The Group of Seven Ministers’ Meeting on Climate, Energy and Environment took place on April 15-16 in Sapporo, a northern city of Japan. What transpired in those two days was historically significant.
For one thing, the IPCC’s Synthesis Report put out in March this year gave yet another shove of urgency to climate negotiations. For another, the world’s wealthiest democracies seemed to rise to that urgency by agreeing to massively increase the share of renewable energy while still falling short of penning an explicit date by which to phase out coal.
For Japan, it was a watershed moment in a different way. It was a moment when the covers over its faulty decarbonization plan were blown, nakedly exposed for world leaders to see.
This post is the first of a three-part series on this year’s G7 meeting on climate, energy and environment, and what it meant for Japan.
In Part I, let’s get into what was agreed on, and the why’s and the how’s.
The Agreement
The G7 held its first meeting in 1975 in Rambouillet outside Paris. Turmoil in the global monetary system drew the presidents, prime ministers, and chancellor of the most powerful seven states together to figure out the rules of the game for the new era of floating exchange rates.
The meeting was informal and supposed to be a one-off. Yet here we are in 2023, talking about another G7 summit.
Over time, G7 summits became accompanied by side meetings of ministers overseeing particular issue areas. Of these many ministerial meetings, the G7 Meeting on Climate, Energy and Environment sets the global agenda for climate policy.
Delegates from G7 countries argue over every word that crawls its way into the final agreements. The communiqués, as the agreements are called, are nuanced documents. They often read like bland value statements, which attests to the fact that they’re literally the parchment papering over the disagreements between countries. Yet, it’s possible to read between the lines to glean the politics that transpired in the room where it happened.
The topics covered in this year’s communiqué are wide-ranging. Broadly speaking, it covers commitments on climate change, biodiversity loss, and pollution. Here, we focus on the parts dealing with energy as it relates to climate change, starting on page 15.
At a high level, the ministers agreed to:
Adhere to the Paris Agreement’s goal of limiting global warming to 1.5C° above pre-industrial levels
Peak global greenhouse gas (GHG) emissions as soon as possible by 2025 at the latest and to achieve net-zero emissions by 2050 at the latest
Highlight the increased urgency to reduce global GHG emissions by ~43% by 2030 and 60% by 2035, using 2019 as the baseline.
These are aggressive and forward-looking commitments. It hints at the Group’s earnest attempt at heeding the IPCC’s warnings. But it puts Japan in a difficult position. Japan’s current emissions reduction target by 2030 is 46% reduction compared to 2013 levels. While it’s hard to draw a direct comparison to this G7 reduction agreement because of the different baselines, it’s clear that Japan will have to up its ante if it’s to meet the agreement.
Renewables
The biggest headline coming from the ministerial meeting was their agreement on renewables:
Offshore wind: Collectively increasing offshore wind capacity by 150 GW by 2030 based on each country’s existing targets (maybe the ad in Nikkei worked its magic ;)
Solar: Collectively increase solar PV to more than 1 TW (!) by 2030
Increasing renewables by these margins is a huge deal. It signals the G7’s understanding that solar and wind, as the cheapest climate change solution, are ready for take-off. Energy sources like nuclear, hydrogen, biomass and biofuels may have their place, but this agreement is a clear acknowledgement that wind and solar are hands down the lead acts in electrifying the power sector.
Fossil Fuels
On fossil fuels, here’s what they say:
Power sector and unabated coal: Committing to achieving a fully or predominantly decarbonized power sector by 2035, and prioritizing concrete and timely steps toward the goal of accelerating the phase-out of domestic unabated coal power generation
Natural gas and LNG: Investment in the gas sector can be appropriate to help address potential market shortfalls provoked by Russia’s invasion of Ukraine, subject to clearly defined national circumstances, and if implemented in a manner consistent with nations’ climate objectives and without creating lock-in effects.
During the Hiroshima Summit, this was revised to "publicly supported investment in the gas sector can be appropriate as a temporary response.”
These agreements are less cheerful. For one, leaders reiterated from last year their commitment to “fully or predominantly” decarbonize the power sector by 2035. And they committed to speeding up the phasing out of unabated coal power. We should celebrate these clauses, but with qualification. A “predominantly” decarbonized power sector leaves room for countries to keep burning some fossil fuels, and the goal to phase out unabated coal doesn’t come with an explicit timeline.
Natural gas and LNG are complex energy sources at the moment. As senior associate at E3G Alden Meyer noted, the G7’s agreement last year stressed the important role that an increased delivery of LNG can play in easing supply chain disruptions in pipeline gas, especially in European markets. Keep in mind that they were meeting only months after Russia began its invasion of Ukraine, shocking global gas supply. In that agreement, they said that an investment in gas and LNG is “necessary.”
