Instruments to facilitate long-term lending critical to facilitate green transition: Mr Amitabh Kant
New Delhi, February 22, 2023: Absence of new instruments to facilitate long-term lending and bottlenecks to free trade are the key challenges in bringing down the cost of green hydrogen, enabling its production in size and scale and, thereby aiding the decarbonization of hard-to-abate sectors said Mr Amitabh Kant, G20 Sherpa at the 22nd edition of the World Sustainable Development Summit (WSDS) in New Delhi on Wednesday.
“If we have to decarbonise the world, the hard-to-abate sectors have to be decarbonised. We need renewables to crack water, use electrolyser, and produce green hydrogen. India is climatically blessed and has top class entrepreneurship to be the least cost producer of green hydrogen, being a major exporter of green hydrogen, and the producer of electrolyser,” said Mr Kant during a session on ‘G20 Leadership for a Green Development Pact’ at the ongoing WSDS.
Observing that the G20 is critical to finding climate solutions, Mr Kant said, “It has the majority of the world’s GDP, economic output, exports, emissions and historical emissions. It is critical to finding climate solutions.” The G20 Sherpa pointed out that “new instruments like blended finance and, credit enhancement” are needed to enable a green transition. Unless the financial agencies are structured to finance for both Sustainable Development Goals (SDGs) and climate finance, it will not be possible to get long-term financing, he observed. “The international institutions which do a lot of direct lending have to become agencies for indirect financing for a long period,” said Mr Kant. Production of green hydrogen in “size and scale” is not possible without free trade, he added.
Any Green Development Pact, Mr Kant, said “requires a major behavioural change in terms of the consumption pattern, in terms of community and individual action, long- term financing, restructuring of institutions to allow the finance to flow.”
Noting that Canada supports India’s G20 focus on blue economy, resource efficiency and ecosystem restoration, Mr Steven Guilbeault, Minister, Environment and Climate Change, Canada, said, “We would like to see the G20 commit to concrete actions for the full implementation of the new Kunming-Montreal Global Biodiversity Framework, a global 30 per cent conservation goal for 2030.”
Underscoring the need for G20 to find global solutions to plastic pollution, Mr Guilbeault added, “We welcome the opportunity to work with G20 partners and others to advance a legally binding international agreement to end plastic pollution.
Pointing out that G20 countries are responsible for around 80% of the energy related CO2 emissions, but hold about 80% of the global renewable energy capacity, he emphasized, “The G20 can go a long way in helping the world achieve its climate goals.”
With India and Japan holding the presidencies of both G20 and G7 simultaneously, Mr Hiroshi Ono, Vice-Minister for Global Environment Affairs, Japan, said “I do hope India and Japan will collaborate and cooperate to move forward both G7 and G20 in a cooperative manner”.
Observing that India’s G20 Presidency is a “great opportunity” to show the way forward, Mr Michael R Bloomberg, UN Special Envoy on Climate Ambition and Solutions, Founder of Bloomberg LP, Bloomberg Philanthropies, said “India has set ambitious goals for more clean energy and electric vehicles and is taking important steps to turn those commitments into actions.” He also noted that through the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure, India is helping countries work together and share ideas. “Indian businesses are finding innovative ways to cut emissions and to collaborate with government leaders to attract more green investment capital,” he added.
Taking part in the session, Mr Andre Correa do Lago, Ambassador of Brazil to India, said, “To solve the issues and challenges of climate change, is essentially a question of economics, finance, and most of all energy emissions.” He also added that India will be launching the International Biofuel Alliance during its G20 Presidency.
Underscoring the importance of climate finance, Dr Bruno Oberle, Director General, International Union for Conservation of Nature, said, “We need 2-3% of the global GDP -- between 2-4 trillion a year -- to make the shift from the unsustainable way in which we are investing today into a sustainable investment pattern.” Professor Iain Martin, Vice Chancellor, Deakin University, observed that if G20 has to deliver, it has to find ways of building bridges between universities, governments and industries
In his address in the Opening Session of the Summit, Mr Jeffrey D Sachs, Professor, The Earth Institute at Columbia University, too emphasized the criticality of India holding the G20 Presidency this year. “We have four years in a row of countries representing the voice of the real world at the head of the G20. Indonesia last year, India this year, Brazil next year and South Africa the year after. Please understand you have the power to make change. Please understand the BRICS countries now are larger than G7 economies. The world is in your hands, please take care of it. We are in the thick of the battle,” he said.