Key Climate Talks Are Headed for Trouble After G-7 Wrangling

(Bloomberg) -- Global leaders say they want decisive action on tackling climate change at a crunch UN summit this year. The behind-the-scenes arguing among Group of Seven delegates -- when progress was blocked by last-minute nerves, political tensions and a shortfall of funding -- shows just how far they have to go.

Diplomats and ministers working toward the COP26 UN climate talks starting in Scotland in October worry that the summit’s chances of success may be in jeopardy. One senior British figure privately said the vital gathering is likely to disappoint.

If leaders cannot step up in Glasgow and agree to measures to keep global warming to 1.5 degrees Celsius, and to deliver on a $100 billion-a-year financing pledge to help the poorest countries adapt, the consequences for the planet could be dire.

Last weekend at the G-7 on the coast of Cornwall, southwest England, U.S. President Joe Biden and Italian Prime Minister Mario Draghi were among those who fell short as other leaders in the group pushed for more ambitious goals, according to officials who asked not to be named discussing private talks.

Coal, Fired

During intense negotiations in the days leading the gathering, leaders’ aides were drawing up a deal on ending domestic coal use in G-7 economies, having already agreed to stop financing international coal projects.

Officials expected it would be particularly hard for Japan to commit, given the country’s reliance on coal power after closing nuclear plants following the Fukushima disaster in 2011. Yet Japanese Prime Minister Yoshihide Suga’s team came around to the idea, and backed it during talks.

It seemed that all seven nations would be able to agree to the landmark pledge in Cornwall, which would set the tone for other countries to follow in phasing out fossil fuel generated power.

At the 11th hour, however, Biden’s officials became nervous about the impact on domestic politics and the White House refused to sign off on the plan, which then had to be left out of the final summit communique, according to officials, and a diplomatic note summarizing the meetings.

It was also the U.S. that blocked a G-7 initiative to make the majority of new passenger car sales zero-emission vehicles by 2030, an aim British leader Boris Johnson and German Chancellor Angela Merkel were ready to back, officials said.

G-7 Drops Aim to Shift New Car Sales Away from Oil By 2030

The Money

Leaders of the rich economies represented at the G-7 know they have one key pledge they must meet if they’re to encourage developing countries to get on board with cutting emissions: delivering $100 billion a year in finance for the poorest nations.

Here, too, Biden was unable to commit to new numbers for how much the U.S. will contribute, after four years in which Donald Trump failed to spend what was needed. The G-7 agreed that each member would increase the amount they give toward the total of $100 billion annually, but not everyone announced how much more they’d spend.

Angela Merkel agreed to raise Germany’s 4 billion-euro ($4.8 billion) annual payment to 6 billion by 2025. Canada’s Justin Trudeau vowed to double his country’s share to C$5.3 billion ($4.3 billion), which was seen by the U.K. as an important win.

But when it came to Italy’s turn, Draghi’s team could only muster another 100 million to 150 million euros a year. Italy then decided not to formally make that pledge when it became clear that it would be embarrassingly low compared to other countries’ contributions, according to British and European officials and a diplomatic note of proceedings. Instead, the Italian government is expected to announce its contribution later in the year, the officials said.

A spokesperson for the Italian government said there was no negotiation on individual nations’ pledges for climate finance at the G-7 meeting. Italy is in the process of assessing its commitment with a view to the forthcoming Group of 20 meetings, the spokesperson said.

COP Fears

The big concern for the COP organizers now is that governments aren’t making fast enough progress to be able to deliver on their key goals. Unless developing countries are confident the $100 billion a year will be reached, they’ll never agree to the expensive steps needed to reduce their reliance on fossil fuels, officials said.

“I acknowledge there is much further to do both in terms of raising commitment and articulating a collective vision on how the [$100 billion] goal will be met in the coming years,” said COP26 President Alok Sharma, who serves in Johnson’s U.K. government. “We need to move faster, because we’re now in the homestretch to COP26. With just over four months to go, we really need to get going.”

There are already worries that a huge summit with perhaps 20,000 people attending in person will be a logistical nightmare to hold as winter approaches in the U.K. during the pandemic. The summit was postponed last year as coronavirus raged around the world, but Johnson’s team is adamant that preparations will continue for an in-person event this year.

Even so, many of the preparatory talks between governments are taking place virtually, and that makes building trust and ensuring meetings are productive much harder, according to one person involved. Cajoling all the nations involved in COP talks poses a much tougher challenge to U.K. leadership than bringing the close, rich allies of the G-7 into line. The COP summit has been extended by a day to give delegates more time to make progress.

COP26 Climate Talks to Start Earlier as Nations Lament Progress

Stronger Action

“Tackling climate change is a central mission of our G-7 presidency and we’ll continue working with the G-7 nations and others to agree even stronger action to limit global emissions ahead of the COP26 UN Climate Conference in Glasgow,” a British government spokesperson said in emailed statement.

British officials privately believe Biden will come around to pledging more money, and according to one person familiar with the G-7 talks, the U.S. team did say it will accelerate the timetable for doubling its contribution to climate finance, but just not yet.

Biden’s climate envoy, John Kerry, told Bloomberg the U.S. would provide more money to help developing countries cut emissions and adapt.

Other nations’ governments watching Biden believe a key worry for him is the domestic political pressure in the U.S. With a razor-thin Senate majority for the Democrats, West Virginia Senator Joe Manchin -- who is a staunch backer of his home state’s coal industry -- holds huge sway and is stopping the president being more ambitious, some officials suggested.

The White House declined to comment specifically on whether domestic concerns had prevented Biden backing more ambitious steps at the G-7. Daleep Singh, Biden’s deputy national security adviser, said the president had already rallied the rest of the world to embrace “bold targets” at his leaders’ summit earlier this year.

Biden’s Defense

“At the G-7, the led the effort to establish a new multilateral infrastructure partnership called build back better for the world that will be instrumental in helping developing countries transition to a clean economy,” Singh said in a statement. “We also pushed for and agreed to aim for a reallocation of $100 billion of IMF resources to low income countries that could be used for investment in clean technology. And we agreed to commit now to the end of international financing of coal power generation this year.”

A senior administration official said Biden remained as committed as ever to the climate targets he has set, including achieving a carbon pollution-free power sector by 2035. Between now and COP, the U.S. will be working hard to accelerate the global transition to clean energy and to mobilize funding, the official said.

U.K. Attacks ‘Offensive’ EU as Brexit G-7 Argument Escalates

Even if the U.S. steps up its commitments, the fallout from Brexit remains a danger for negotiators to contend with. Some involved worry that Johnson, who hosted the G-7 and is also hosting COP, may be too unpopular with European leaders to be able to convince them to go the extra mile in climate talks.

The atmosphere at the G-7 became particularly heated between Johnson and French President Emmanuel Macron, in a simmering dispute over trade in sausages to the U.K. region of Northern Ireland. At one point, Macron appealed publicly for “calm.”Johnson will need plenty of that as the COP deadline gets closer.

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.