Dr. Arvind Kumar*
Group of Twenty or G20 is an intergovernmental forum comprising 19 countries and the European Union that aims at improving international economic status by coordinating important global financial institutions like IMF, World Bank and the World Trade Organization (WTO). G20 members, inter alia, include: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.Established on 26th September 1999,the G20 is accountable for planning strategies to tackle global issues like the economy, financial stability, climate change mitigation and sustainable development. The G20 member countries meet annually to discuss the critical issues facing the global economy.
A two-day summit meeting of the G20 member countries was hosted by Italy at its capital, Rome, on 30-31 October 2021 and it was the first in-person meeting after two years with the overreaching theme encompassing three pillars – people, planet and prosperity – and that was reflected in the full agenda of the meeting that comprised climate change, the COVID-19 pandemic, taxation and global economic issues.
The Rome summit of G20 mainly focused on major issues like climate change, COVID-19 vaccines, taxation, global economy and development aid.
Climate Change
While committing to the key Paris Agreement goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, the summit leaders pledged action against dirty coal plants. The final communique of the G20 reiterated that keeping 1.50 C would require meaningful and effective actions and commitment by all countries, taking into consideration different approaches. It also articulated the pledge of G20 member countries to reach a target of net zero carbon emissions “by or around mid-century” instead of setting a clear 2050 date, as many climate campaigners and experts were hoping for. Articulating the agreement of the G20 member countries to stop funding new dirty coal plants abroad by the end of 2021, the final communique also reaffirmed the so far unmet commitment of mobilizing $100 billion for developing countries for climate adaptation costs.
The final communique also demonstrated that it was for the first time that G20 member countries acknowledged the use of carbon pricing mechanism and incentives as a possible tool against climate change, just as the IMF has been calling on the most polluting countries to follow the path by setting a minimum carbon price. While reflecting the pledge of the G20 leaders to work collectively to ensure a successful COP26 scheduled to commence from the day the G20 summit concludes, the final communique reaffirmed commitment of the G20 leaders to the full and effective implementation of the Paris Agreement. It also reaffirmed the commitment to taking further action during this decade and to framing, implementing, adapting, where necessary enhancing 2030 nationally determined contributions (NDCs).
Other commitments by G20 leaders to address aspects of climate change are as follow:
- Strengthening actions to halt and reverse biodiversity loss by 2030;
- Ensuring at least 30% of global land and at least 30 % of the global ocean and seas are conserved or protected by 2030; and
- Calling upon other countries to join forces with G20 to reach the aspirational goal of planting one trillion treesby 2030, with the involvement of the private sector and civil society.
Taxation
A seal of approval was affixed by G20 leaders on an agreement that would subject multinational corporations to a minimum 15% tax as part of an endeavour to build a strong, stable and fairer international tax system. The particular targets of this new global tax regulation are American Internet giants like Amazon, Google parent Alphabet, Facebook, now rechristened as Metaverse, and Apple Inc., that have benefited from basing their offices in low-tax countries to minimize their tax bills. As per media reports, these reforms were reportedly brokered by the Organization for Economic Cooperation and Development (OECD) and supported by 136 countries that accounted for more than 90% of the global GDP, and this reform that has been in the offing is likely to come into force in 2023. Nevertheless, some observers feel that it may miss the deadline. Each country participating in this worldwide agreement is called upon to enact national legislation in this regard, and as per media reports, American President Joe Biden is among those facing domestic opposition to this reform.
COVID-19
In the wake of the worldwide havoc wreaked by the COVID-19 pandemic, G20 leaders reaffirmed their determination to support the WHO’s goal of vaccinating at least 40% of the global population against COVID-19 by the close of 2021, and 70% by the middle of 2022 along with taking measures to boost the supply of vaccines in developing countries and doing away with supply and fiscal hindrances. The joint communique also envisaged the promise of G20 leaders to work together towards the recognition of COVID-19 vaccines deemed safe and effective by the WHO. Other measures with regard to COVID-19 and global health related issues as envisaged in the joint communique, inter alia, included:
- Ensuring swift and equitable vaccine distribution worldwide;
- Reaffirming commitment to the Rome Declaration, adopted at the Global Health Summit in May 2021, as a “compass for collective action.”
- Establishment of a G20 Joint Finance-Health Task Force for providing adequate, sustainable and better coordinated financing; and
- Moving towards an international treaty on pandemics.
Global Economic Issues
The Rome G20 Summit 2021 took place at a time when the world was dealing with the problem of rising inflation exacerbated by spike in energy prices, and supply chain bottlenecks exerting pressure on global economy that is still struggling hard to recover from COVID-19 related disruptions, and in the wake of these and other related developments, the G20 leaders affirmed to take following measures, as envisaged in the joint communique:
- No hasty removal of national stimulus measures;
- Continue to sustain the recovery, avoiding any premature withdrawal of support measures; and
- To remain vigilant to the global challenges impacting economies, such as disruption in supply chains.
Development Aid
A new target of channelizing $100 billion towards the poorest countries was set by G20 leaders, and this was to come from a corpus fund of $650 billion made available by International Monetary Fund (IMF) through a recent issuance of its Special Drawing Rights (SDRs), which is not a currency; however, these SDRs can be utilized by developing countries either as a reserve currency that stabilizes the value of their domestic currency or can be converted into stronger currencies to finance their development projects.
India at G20
India was represented at the 2021 Rome G20 Summit by Prime Minister Narendra Modi.While addressing the G20 Leaders’ Summit in Rome on October 30,PM Modi conveyed that India is ready to produce 5 billion Covid-19 vaccine doses by 2022 end which will be available for the world. PM Modi invited G20 countries to make India their partner in economic recovery and supply chain diversification.
While briefing media persons on October 30, India’s foreign secretary Harsh Vardhan Shringla said that India’s Prime Minister highlighted India’s contribution to the fight against COVID-19 pandemic and also mentioned India’s medical supplies to over 150 countries as he spoke about the country’s vision of ‘One Earth, One Health’ for a collaborative approach in combating the pandemic. PM Modi also brought out the fact that despite challenges of the pandemic, India continued to be a trusted partner in the context of reliable supply chains.
War Forward
There have been mixed reactions to the outcomes of 2021 Rome G20 Summit. Some analysts are critical of G20 stance on climate change. They point out that the G20 final communique lacked firm pledges and failed to put an end date on the actual use of coal. Besides, it is argued that G20 did not make any commitments to introduce any improvements in on issues like climate finance, paving the way for difficult negotiations to be held at the COP26 being held at Glasgow, UK. Some critics have appreciated the G20 acknowledgement that G20 members’ emission reduction plans, known as NDCs, were required to be firmed up over the ongoing decade to bring them on track for net zero by 2050. One critic observed: “If the G20 was a dress rehearsal for COP26, then world leaders fluffed their lines.” Another analyst has lamented that the Rome Summit was unable to massively accelerate COVID-19 vaccine distribution or engender a critical acceleration to tackle the climate emergency and mark the end of coal. While hailing the G20 as a consensus-based multilateral process that can only deliver incremental progress over time, another critic has opined that from that standard, the Rome Summit had a positive impact because it succeeded in generating norms, regulations and goals that facilitate global cooperation and reduce tensions.
*Editor, Focus Global Reporter
