U.S. Reluctantly Agrees to Add Climate Change to G20 Communiqué
U.S. Secretary of the Treasure Steven Mnuchin arrives for a welcome dinner at the Murabba Palace in Riyadh, Saudi Arabia on Feb. 22, 2020 during the G20 finance ministers and central bank governors meeting. FAYEZ NURELDINE / AFP via Getty Images
Finance ministers from the 20 largest economies agreed to add a scant mention of the climate crisis in its final communiqué in Riyadh, Saudi Arabia on Sunday, but they stopped short of calling it a major economic risk, as Reuters reported. It was the first time the G20 has mentioned the climate crisis in its final communiqué since Donald Trump became president in 2017.
Finance ministers and central bankers were meeting to discuss global economic challenges over the weekend, focusing on growth, impediments to growth and ways to tax global digital companies.
The U.S. was reluctant to accept language that would pinpoint the climate crisis as an impediment to economic growth.
“Usually China blocks as well, but as they are represented at lower level it’s mainly the U.S.,” one G20 diplomat said to Reuters.
“Climate is the last sticking point in the communiqué. There is still no agreement,” a second source familiar with the negotiations told Reuters.
In the end, the U.S. bowed to pressure from European finance ministers who pressured the U.S. to acknowledge the climate crisis. The New York Times noted that the inclusion of “climate change” on the third page of the document at the bottom of a long list of potential risks was a subtle, but notable acknowledgement by the U.S. that there are risks involved in a changing climate.
The communiqué says that the “financial stability implications of climate change” were being monitored by the G20’s Financial Stability Board, according to The New York Times.
The French Finance Minister Bruno Le Maire held a long discussion on Saturday night with U.S. Treasury Secretary Steve Mnuchin about the language around the climate crisis. While Le Maire had hoped for more extensive language, he acknowledged that simply getting a mention of climate change signaled progress. After all, the Trump administration has not accepted established science that humans are causing a climate crisis, having aggressively rolled back environmental regulations for the past three years to provide a boon to industry, as The New York Times reported.
At last June’s G20 summit, Trump dismissed the need to take action against the climate crisis, offering a bizarre rant about how wind power does not work without massive subsidies, and how other countries’ investments in clean energy means they are missing out on a lot of power, as The Independent reported.
After the communiqué was finalized, Mnuchin bristled at the idea that he caved to the pressure from his European counterparts. He also trivialized the language, calling it a “purely factual” description of the work done by the Financial Service Board, as Reuters reported.
“I did not bend to pressure from the Europeans,” Mnuchin told reporters, as Reuters reported.
The compromised language came after Washington refused to add “macroeconomic risk related to environmental stability” to a list of downside risks to global growth, two G20 diplomatic sources told Reuters.
“I think he clearly understands that even if we do not share the exactly the same assessment on climate change, there is a need to address the issue within the G7 and within the G20,” Le Maire said of Mnuchin, as The New York Times reported. “I think that we have a totally different perspective on the risk of climate change — for us, this is clearly one of the major risks. This is a financial risk.”
The U.S. Treasury’s continued silence on the climate crisis is at odds with the investment community, which is raising the alarm of the climate crisis, and is drawing criticism. Last week, economists at JP Morgan Chase warned that the climate crisis might alter life as we know it.
“Here you are, you’re the most important economy in the world still. All of your peers are working together to figure out how to use the instruments of fiscal monetary policy in order to manage a smooth energy transition, and you’re not in the room,” said Rachel Kyte, the dean of the Fletcher School at Tufts University and a former climate change envoy for the World Bank, as The New York Times reported.