Climate change gets first mention in G20 finance communique of Trump era
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[February 24, 2020]
By Andrea Shalal and Michael Nienaber
RIYADH (Reuters) - Finance officials from
the world's 20 biggest economies (G20) on Sunday referenced climate
change in their final communique for the first time in U.S. President
Donald Trump's administration, but stopped short of calling it a major
risk to the economy.
The United States blocked including climate change on a list of downside
risks to global growth that had won agreement by nearly all other G20
delegates, but ultimately agreed to permit a reference to the Financial
Stability Board's work examining the implications of climate change for
financial stability.
U.S. Treasury Secretary Steven Mnuchin played down the importance of the
language included, calling it a "purely factual" reference to work being
done by the FSB. But several G20 sources said it marked progress toward
greater recognition of the economic risks posed by climate change.
"I did not bend to pressure from the Europeans," Mnuchin told reporters
after the release of the communique, bristling at the characterization
of one reporter.
Saudi Finance Minister Mohammed al-Jadaan, hosting the meeting in
Riyadh, told reporters that climate change remained a very important
issue on the Saudi G20 presidency agenda and that there had been
discussions related to “financial risks at large” linked to the issue.
Discussions related to "climate change and environmental protection"
would continue at ministerial meetings and in technical groups
throughout the year, he said.
One of the G20 sources said it was the first time a reference to climate
change had been included in a G20 finance communique during Trump's
presidency, even though it was removed from the top of the joint
statement.
U.S. officials have resisted naming climate change as an economic risk
since Trump took office in 2017. One of his first acts as president was
to announce Washington's withdrawal from the Paris climate accord.
Delegates worked out the compromise this weekend after Washington
objected to a proposal to add "macroeconomic risk related to
environmental stability" to a list of downside risks to global growth,
two G20 diplomatic sources said.
The final version of the communique eliminated those words from the
first paragraph, leaving the only mention of climate concerns in the
context of the work being done by the FSB further down in the document.
That passage reads: "Mobilizing sustainable finance and strengthening
financial inclusion are important for global growth and stability. The
FSB is examining the financial stability implications of climate
change."
"We welcome private sector participation and transparency in these
areas."
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Journalists sit in the media center during the meeting of G20
finance ministers and central bank governors in Riyadh, Saudi
Arabia, February 22, 2020. REUTERS/Ahmed Yosri
ESCALATING CONCERNS
G20 finance ministers and central bankers met in the Saudi capital
on Saturday and Sunday to discuss top global economic challenges,
including the spread of coronavirus.
Concerns about the economic impact of climate change have escalated
in recent years and pressure is mounting on business to accelerate
the shift to a low-carbon economy ahead of United Nations climate
talks in November.
A report issued last week forecast the world's financial services
sector risks losses of up to $1 trillion if it fails to respond
quickly to climate change and is hit by policy shifts such as the
introduction of a carbon tax.
The International Monetary Fund included climate-related disasters
in a list of risks that could derail a "highly fragile" projected
recovery in the global economy in 2020.
It estimated that a typical climate-related natural disaster reduced
growth by an average of 0.4 percentage points in the affected
country the year it occurred.
"We should not hide away from what is going on. The climate crisis
is upon us," IMF chief Kristalina Georgieva told a conference in
Riyadh on Friday ahead of the G20 talks.
In a statement after the meetings ended, Georgieva called for
concerted action "to scale up climate change mitigation and
adaptation."
The communique forecasts a modest pick-up in global growth this year
and next, but cites downside risks to this outlook stemming from
geopolitical and remaining trade tensions and policy uncertainty.
(Reporting by Andrea Shalal and Michael Nienaber Additional
reporting by Jan Strupczewksi; Editing by David Holmes, Jan Harvey
and Frances Kerry)
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