Read the statement from the U.S. Treasury:
CLIMATE AND ENVIRONMENT
- The G7 reaffirms its steadfast commitment to the goals of the Paris Agreement and to implement domestic measures aimed at achieving our emission reduction targets by 2030 and net zero by 2050 or earlier. We commit to intensifying efforts to accelerate the transition in a way that positively impacts jobs, growth, fairness and the environment, both globally and at domestic level. Russia´s war of aggression against Ukraine is putting further upward pressure on energy prices and underscores the need to accelerate the reduction of our overall reliance on fossil fuels and strengthen our transition to clean energy. This transition will enhance energy security and mitigate the risk of future energy price shocks, particularly for the most vulnerable, promoting a just transition for all. We, therefore, commit to enhancing international cooperation and coordination on climate mitigation. Effective international cooperation can help facilitate an immediate and orderly global response to climate change, which has huge environmental benefits and has the potential to save trillions of dollars of global GDP by 2050.
- We recognise the potential of high integrity carbon markets and carbon pricing to foster cost- efficient reductions in emission levels, drive innovation and enable a transformation to net zero, through the optimal use of a range of policy levers to price carbon. We recognise that the risk of carbon leakage may increase with more divergent climate policy ambition and will cooperate on possible WTO-compatible mechanisms to mitigate this risk and support trade relations. We support comprehensive cooperation in the transformation and decarbonisation of our economies, in particular in hard-to-abate industrial and power sectors, and welcome ongoing work by Climate and Energy Ministers.
- G7 Leaders agreed to explore establishing an open, cooperative international Climate Club to support the implementation of the Paris Agreement, consistent with international rules and with participation beyond the G7. We are committed to achieving a true paradigm shift, by demonstrating that ambitious climate action is conducive to strong and sustainable growth for all economies. We had a first discussion on the Climate Club proposal based on the Presidency´s proposal for core elements of Terms of Reference for a Climate Club. We commit to intensifying discussions on the Club´s Terms of Reference within the G7 as well as with all interested ambitious partners, including developing and emerging countries in the coming months. We will come back to this issue in our meeting in October 2022.
- We welcome the ongoing work by international organisations on stocktaking and mapping of climate change mitigation policies within the G7 as well as globally, taking into account the complexity and heterogeneity of applied policy mixes. We are committed to sharing best practices in supporting a green and just transformation of our economies. We take note of the joint report by the IMF and the OECD on advancing climate policy ambition under heterogeneous approaches to mitigation. We commit to advancing this work together with international organisations and to work towards a common understanding of ways to compare the effectiveness in reducing emissions as well as the economic impacts of mitigation policies, such as through explicit carbon pricing, other alternative carbon mitigation approaches and carbon intensities.
- We recognise the significant impact of climate change and the transition to net zero on macroeconomic outcomes and fiscal sustainability within our economies and acknowledge the uneven impacts for many low- and middle-income countries and for vulnerable groups in all countries. We recognise the need to reflect the effects of climate change and the transition in our analyses and consider the impact on economic, financial and monetary decision-making, in line with our mandates. We welcome the IMF and World Bank stepping up their engagement on climate change related issues in line with each institution´s mandate and in continued collaboration with partners. G7 central banks are committed to intensifying collaboration on integrating climate risks and aspects into their macroeconomic analysis and modelling toolkit. We support further work on climate-related macroeconomic scenarios and nature-related financial risks by the Network for Greening the Financial System and the Coalition of Finance Ministers for Climate Action.
- We are strongly committed to achieving the collective climate finance mobilisation goal of 100 billion US dollars per year from a wide variety of sources through to 2025 to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation. We expect this goal will be met in 2023. We agree to continue to strengthen and, where possible, increase public climate finance and mobilisation of private sector financing to meet this goal, including through tailor-made just energy transition partnerships with strong country ownership. We commit to continued G7 leadership on climate finance, including for adaptation, and to more detailed work in the Finance Track by our October meeting ahead of COP27, in close cooperation with other relevant G7 Tracks. We support the G7 Partnership for Infrastructure and Investment with the aim to jointly work towards a step change in sustainable financing of quality infrastructure.