By Thomas S. Benson
In May 2023, the leaders of G7 convened to discuss, among other things, their clean energy economy action plan. This plan includes initiatives to establish resilient global supply chains, promote clean energy technologies, promote trade and investment in clean energy goods and services, support for allies in their energy transition, reduce emissions through trade policy, and maximize the impact of incentives. Among this list of objectives, the G7 highlighted their continued intent to utilize the Partnership for Global Infrastructure and Investment (PGII) to “catalyze public and private finance towards quality climate and energy security investments.” But what was the intent behind PGII? And what does it offer?
PGII was first announced at the G7 Summit in 2021 and it was their flagship initiative. At the time, it was announced that the PGII would mobilize $600b by 2027 in global infrastructure developments, primarily for low- and middle-income countries and, in turn, support the economic and national security interests of the U.S. and its allies. Although the PGII presents competition—as intended—to China’s Belt and Road Initiative (BRI), it needs to do more to invest in domestic clean energy to enhance climate mitigation, adaptation, and resilience strategies that, in turn, bolster national security.
Climate security forms one of the four key pillars that define the PGII. According to the Biden administration, tackling the “climate crisis and bolstering global energy security” will be done by investing in the objectives outlined at the outset of this blogpost, in addition to climate resilient infrastructure, transformational energy technologies, low-emissions transportation, and the deployment of proven, innovative, and scalable technologies in places without existing access to clean energy. At the domestic level, the Inflation Reduction Act 2022 established a broad array of initiatives to meet these objectives.
One of the many projects that fall within the scope of PGII is the Omnivore Agritech and Climate Sustainability Fund 3, which the U.S. International Development Finance Corporation (DFC) is investing up to $30m in. This project is an impact venture capital fund that invests in entrepreneurs working to create “the future of agriculture, food systems, climate, and the rural economy in India.” Investments will be directed to companies that “increase food security” and “promote both climate resilience and adaptation” in India.
A broader effort to combat the direct attack on food security by Russia is a $4.5b investment from the G7, of which the U.S. planned to invest half. The war by Russia in Ukraine has led to global food supply chain issues, especially with wheat, but these issues were compounded by the global COVID-19 pandemic, and high prices for fuel and fertilizer.
In 2021, President Biden also announced that the U.S. will provide a further $2.76b investment to “help protect the world’s most vulnerable populations” against growing food insecurity and malnutrition. Therefore, much of the funds provided by the U.S. are and will be split across several different initiatives, some of which are focused on direct humanitarian intervention.
The same attitude of helping low- and middle-income countries continued in the Biden administration’s announcement following the G7 Summit in 2023, with the particular aim of helping them in their “clean energy aspirations” and in the “clean energy transition.”
As part of the PGII announcement in 2021, the U.S. stated it would “purchase resilient seeds, mitigate price shortages for fertilizer, scale-up social safety nets for families suffering from hunger and malnutrition, and avert food and humanitarian crises” for Ukraine, 24 countries in Africa, 10 countries in Asia, 6 countries in Latin America and the Caribbean, and 6 countries in the Middle East.
Other key initiatives included the expansion of the U.S. Agency for International Development’s (USAID) Feed the Future program try to end hunger and malnutrition for eight new countries (up from 12 to 20), and continued support for the Global Agriculture and Food Security Program (GAFSP).
Compared to the ambitious 2030 Nature Compact by the G7 in their 2021 Summit, the 2022 Summit was evidently dominated by concerns regarding global food supply chains and prices, as well as Russia’s war in Ukraine. In turn, a much-needed conversation about climate security—as was demonstrated by NATO’s Climate Change and Security Impact Assessment in 2022—did not take place and was a missed opportunity for the G7.
Instead, there was some backsliding with pressure from Japan encouraging the G7 to drop a commitment to make half of all vehicles zero-emission by 2030. Prior to the summit, there were also expectations for a ‘Climate Club’, but few details have been revealed, likely reflecting a lack of commitment. However, Australia is the newest member to join Climate Club in 2023 but it is too soon to observe whether this was have a positive effect on reducing global emissions.
For the U.S., continued investment in domestic infrastructure is needed to support the acceleration of a transition to a sustainable and resilient low-carbon economy that is climate secure. Through such investment, the U.S. can pave the way for its allies and accelerate progress toward achieving shared goals outlined in the 2030 Nature Compact, such as becoming net zero, and protecting biodiversity. It also means becoming a champion in the transition to clean energy, of which the crown is held securely by China.
China’s BRI was launched in 2013, and although it has not been without criticism, it invested $45b in energy in 2018. The Bipartisan Infrastructure Law (BIL) 2021 makes some headway toward this transition for the U.S. with a $65b investment in clean energy transmission and grid technology but this is dwarfed by China’s announcement five years ago that it expected to invest $360bn in domestic renewable energy by 2020. To ensure the U.S. and its allies achieve energy security, it is critical that the G7, including the U.S., accelerate this transition in an equitable and inclusive manner.