Obama, Merkel Seek to Parlay G-7 Meetings Into Climate Action

(Bloomberg) -- U.S. President Barack Obama and German Chancellor Angela Merkel speak about the outlook for the Group of Seven leaders' summit in the Bavarian Alps. They speak in the German town of Kruen. (This is in English and German. Source: Bloomberg)

President Barack Obama’s meeting Sunday with German Chancellor Angela Merkel is an opportunity for the pair to champion an issue dear to them both: climate change.

The pair will talk upon Obama’s arrival at the site of the Group of Seven meeting in the Bavarian Alps, one of the last, best opportunities for the leaders from some of the world’s largest industrialized economies to shore up support for a global climate accord before the Paris climate conference in December.

The G-7 summit coincides with talks hosted by the United Nations in Bonn, where staff-level negotiators are ironing out many of the details of the accord leaders plan to announce in Paris. While leaders of the assembled nations generally agree on the need to address climate change, domestic politics and strained budgets have slowed translating that into action.

Merkel and Obama are staking their legacies on it.

The German chancellor has made energy central to her political platform since the 2011 Fukushima disaster in Japan, working to close Germany’s nuclear plants and heavily investing in renewable energy.

“Chancellor Merkel clearly hopes that this year’s summit will demonstrate the commitment of G-7 countries to delivering a Paris agreement that achieves both broad participation and strong ambition,” said Elliot Diringer, the executive vice president of the Center for Climate and Energy Solutions, a nonpartisan policy group in Arlington, Virginia.

Obama Priority

Obama, meanwhile, has made addressing climate change a priority in his second term. He’s pledged to reduce U.S. emissions by between 26 and 28 percent from the 2005 baseline within the next 10 years and last year announced a surprise agreement with China on capping carbon emission.

“We see the G-7 as an important milestone on this issue, and one where we will be able to speak with other G-7 countries about ways that we can move both with announcing our own targets and taking steps to support other countries,” deputy national security adviser Caroline Atkinson said.

Merkel has given a discussion of energy and climate issues prime billing on the G-7 schedule, with a session slated for world leaders on Monday morning.

And other world leaders may be feeling the pressure. A group of 120 chief executive officers of investment funds and other representatives of major institutional investors wrote in late May to the G-7 countries’ finance ministers, asking them to improve their commitments to reducing greenhouse gas emissions.

System Risk

“As institutional investors responsible for managing the retirement savings and investments of millions of people or managing endowments, we believe climate change is one of the biggest systemic risks we face,” the letter from the Institutional Investors Group on Climate Change read.

The signatories include Richard Trumka, president of the AFL-CIO labor union federation, Katherine Garrett-Cox, CEO of the U.K.’s Alliance Trust Savings Ltd., and Jack Ehnes, CEO of the California State Teachers’ Retirement System, or Calstrs, which manages assets of $191 billion.

Leaders are expected, at minimum, to issue statements reaffirming the importance of a global treaty and the shared goal of limiting the rise in global average temperatures to less than two degrees Celsius (3.6 degrees Fahrenheit) above their pre-industrial levels.

Merkel used her weekly podcast Saturday to urge G-7 leaders to commit to a limit on rising temperatures -- or else. “I hope that we as G-7 nations can clearly say that we stand by these goals,” she said from Berlin. “Otherwise, in my view there will be no agreement in Paris.”

Policy Announcements?

Likewise, for Obama, a global treaty is “one of the remaining to-do items on his list,” said Matt Goodman, a senior adviser at the Center for Strategic and International Studies think tank in Washington. “He’s going to want to see the G-7 make a strong statement of ambition heading into that Paris meeting.”

Less clear is whether that affirmation will be accompanied by the substantial policy announcements sought by environmental groups.

One major concern involves promised donations to the Green Climate Fund, a United Nations initiative designed to help poorer countries limit their carbon emissions. Key developed countries, including the U.S., Japan, and Canada, failed to meet an April 30 deadline to convert $4.7 billion in pledged assistance into concrete payment timetables.

“This is probably the area where developed country leadership is most essential in setting the stage for Paris, but it’s also extremely challenging,” Diringer said. “It will be important for the G-7 leaders to do more to demonstrate that developed countries are on track to achieving that goal.”

Payments Delayed

In the U.S., payments would need the approval of the Republican-controlled Congress, while other nations are grappling with tight budgets.

Although experts doubt that concrete pledges will materialize in Germany, they say it’s important for the G-7 economies to reiterate their commitments. Merkel last month announced that Germany would double its total contribution to international climate finance by 2020, a move interpreted as a bid to ratchet up pressure on other G-7 countries.

Merkel and French President Francois Hollande also committed in May to cut global emissions 60 percent from 2010 levels within the next 35 years. The G-7 agreed to cutting emissions by 50 percent in both 2008 and 2009, and an endorsement of the more aggressive target would be a win for the German leader.

’Burden Sharing’

“The problem that runs into in the formal negotiations is the question of burden sharing between developed and developing countries -- who’s responsible for how much of that reduction,” Diringer said. “There may be a strong reluctance among some of the other leaders to head down that road again.”

The G-7 is also an opportunity for the other assembled nations to pressure Japan to release a post-2020 climate action plan outlining its targets for reducing greenhouse emissions.

While there’s been no sign that Prime Minister Shinzo Abe will unveil such a plan at the G-7, the surprise agreement on emissions targets that Obama was able to secure from Chinese President Xi Jinping may be a motivator.

“One reason Prime Minister [Shinzo] Abe may be willing to make a commitment is to once again not be overshadowed by the Chinese,” Patrick Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security.

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