcoming ECOFIN Council on 21 February, you will have the opportunity to give your input towards the EU’s preparation of the terms of reference for the G20 Finance Ministers meeting on 15 & 16 March.
The G20 meeting will be an important discussion for international financial architecture and the direction of financial flows. It will also be a valuable moment to discuss finance in the context of the long- term goals of the Paris Agreement, i.e. to pursue efforts to limit global warming to 1.5°C and reach net zero emissions in the second half of the century.
The EU has an increasingly influential role as a progressive voice within the G20. The EU’s influence on international cooperation for climate action and the realisation of the Paris Agreement will be essential. With this in mind, CAN Europe presents a number of key recommendations on how the EU’s G20 finance position can steer the discussions towards achieving the common vision for a safe and prosperous global economy:
Financing a sustainable future
The G20 has become an important forum for advancing international efforts to adjust the financial system in the interests of equity and sustainable development. The EU should support this effort through setting out how it aims to align European financial markets and public investments with climate and sustainability objectives, as well as how it will mobilise more green finance in a transparent and accountable manner.
The EU can also demonstrate its own efforts to finance the clean energy transition. By guaranteeing that its funds and financing facilities (including EFSI) become fully aligned with mid and long term zero carbon strategies and do not provide subsidies to fossil fuel projects and infrastructure, the EU can spearhead action to shift financial flows in line with the Paris Agreement.
Ending fossil fuel subsidies
Last year, the G7 which also includes the EU set down the objective to phase out fossil fuel subsidies by 2025. While we welcome the G7 commitment, bolder and more immediate efforts are needed. We re-iterate that the EU has pledged to phase out environmentally harmful subsidies - including fossil fuel subsidies - by 2020. In the spirit of the EU’s commitment to international climate action, we re-assert that EU finance ministers agree to develop and agree on a roadmap to phase out all forms of fossil fuel subsidies in the EU and its Member States by 2020 at the latest. Such a roadmap should include strict timelines for the phase-out of fossil fuel subsidies with country-specific and measurable outcomes.
Climate-related risk disclosure
This week, over 16 investors and insurers representing over 2.8 trillion US dollars in assets made a call to the G20 to phase out fossil fuel subsidies by 2020, to accelerate green investments and reduce climate related risk. We call on EU finance ministers to support these demands and contribute to efforts related to financial disclosure that assesses risk on the basis of sound climate science and the 1.5°C temperature limit.
We look forward to an ambitious outcome from your forthcoming council meeting, and from the G20 finance ministers’ meeting in which climate change is recognized as a threat to global well-being, economy, security and sustainable development.
Director Climate Action Network Europe