TEXT-G8 statement on action plan for climate change

1. Climate Change is one of the most urgent issues for the world to tackle. We, G8 Finance Ministers, recognize that the international community has been making considerable efforts, but that there is still much to do. Many reports, like the one released by the Intergovernmental Panel on Climate Change (IPCC), have warned us of the huge economic risks and adverse impacts from climate change and underscored the need for all countries to take concerted action to reduce greenhouse gas emissions significantly below current levels.

2. We are convinced that urgent and concerted action is needed and accept our responsibility to show leadership in tackling climate change. We are strengthening our efforts assisting developing countries in addressing climate change. We welcome and support the launch of the new multilateral funds to be established in collaboration with the multilateral development banks (MDBs).

3. Private sector engagement is essential in effectively addressing climate change including, most importantly, industries' investment in clean technology and R&D as well as improved energy efficiency. Focusing here on the role of private financial institutions, they are creating many innovative financial products and increasing numbers of financial institutions are employing environmental guidelines to mitigate environmental risks. The public sector has to encourage private sector engagement by ensuring stable and consistent legal and regulatory frameworks.

4. The MDBs, along with other international financial institutions, also have a major role in supporting developing countries to combat climate change, as mitigation and adaptation are indispensable parts of sustainable development. Their key activities include increasing needed investments and helping developing countries to integrate climate change into their overall development strategies.

5. Market mechanisms have the potential to deliver economic incentives to the private sector to take investment decisions that internalize environmental costs. We agree to continue active participation in discussions of market mechanisms. Promoting Investment for Climate Change.

6. Recognizing the UN climate process as the appropriate forum for the negotiations to reach an agreed outcome for the post-2012 period, we reaffirm our commitment to contribute to its successful conclusion, in which all major economies are effectively engaged, based on the Bali Action Plan. At the same time, we recognize the need for urgent actions to tackle climate change in the immediate short term. In order to ensure an effective and efficient response, we affirm our intention to coordinate and harmonize various financial facilities and initiatives, ensuring they are complementary to the key role of the Global Environment Facility (GEF).

7. We, G8 finance ministers, have been strengthening our activities addressing climate change. We are determined to further reinforce our bilateral efforts assisting developing countries.

8. We welcome and support the launch, to be made in collaboration with the MDBs, of new Climate Investment Funds, which will complement existing bilateral and multilateral efforts until a post-2012 financial framework under the UNFCCC is implemented. These funds include the Clean Technology Fund and the Strategic Climate Fund. Together these funds will scale up public and private finance for the deployment of clean technologies, the prevention of deforestation and development of climate resilient economies in developing countries.

9. Because of the overriding need to spur private investment in clean energy technologies, the public sector has to establish and maintain stable and transparent legal and regulatory frameworks. The post-2012 international framework and domestic regulations will be of critical importance, to this end.

10. We agree to promote deployment of clean technologies through WTO negotiations on the reduction or elimination of trade barriers for key environmental goods and services.

11. At Gleneagles, we asked the World Bank and other MDBs to strengthen their activities for climate change, through the Clean Energy Investment Framework. We welcome the joint MDBs' report on climate change, which describes their achievements so far and outlines their future plans to significantly increase investments for mitigation, adaptation, and clean energy access, setting stretching and measurable targets to track progress. We urge the MDBs to build their capacity for climate change, to strengthen their partnerships and also to integrate climate change into their development activities, while maintaining their focus on sustainable development and poverty reduction.

Climate-friendly Development Strategies in Developing Countries

12. Developing countries will both influence the scale of climate change and be affected by it. By 2030 global energy demand will be 55 percent higher than it is now, and nearly three-quarters of this rise will take place in developing countries, according to the International Energy Agency's (IEA) estimates. At the same time, the poorest countries tend to have the least resilience to climatic variability and change.

13. It is crucial for developing countries to integrate climate change in their overall development strategies. They should incorporate climate considerations into energy sector reform and undertake other climate-related policy actions, transforming them into low-carbon economies. We encourage the MDBs, in coordination with other actors in this area, via knowledge sharing and policy dialogues, to help developing countries with this task, including by assisting capacity building, especially in the poorest countries. We, as bilateral donors, commit to follow the same strategies and to actively engage in coordination with the MDBs and other bilateral donors.