Chairman and CEO
The Institute of Energy Economics, Japan
“G20: The voice of the Global South in energy policy”
Message for August 2023
The G20 Energy Transitions Ministers’ Meeting in Goa, India produced its Outcome Document and Chair’s Summary on July 22. The comparison between those documents and the content of the G7 Hiroshima Summit Communiqué that was released last May, deserves close attention. The discussion among energy think tanks from ASEAN, East Asia and India that took place in New Delhi just before the Ministers’ Meeting, was also of interest and very informative. That workshop was organized by the Energy Research Institute Network (ERIN), and co-organized by ERIA and TERI. In brief, the voice of the Global South was expressed in those two events far more clearly than during the G7 Summit.
1. “Various Pathways”
Prime Minister Kishida has stressed that one of the major messages coming out of the G7 Hiroshima Summit was the “Common Goal, Various Pathways”. Reflecting the unique circumstances and constraints of each country, PM Kishida reiterated that there should be various pathways towards carbon neutrality. This message seemed to resonate far more with the G20 members, especially those with more diverse backgrounds and at different stages of development. I believe the message of “various pathways” to be very important and should be obvious to the advanced economies that so far have a tendency to insist or dictate a single pathway, often in a single step, on other countries including those from the Global South. The ERIN workshop also strongly agreed with the “various pathways” message.
2. Supply chains of critical minerals/materials
There was a strong consensus at the G7 on the need to ensure the resilience of the supply chains of critical minerals/materials. I believe it is worth noting that this issue of resilience was also shared and recognized by the many more countries and different backgrounds of the G20 members. The supply chains of critical minerals/materials are no longer a concern limited to the advanced economies, they have become an issue of global importance. The ERIN workshop also addressed this issue and pointed out the importance of critical minerals/materials.
Regarding hydrogen, the G7 Hiroshima Summit stressed the need to establish standards based on carbon intensity rather than simply how the hydrogen is produced. In other words, the G7 terminated the debate about “coloring” hydrogen.
It should be noted that the G20, representing a larger group of countries, recognized the importance of hydrogen and its derivatives such as ammonia. It is also noteworthy that the G20 basically endorsed the direction set by the G7 and it is time for the world to accelerate an acceptable standard setting for hydrogen.
4. “Energy security, energy access, market stability and energy affordability”
At the G7, “energy access and energy affordability” were virtually not mentioned while “energy security and market stability” were discussed in a very limited manner.
In sharp contrast, the G20 repeatedly stressed the importance of “energy security, energy access, market stability and energy affordability”. These basic principles and viewpoints are very important for the Global South. It is therefore only natural that the G20 has highlighted these perspectives, and particularly the “energy access, market stability and energy affordability”. The G20 has played a very important role in highlighting these important points which were largely overlooked at the G7. We can clearly see the significance of having the G20 process in addition to the G7 process.
5. The need for adequate investment.
While the G7 agreed to the need for additional investment in the gas sector to meet the shortfall caused by the current crisis, the G20 added even stronger justifications for such investment. The G20, having recognized the importance of “energy security, energy access, market stability and energy affordability”, has stressed the importance of ensuring that the growing global energy demand is matched by sustainable and affordable energy supplies. The importance of inclusive investments to meet the growing energy demand was emphasized. The G20 recognized the need for adequate energy investments towards sustainable, affordable, reliable, resilient, and cleaner energy systems.
I believe that these points, which were also highlighted during the ERIN workshop, are extremely important. With all the pressures against investment in conventional energies, the global energy markets have been affected by chronic shortage of investments over the recent years and they now face serious risks of underinvestment which could result in a series of future price hikes. I hope the messages from the G20 can change the current discourse and it would be vital to have these messages clearly and fully incorporated in the Leaders’ Communiqué which will be issued on September 10.
6. Unsettled points: Unabated fossil fuels and Ukraine
The G20 Energy Transitions Ministers’ Meeting has failed to reach agreements on the languages concerning unabated fossil fuels and Ukraine. This is the main reason why a Chair’s Summary was issued rather than a Ministers’ Statement.
I sincerely hope that an agreed upon Communiqué will be issued at the G20 Leaders’ Meeting in September. This will depend on the leadership of India as the chair and the willingness of other G20 members to be cooperative and constructive.
While it appears that some members were pushing for the language of “phasing down unabated fossil fuels”, there were others stressing the current important role that fossil fuels play in the global energy mix, eradication of energy poverty, and in meeting the growing energy demand. There were also members pointing out that abatement and removal technologies can address the concerns. There seems to be a serious divide between the “West” and the “Global South” on this point and it will not be easy to develop the language which could bridge the different positions. I hope that the direction for the CO2 reductions could be set clearly while making sure that adequate investment in conventional energies will be made to meet the growing energy demand and keep the market stable throughout the transition period. It will be the people of the Global South that would be hit most severely by possible shortages of supplies and market disruptions. The G20, including the G7 members, have the responsibility to avoid such outcomes while ensuring sustainability and smooth transitions.
As for the crisis in Ukraine, the positions of some members of the G20 are so wide apart, no agreements are realistically possible. But disagreements should not prevent an agreed upon Communiqué at the Leaders’ Meeting. At the G20 Osaka Summit in 2019, to which I had the honor to participate as the Vice Minister of METI, the very different positions on global warming between the members of the European Union and the US were captured in the language of the Communiqué. There was no agreement on the positions but there was an agreement on the language describing the different positions. This arrangement required the negotiations among the leaders including PM Shinzo Abe and President Donald Trump. In retrospect, we believe that it was very much worthwhile issuing an agreed upon Communiqué rather than a Chair’s Summary. The G20 leaders actually agreed on many issues and it was valuable to demonstrate unity to the world.
As it is also time to demonstrate unity today, I hope there will be an agreed upon Communiqué to be issued this year at the G20 India Summit on September 10. There are many points on which the leaders can agree on, and I believe that such agreements and the unity should be demonstrated to the world through an agreed upon Communiqué .