11/04/2011 11:09 am ET Updated Jan 04, 2012

Why Greece's Debt Shouldn't Be the G20's Biggest Economic Issue

As the G20 leaders meet in Cannes, the entire meeting is being consumed by the current debt crisis in Europe and its potential impact on the global economy.

On one level, that is completely understandable. The world's economy is precariously balanced and without confident, decisive action could tip back into another major global downturn. It's a critical issue and one that must be resolved. Especially after defeat was almost snatched from the jaws of victory by Greece's decision to hold a referendum which has fortunately now been reversed.

However, there is another subject that the G20 has a unique opportunity to take action on. And one that is every bit as critical. In the midst of all of the economic and financial uncertainty, it's easy to forget the looming issue of climate change. Yet if we do not act and find a solution, issues such as the size of Greece's debt may unfortunately be somewhat academic. The phrase 'rearranging deckchairs on the Titanic' springs to mind.

Climate is an economic issue. Both in its threat and in its potential opportunity. And while history will probably forget the current Greek debt crisis, it will not forget the consequences of action, or to be more pessimistic inaction, on climate. As the quote on the wall of Patagonia's head office says: "There is no business to be done on a dead planet."

President Sarkozy has stated that he wishes to lead the G20 in addressing global problems with "action and ambition" -- this can and should include action on mitigating the effects of Climate Change. Alongside resolving the world's debt crisis, establishing a new framework for consultation on a financial transaction tax and exchange rate developments, the G20 should be stating clear, specific commitments by member states as to how they will deliver on the recent Cancun agreement within their own legislative programs, as well as acting in concert, and thereby delivering economic growth and jobs through the green economy.

While taking action on climate change has been somewhat of a political hot potato in recent years -- given both its complexity and low perceived chance of success many politicians have sought to steer well clear of the subject -- it could actually, almost counter-intuitively, be the one subject the G20 leaders could agree on. The opposition from member states regarding financial transaction taxes and exchange rate reform make the chances of agreement on those issues limited -- the White House has already this week expressed its skepticism about Sarkozy and Merkel's plan on taxing financial market transactions, and it is highly unlikely that the US and China will resolve their very public differences on exchange rate -- thus realistic practical proposals regarding action on Climate Change have a very real chance of being adopted and therein delivering a major tangible success to the Summit. Which may interest those leaders who have a rather important date with the polls next year.

In order for Cannes to deliver concrete action on climate, any solution needs to achieve the following:

Firstly, it needs to be practical and have a realistic chance of being adopted. It must be within relatively easy reach of each member of the G20 and be something they are already looking at. It must also be something on which they can legislate quickly. What is key is that it is a starting point, not an end point.

Secondly, it needs to diffuse the political standoff between the developed and developing world and the tensions between China and America -- already exacerbated by the currency debate. The Chinese government is paying the highest financial price of all the G20 members for the negative effects of carbon emissions, but they need to keep their economy growing and they need a realistic starting point for world action on climate change that they can adopt. Their investments in Green Energy show how committed they are to acting -- just not on someone else's terms.

The following two simple proposals address these criteria and could and should be adopted by the G20 leaders in Cannes.

Proposal 1: PEY18

In order to ensure that the negative effects of carbon emission begin to come under control, the G20 member states should resolve to set 2018 as the year in which these emissions will peak; emissions will fall after 2018, Peak Emission Year, as a result of the legislative action agreed by the G20 member states. If it should be that a G20 member will not accept 2018 then they must state and commit to their own national peak emissions year.

Peak Emission Year (PEY) will give the Chinese government something they can sign up to without losing face and without being seen to 'blink first' in a standoff with US interests. It allows for a global agreement but with everyone acting on their own terms. And China can be seen to 'lead' as opposed to bending to the will of developed economies.

Proposal 2: FFS18

The G20 members will agree to abolish Fossil Fuel Subsidies by 2018.

The G20 has already made a commitment to establish a plan to end fossil fuel subsidies. They can and should demonstrate that they are accountable to that commitment. A report by the International Energy Agency (IEA), Organization of Petroleum Exporting Countries (OPEC), Organization for Economic Cooperation and Development (OECD), and World Bank estimated that fossil fuel consumption subsidies cost the global economy $557 billion in 2008, and unless eliminated can be expected to impose similar costs in the future -- that can finance a lot of Greek debt! There is even political momentum on this issue, with the US in particular wanting to pursue an end to FFS.

These two proposals are broadly in line with the publicly-stated views of the majority of G20 government environment ministers. They have been developed with the informal input of the governments or environment ministries of many of the G20 countries, and after consultation with Climate experts, Business leaders, the Global Climate Change Alliance and the Global Sustainability 50 Committee of 50 of the world's largest companies.

More importantly, they are credible, tangible and achievable.

As President Sarkozy said in his August 20, 2010 speech to the 18th UN Ambassadors Conference: "Shouldn't the G20 be discussing the financing of a climate agreement? At a time when the fight against climate change is at a standstill."

Yes, I think it should.

PEY18/FFS18 is one of the nine proposals that were developed for the French government, this year's G20 Chair, by the 'G20 Paris Initiative Task Force' of the World Economic Forum's Young Global Leaders community including David Aikman, Fabrice Seiman,Thomas Buberl, Alfredo Capote, Kevin Lu, Erwann Michel-Kerjan, Jill Janaina Otto, Anthony Stevens and David Jones.

About the Author:
David Jones is the Global CEO of Havas and co-founder of One Young World. In advance of the United Nations' Copenhagen Climate Summit, David led Kofi Annan's TckTckTck campaign, recruiting 18 million "climate allies." He also led the advertising agency team working with David Cameron and the UK Conservative Party team from 2007 to the successful election in 2010.

The opinions are the author's own.