By adopting the motto “Building a just world and a sustainable planet” as the theme of its presidency, Brazil will officially take on the role of the G20 leader in December 2023. This new government responsibility brings numerous opportunities for the country to leverage its global influence, aligning with the G20 agenda and collaborating with other member states to address pressing climate challenges.
The Intergovernmental Panel on Climate Change (IPCC) and the overall balance of the United Nations Framework Convention on Climate Change (UNFCCC) indicate that collective action to curb the climate crisis needs to be dramatically accelerated to ensure a habitable future on Earth. This theme is a key focus of negotiations at COP28 in Dubai. There is only a narrow opportunity to correct the situation, requiring leadership and political courage, as well as scalable solutions to be adopted and implemented.
The economic cost of inaction and climate impacts have been increasingly felt in recent years—only in 2022, it exceeded $445 billion, of which less than half was secured, resulting in economic losses of over $313 billion. Economic losses are compounded by losses of lives and social and development gains: the World Bank estimates that climate shocks could push 800,000 to 3 million Brazilians into extreme poverty by 2030.
On the other hand, the transition of economies to become carbon-neutral by 2030 is estimated to cost at least $4.3 trillion per year, with at least $1 trillion in emerging economies (excluding China). Meanwhile, emerging countries have received less than 27% of the necessary investments and financial flows to address climate change.
G20 countries account for approximately 70% of global greenhouse gas emissions and 80% of global GDP. Agreements made in this forum have significant potential to achieve the goals outlined in the Paris Agreement. Initially focusing on broad macroeconomic issues, the G20 has become the primary forum for international economic cooperation and has expanded its agenda over the years to include discussions on climate change, sustainable development, energy, and other major themes involving international cooperation.
This evolution has created opportunities to discuss climate change through various agendas in the two “tracks” of the G20. In the Sherpa Track, Working Groups on Environment, Climate, and Sustainability, Energy Transition, Agriculture, and Disasters provide spaces for advancing the G20’s Sustainable Development agenda, identifying how various group initiatives align with efforts to achieve the 2030 Agenda for Sustainable Development and commitments of the Paris Agreement on climate change.
In the Finance Track, discussions aim to reverse the impacts of international debt, which also affects global financial efforts to combat climate change and climate-related risks. In addition to producing a widely used foundation for climate-related financial disclosure reports, groups in this track also deal with recommendations related to development financing, debt vulnerability management, and promotion of local currency bond markets. The reform of multilateral development banks and the promotion of innovative instruments, such as nature/climate-based debt, are significant policy measures that must be implemented to enhance the capacity of low- and middle-income countries to attract international climate finance.
As the leader of the G20, Brazil has the opportunity to encourage working groups dealing with various aspects of climate change to achieve tangible advancements, policies that promote investments and ambitious initiatives, as well as reforms and new economic models resulting in the financial and technological innovations needed to reverse the growing costs of climate impacts and develop mechanisms of solidarity with the most vulnerable. This could mean a strategic legacy for the COP30 presidency in 2025 in Brazil.
Due to its vast geography, abundant natural resources, and installed institutional capacity, Brazil has a unique comparative advantage to be a protagonist and to propose and unlock climate and economic solutions that can offset global greenhouse gas emissions. Brazil is a provider of solutions. Prioritizing the climate agenda in the G20 is imperative for Brazil, particularly regarding economic opportunities, development, and the reduction of inequalities.
In this context, it becomes imperative to seek better focus, coherence, and coordination among different G20 working groups to: identify positive actions and initiatives that can be leveraged by all group countries, monitor and ensure progress made by the public and private sectors in relation to commitments related to climate transition investments, and prioritize a green economic trajectory with a positive impact on competitiveness and vulnerability reduction.
Real progress in commitments to leverage the green economy should also result in a framework to expand sustainable financing in developing countries and commitments to international cooperation and solidarity with the most vulnerable. Finally, G20 advancements in Brazil must have a clear vision of how they will result in a positive impact and implementation trajectory by 2025, during the presidency of the G20 in South Africa and COP30 in Brazil. A world in transition demands pragmatic, objective, and active leadership from the country and its society. The next two years should bring the future back to the political agenda of Brazilians and their democracy.
Originally published in Portuguese in Valor Economico newspaper