G20 Finance Ministers and Central Bank Governors Meeting High-Level Breakfast Discussion on Climate Mitigation

Nusa Dua, 16 July 2022 – Indonesia’s Ministry of Finance and the Governor of the Central Bank of Indonesia have recently held a High-Level Breakfast Discussion on Climate Mitigation—as a part of The Third Series of G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting Activities, 11-17 July 2022 in Bali. This meeting was conducted in a hybrid format and attended by all G20 members, as well as international organizations, such as International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD) and Intergovernmental Panel on Climate Change (IPCC).

The High-Level Breakfast Discussion on Climate Mitigation is built on the technical discussion that takes place in the Policy Levers Forum convened by the Indonesian G20 Presidency at the margins of the Sustainable Finance Working Group meeting on 13 June 2022. The discussion allowed Ministers and Governors to share best practices, national experiences, and an overview of international efforts to address climate change.

Minister Sri Mulyani opened the Discussion by sharing the key takeaways from the Sustainable Finance Working Group Policy Levers Forum of 13 June, 2022. She pointed out to policy directions to foster the transition towards sustainable investments and to disincentivize the reliance on high-emitting activities. The OECD presented the main takeaways of its ongoing research on climate mitigation, including the macroeconomic, environmental, and fiscal effects of the coordination mechanism. They were joined by representatives from the International Panel on Climate Change (IPCC) and the International Monetary Fund (IMF).

Additionally, a high-level exchange of national experiences allowed participants to present their ongoing/planned policies to address climate change and preserve financial stability and economic growth in the long-term. In particular, the exchanges focused on climate-related policy levers -including the design of tailored policy mixes and energy transition mechanisms (e.g., Just Transition Partnerships) to promote an inclusive green economy transition. For instance, the G20 Sustainable Finance Roadmap endorsed by G20 Leaders in October 2021 highlights the role of public policy levers to provide better market signals, steer sustainable investment decisions and incentivize the participation of public and private capital in sustainable investments.

Levers of a just transition that enhances climate mitigation can be mechanisms to support the provision of clean energy, schemes to rationalize and phase out inefficient subsidies for fossil fuels that encourage wasteful consumption or the use of carbon pricing to reduce greenhouse gas emissions (GHG). To achieve carbon neutrality by or around mid-century and implement the Paris Agreement, policy-makers can also resort to regulatory approaches that better catalyse market commitments towards carbon emissions reduction. This goes along the achievement of the 2030 Agenda, with targeted support for the poorest and the most vulnerable, in accordance to each country’s circumstances.

The discussions of the High-level Breakfast Discussion on Climate Mitigation shall nurture future G20 discussions on international climate action, in particular strengthen synergies with global initiatives such as the Coalition of Finance Ministers for Climate Action or the Climate Club.

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