The Group of 20 (G20) Finance Ministers and Central Bank Governors concluded a two-day meeting in Shanghai, China, pledging to enhance economic resilience, promote infrastructure investment, cooperate on tax matters and develop options for mobilizing private capital for green investment.
27 February 2016: The Group of 20 (G20) Finance Ministers and Central Bank Governors concluded a two-day meeting in Shanghai, China, pledging to enhance economic resilience, promote infrastructure investment, cooperate on tax matters and develop options for mobilizing private capital for green investment.
Following their meeting on 26-27 February 2016, delegates issued a communiqué highlighting their commitments, and presented a 16-point plan for further action. Among other commitments, delegates agree to launch a global infrastructure connectivity alliance to enhance cooperation, to address challenges arising from large and volatile capital flows, and to combat financing of terrorism.
They also call on all countries to join the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, welcome the Addis Tax Initiative, and suggest that China establish an international tax policy research center that could also provide technical assistance to developing economies. They recognize the role of tax policy in achieving sustainable economic growth, and anticipate exploring the issue further at the G20 Tax Symposium convening in July 2016.
Referencing their establishment of the G20 Green Finance Study Group, which met for the first time in January 2016, the ministers and governors call on the Group to identify institutional and market barriers to green finance, and develop options for mobilizing private capital for green investment. The Group is asked to deliver a synthesis report by July 2016.
On climate change, the member States of the G20 welcome the adoption of the Paris Agreement, as well as the commitments and announcements made on climate finance, and call for timely implementation. They stress that developed country Parties “shall provide financial resources, including support provided through the Green Climate Fund (GCF), to assist developing country Parties with respect to both mitigation and adaptation, in continuation of their existing obligations” under the UNFCCC. They encourage other Parties to provide or continue to provide such support voluntarily. The G20 delegates also reaffirm their commitment to “rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption, over the medium term, recognizing the need to support the poor.” In this respect, they encourage all G20 countries to consider participation in the voluntary peer review of inefficient fossil fuel subsidy.
UN Environment Programme (UNEP) Executive Director Achim Steiner welcomed the G20’s focus on green finance, writing in an op-ed in the China Daily ahead of the meeting. He quotes UN estimates of US$5-7 trillion that will be needed annually to achieve the Sustainable Development Goals (SDGs), stressing that the bulk of this sum must come from banks and investors.
Steiner also praises the work of China’s Green Finance Task Force, co-convened by the People’s Bank of China and UNEP, which has developed 14 proposals for innovation in the fiscal, regulatory, judicial and institutional arenas for the greening of finance. The task force estimates that China will need up to US$600 billion worth of green investments a year, and that at least 85% of this will need to come from the private sector.
UNEP is acting as the secretariat of the G20 Green Finance Study Group, which is co-chaired by China and the UK. The Group will meet next on 22 March 2016, in London, UK, and will prepare a synthesis report on its findings for G20 finance ministers and central bank governors meeting taking place from 23-24 July 2016, in Chengdu, China.
In October 2015, a report by UNEP’s Inquiry into the Design of a Sustainable Financial System, ‘The Financial System We Need,’ highlighted innovative actions to align financial market developments with sustainable development outcomes, including actions taken by central banks and finance ministries, as well as stock exchanges, rating agencies and standards bodies.
The members of the G20 include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, the Russian Federation, Saudi Arabia, South Africa, Turkey, the UK and the US, as well as the EU, which is represented by the European Commission and the European Central Bank. [G20 Communiqué] [UNEP Press Release on Green Finance Study Group] [Op-ed by Achim Steiner] [UNEP Inquiry Website]