Issue Brief

Decarbonising G20 Economies: Pathways to Net-Zero in High-Emission Nations

Introduction

The G20 nations, representing over 80% of global GDP and about 75% of global greenhouse gas (GHG) emissions, are at the heart of the global decarbonisation challenge. As the world grapples with intensifying climate impacts and narrowing carbon budgets, the actions of the G20 economies will determine whether global climate targets, including the Paris Agreement’s goal to limit warming to 1.5°C, can be achieved. Decarbonising these high-emission nations is no longer just an environmental imperative; it is an economic, geopolitical, and human survival challenge¹. Not only does decarbonisation addresses climate challenges, but also aids in job creation, energy security, innovation-driven growth, and improved public health.

To avert the catastrophic effects of climate change, it is essential for global emissions to reach net-zero by 2050. For G20 countries, many of which are among the highest emitters per capita, this means a fundamental transformation of energy systems, industrial processes, transportation, and land use.

As of 2024, 19 out of 20 G20 members have announced net-zero targets, with varying deadlines ranging from 2050 to 2070². While this signals a positive shift in political will, the credibility of these commitments’ hinges on the implementation of robust, measurable, and transparent pathways.

Key sectors for Decarbonisation

The need for decarbonisation is prevalent in a few key sectors, including energy, transport, industry, infrastructure and agriculture.

The energy sector is the largest contributor to GHG emissions across G20 countries. Transitioning from fossil fuels to renewable energy sources such as wind, solar, hydro, and green hydrogen is imperative. Nations like the EU, Canada, and the UK have made significant strides in phasing out coal and investing in clean energy infrastructure. However, large emitters within the G20 must balance energy security with climate goals, requiring scalable and affordable clean technologies.

In the transport sector, electrification of public and private transport is a cornerstone of decarbonisation. Countries like Germany, Japan, and South Korea are investing in electric vehicle (EV) infrastructure and incentivising clean mobility. Biofuels and hydrogen fuel cells also hold promise for aviation and heavy-duty transport.

Sectors like infrastructure, must innovate through carbon capture, utilisation and storage (CCUS), green hydrogen, and circular economy practices. To achieve this, public-private partnerships and research funding would be key enablers. Improving energy efficiency in residential and commercial buildings, adopting smart technologies, and using sustainable construction materials can reduce the carbon footprint significantly.

Policy Instruments and Financing

Policy frameworks must align national development goals with climate targets. This includes carbon pricing mechanisms, emissions trading systems, and regulatory mandates for clean technology adoption

Financing the net-zero transition will require an estimated USD 4-6 trillion annually through 2050.³ G20 nations must mobilise private capital through blended finance, green bonds, and risk-sharing mechanisms. Development banks and climate funds can de-risk sustainable investments in developing economies.

Effective sector-specific policies are crucial to creating a level playing field between low-carbon and conventional technologies. A range of policy instruments can be employed to encourage early adoption of low-carbon solutions, lower investment risks and the cost of capital, discourage carbon-intensive practices, and stimulate demand for green products⁴.

The Role of Innovation and Technology

Technological innovation acts as the linchpin of decarbonisation. Breakthroughs in battery storage, AI for grid optimisation, carbon-negative materials, and alternative fuels are rapidly emerging. G20 nations should collaborate on research, share intellectual property through multilateral platforms, and scale pilot projects through international cooperation.

Digitalisation, in particular, offers powerful tools for energy efficiency, emissions monitoring, and behavioural change. Smart cities, IoT-enabled grids, and blockchain-based carbon tracking can enhance transparency and accountability.

Just Transition and Inclusivity

Transitioning to net-zero must be socially just and economically inclusive. This involves retraining workers from carbon-intensive sectors, supporting MSMEs in adopting green practices, and ensuring access to affordable clean energy for all.

Countries like South Africa and Indonesia are already working with multilateral partners on Just Energy Transition Partnerships (JETPs) that combine climate finance with job creation and community development. These models can be replicated and scaled.

The G20’s Role in Global Leadership

As stewards of global economic stability, the G20 must lead by example. India’s G20 presidency in 2023 emphasized "One Earth, One Family, One Future," signalling the importance of planetary well-being. Going forward, the G20 can:

• • Establish common frameworks for carbon pricing and reporting
• • Enhance technology transfer to developing countries
• • Standardise green finance taxonomies
• • Support global climate adaptation and resilience programs
• • Mobilise public and private green finance.
• • De-risk climate investments in developing countries.
• • Establish green sovereign bonds and blended finance mechanisms.
• • Ensure climate-aligned budgets and fiscal responsibility.
• • Align national policies with net-zero targets.
• • Establish independent climate councils for accountability.
• • Involve sub-national actors and cities.
• • Encourage climate education and public participation.

Conclusion

Decarbonising the G20 economies is not merely a climate imperative; it is an economic and moral necessity. The transition to net-zero presents a historic opportunity to build a more sustainable, equitable, and prosperous future. With strategic vision, collaborative action, and unwavering commitment, G20 nations can chart the path toward a liveable planet for generations to come.

As stewards of the global economy and major emitters, the G20 has a historic responsibility and opportunity. Pathways to net-zero are available, economically viable, and increasingly popular with the public and private sectors.

What is now required is political will, global cooperation, and long-term vision. The future of our planet hinges on how G20 nations choose to act today.

Yes, the road to net-zero is not without its challenges, but it is possible, profitable, and profoundly necessary. Let the G20 be remembered not only for economic leadership but also for environmental stewardship.

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