The latest insights from the We Mean Business coalition

G7: Go all in for clean energy to cut family bills, create jobs and drive economic growth

When the G7 leaders meet in the Bavarian Alps, on Sunday, I’m hoping they bring common sense. I hope they put themselves on the shoes of those dealing with unbearable inflation in their domestic bills or in their businesses.  I hope they bring the right solutions to address the challenges of our time: spiralling costs of energy, the climate emergency and energy insecurity.  

Germany, which holds the presidency of this year’s summit, faces an emergency with Russia turning off gas supplies. The German government is grappling with how to keep the lights, heat and air conditioning on for its people and the companies that serve and employ them. They need solutions that can be delivered immediately and keep costs down. 

That solution exists – a clean energy system. A report out this week proves that policies designed to scale up renewable power and phase out coal fired power would bring huge cost savings for households as well as millions of new jobs.  

Positive signs came out of the G7 climate and energy ministers’ meeting in May: commitments to end international fossil fuel financing and phase out coal on the pathway towards decarbonized power systems by 2035. G7 leaders must build on and strengthen these commitments. Emergency measures to meet short-term energy needs are essential, but they remain emergency measures and don’t require sacrificing the climate commitments made by these governments.  

It’s possible to simultaneously accelerate the scaling up of renewable energy, stop financing any new fossil fuel extraction or infrastructure and phase out coal.   

Business will be looking to the G7 Leaders this weekend to build on and strengthen the commitments made by their ministers in May. They must take home those commitments and translate them into clear and coherent policies. Without that, businesses simply won’t redirect their investments towards a clean energy future fast enough, at the scale required to bring industries along. G7 leaders should provide corporate leaders with certainty on the direction of travel, which means they should not be changing direction every few months.  

At the We Mean Business Coalition, we work with thousands of businesses and have seen a wave of support for the clean energy transition. These companies are publicly calling for bold policy changes, like phasing out coal by 2030, ending fossil fuel financing this year and decarbonizing power systems in the G7 by 2035.  

The good news – evidenced in Cutting Bills and Creating Jobs: the economic opportunities of a clean energy transition, a report published by the We Mean Business Coalition and Cambridge Econometrics this week – is that implementing these policies will bring huge economic and social benefits to people’s lives 

The report shows that rapidly implementing policies to end dependency on fossil fuels will save households significant sums of money. By 2030, households across G7 countries could be spending $500 less per person on electricity, natural gas and petrol. That represents a 25% saving on their average bills. In other words, a family-of-four will be saving almost $2,000 each year. At a time of rising inflation and domestic budgets under strain, this could represent a lifeline for many.  

Policies designed to accelerate the transition away from fossil fuels to net-zero will also create millions of new jobs around the world, including 15 million jobs in India within the next 3 years.  

As the benefits of accelerating clean energy faster become ever more self-evident, the risks of investing in new fossil fuel infrastructure become more dangerous. Even projects ready to break ground today would not be operational in time to plug any energy gaps within a useful timeframe. Instead, such investments will leave companies and economies with costly stranded assets in the years ahead. As Fatih Birol, Executive Director of the International Energy Agency, recently said, investing in new fossil fuel infrastructure will close any chance of meeting the internationally agreed goal to limit global warming to 1.5ºC. 

Instead of making such wasteful and polluting investments, governments and business must come together immediately to launch a drive for renewables on an unprecedented scale. This means cutting the timelines to grant new permits for renewables and seizing the opportunity to reskill millions of workers. Learning from the response to COVID-19, the public and private sector can deliver a transformation of the global energy system within months rather than decades, to plug any shortfalls in energy supply immediately with clean, secure and local renewables. By investing now, we can leave the era of fossil fuels and its geopolitical instability behind and accelerate the inevitable, which is our clean energy future.    

This meeting will likely be the most decisive international moment of the year. G7 heads of state have a very clear choice to make. Their choices will determine the economic and financial futures of billions of people for years to come.  

Will they embrace the clean energy solutions that will bring new jobs come to underserved communities? Or will they double down on volatile, polluting and increasingly expensive fossil fuels that will drive up inflation and see the price of basic goods continue to spiral?  

All eyes are now watching you, G7 leaders, in the mountains of Bavaria, expecting you to make the right choices.