G7 performance on energy

The climate-energy nexus has emerged as a dominant global theme, with energy issues at crisis proportions – making G7 commitments in this area more essential than ever

Before Germany assumed the G7’s presidency on 1 January 2022, Chancellor Olaf Scholz made it clear that the climate crisis, with energy issues at its core, was central as he prepared to host the G7 summit on 26–28 June at Schloss Elmau in the Bavarian Alps. At the core of Germany’s energy policy was the proposal for a ‘climate club’, aimed at driving an ambitious global energy transition grounded in climate neutrality and ensuring a just transition.

The climate–energy nexus has emerged as a dominant global theme over the past year, as the dramatic convergence of international events elevated energy issues to crisis proportions, generating the first ‘great shock’ of the global energy transition. Prices and demand soared due partly to a rapid economic recovery following the first full year of COVID-19 lockdowns and related supply chain issues causing outages and blackouts, compounded by severe weather events around the globe. Russia’s invasion of Ukraine exacerbated these issues.

The resulting energy crisis is a stark reminder that modern life requires abundant energy – and that the world is unprepared for severe volatility in energy prices. What can the G7 leaders at Elmau do to respond?

Conclusions

From 1975 to February 2022, the G7 dedicated an average of 833 words (8%) per summit of its communiqués to energy. During the summit’s first two hosting rotations, from 1975 to 1989, 13 summits referenced energy directly, with only the 1985 Bonn and 1988 Toronto summits failing to address energy policy substantively.

During the G7’s next two rotations, from 1990 to 2004, a high of 641 words (6%) came at the 1999 Cologne Summit and a low of 43 words (0.4%) came at Kananaskis in 2002.

Between 2005 and 2014, energy conclusions peaked, averaging 2,315 words (15%). The high came at 2009 L’Aquila with 6,333 words (38%) and the low at 2005 Gleneagles with 567 words (3%).

From 2015 to 2020 there were fewer energy conclusions. They peaked at 2015 Elmau with 1,688 words (13%) and plunged at 2018 Charlevoix to 409 words (4%). Energy policy was not mentioned at the G7’s first virtual summit on 16 March 2020, under the US presidency. But in February 2021 they reached 231 words (29%), rising to 864 words at 2021 Cornwall (4%) and levelling off at 289 words (17%) at the February 2022 virtual summit under Germany’s presidency.

Commitments

Since 1975, G7 summits have made 479 energy commitments. Only development and health issues have had more. In 1975, 20% of the commitments were on energy.

From 1976 to 1983, leaders made 113 energy commitments, with 43 (78%) coming during the height of the second oil crisis in Tokyo 1979. Attention fell between 1984 and 1996, with only three (5%) energy commitments at London in 1991.

From 1997 to 2005 there was an uptick to 57 (26%) energy commitments at Gleneagles in 2005. When Russia hosted its first and only G8 summit in 2006, an all-time high of 78 (24%) was reached.

Since then, energy commitments have varied, with 41 (12%) from 2007 Heiligendamm and none from 2013 Lough Erne and 2019 Biarritz. In 2022, the February virtual summit made two (4%), the Brussels Summit in March made five (18%) and the May virtual summit made three (11%).

Compliance

Compliance with the 23 assessed commitments averaged 82%, surpassing the 76% average across all subjects. The highest compliance came in 2001 and 2018, each with 100%. Russia’s 2006 summit had 89%. By February 2022, compliance with the two energy commitments from Cornwall in June 2021 was very high at 91%.

Compliance was led by the European Union at 93%, the United States at 91% and the United Kingdom at 89%. Germany followed with 84%, then Canada at 82%. Below average were France at 80%, Japan at 78% and Italy at 72%.

Causes and corrections

Several corrections can improve compliance with Elmau’s energy commitments.

Commitments that use highly binding language, refer to energy ministers meetings and mention official-level energy bodies generate 100% compliance. References to the private sector average 95%, a defined timetable 94% and regulatory frameworks 89%. Commitments related to energy systems aimed at driving sustainable economic growth also have among the highest scores.

Lower compliance comes from commitments using low-binding language at 61% and references to voluntary reporting mechanisms at 56%. Commitments on universal access to cleaner, safer and more affordable energy also generated low compliance.

As the war in Ukraine escalates, European – and particularly German – reliance on Russian gas means G7 leaders need to continue collectively agreeing on highly binding commitments that further engage their energy ministers and set defined timetables for action. This will facilitate preventing further disruptions that destabilise the world’s energy supply.