Compared to that wording, this year’s communiqué places far less importance on gas and LNG, saying that investment in this sector “can be appropriate.” What’s going on here is that the G7 is recognizing the need for gas investments in the short-term to help Europe break free from Russian gas and to help developing countries bearing the burden of high gas prices caused by the war. But it also recognizes that the demand for gas will be falling in many of these markets in the next two decades, so in Meyer’s words, “long-lived investments in new LNG infrastructure will be a fool’s errand.”
Nuclear Power
On the issue of nuclear power, the communiqué’s language walks a tightrope:
“Those countries that opt to use nuclear energy recognize its potential to provide affordable low-carbon energy that can reduce dependence on fossil fuels, to address the climate crisis and to ensure global energy security as a source of baseload energy and grid flexibility. They commit to maximizing the use of existing reactors safely, securely, and efficiently, including by advancing their safe long-term operation, in addressing the current energy crisis” (p. 27)
While generally supporting nuclear power as a solution to climate change and energy security, this wording reflects the deep tension between countries’ attitudes toward nuclear. This ministerial meeting ended just as Germany shut down its last three nuclear power plants. Japan, on the other hand, is working to restart nuclear reactors that have been paused since the 2011 Fukushima disaster and extend the lifespan of some reactors.
Hydrogen and Ammonia
Arguably the most niche fuel of all is actually the biggest sticking-point for Japan: the production and use of hydrogen and ammonia. Two points in the communiqué are salient here, and like nuclear power, the ministers chose their words with caution:
Renewable hydrogen and its derivatives like ammonia should be used as emission reduction tools in hard-to-abate sectors in industry and transportation.
“We also not that some countries are exploring the use of low-carbon and renewable hydrogen and its derivatives in the power sector to work toward zero-emission thermal power generation if this can be aligned with a 1.5C° pathway and our collective goal for fully or predominantly decarbonized power sector by 2035, while avoiding N2O as a GHG and NOx in general as a regional air pollutant and precursor to tropospheric ozone.” (p. 25)
Forgive me for that lengthy quote, but I think it’s important to see the exact wording employed here. First, the ministers make it clear that hydrogen and ammonia should be used primarily as a way to reduce emissions from sectors that are difficult to electrify, like industry and long-distance transport. Second, the communiqué calls out “some countries” for attempting to use hydrogen and ammonia for power generation, rather than industry and transport. The language is very qualified – it only supports these measures “if this can be aligned with a 1.5C° pathway” and with the goal to decarbonize the power sector by 2035.
Japan is the elephant in the room here – it’s the only G7 country pursuing mixing ammonia with coal as a way to cut emissions. It’s also doggedly trying to adopt hydrogen (produced using fossil fuels rather than renewables) for power generation.
But think tanks have shown that ammonia co-firing doesn’t sufficiently reduce emissions, is misaligned with a 1.5C° goal, and is too costly. They’ve also argued forcefully that Japan’s dream of using hydrogen for every sector (according to its 2017 Basic Hydrogen Strategy) is misguided.
Of all of the differences between Japan and the other G7 countries, the pursuit of technologies that prolong fossil fuel power generation – ammonia co-firing, hydrogen and carbon capture – is likely to estrange it from the rest of the world forging a path to clean energy.
It’s a Piece of Paper. Why Bother?
You might be thinking “the G7? That’s just an informal club of rich countries. These agreements are just unenforceable pieces of paper. They don’t matter in the grand scheme of things.”
Yes, yes, and no.
True that the G7 is a bit of an arcane and dusty club of industrialized, mostly western democracies. True that these agreements have no enforcement mechanisms. But these pieces of paper do in fact matter in the global struggle to wean off of fossil fuels.
There is literally decades of research on why governments obey international law, and the reasons are many. While a G7 agreement is much less than a treaty, it does similar things – establish a set of agreements and reinstate common values among a close cohort of countries, inflict reputational damage if a member falls too short of those agreements, and signals the G7’s intentions to non-G7 countries, other international organizations, private-sector companies, NGOs and advocacy groups, who in turn often keep the G7 countries accountable.
This is why I think this year’s G7 was a historical moment in several ways. The ministers broadcasted to the world their intention to aggressively curb greenhouse gas emissions. They also agreed to scale up renewables, which gives a green light to other countries, financial institutions, renewable energy companies and other stakeholders to double down on renewable energy. That the G7 shifted their attitude toward gas and LNG investments from “necessary” to “can be appropriate” is also meaningful. It’s a strong signal to those considering gas investments that in the future, demand and price for gas will dwindle, putting those investments at risk.
But those same qualities can also backfire if the agreement is vague or leaves loopholes. For example, G7 ministers’ nod toward gas investments has encouraged Tokyo Gas to continue investing in gas infrastructure. Tokyo Gas is one of Japan’s largest buyers of LNG that holds upstream gas assets in Asia and the US.
Failure to agree on deadlines for key climate actions also weakens the G7’s leadership on the world stage. “Every time they allow carve-outs,” Alden Meyer of E3G said pointedly, “they give other countries an excuse to say ‘well, you talk a big game, but you’re not delivering at home.” I agree wholeheartedly.