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Analysis

The G20 Rome Summit's Significant Performance

John Kirton,
Director, G20 Research Group, October 31, 2021

The G20's Rome Summit has produced a significant performance, relative to the 15 regular G20 summits in the past, given what appeared in the declaration released on October 31 and depending on what happens in the days and months ahead.

Economy

On the economy, G20 leaders produced a strong performance. They approved the revolutionary new tax regime with multinational corporations paying taxes to the governments of countries where they make their profits and a minimum tax of 15%. This made it more likely that all leaders could get their legislatures to make the necessary domestic legal changes, confident that they would not lose business as a result. It would help them raise the revenue they need to control their soaring deficits and invest in the greener digital economy they seek. It also responded to the growing anger about unfairness among their people, who have seen the COVID-19 pandemic make the digital multinationals even richer, while they continue to avoid taxes while poorer people could not. And it further prevented a protectionist trade war on the fastest growing economic sector, as several countries could now safely remove the unilateral digital taxes they have imposed in favour of the new global level playing field.

Leaders also agreed to channel some of the special drawing rights (SDRs) they have been allocated by the International Monetary Fund to the poor countries that need them the most. They stated: "We welcome the recent pledges worth around USD [45] billion, as a step towards a total global ambition of USD 100 billion of voluntary contributions for countries most in need." Justin Trudeau announced that Canada would channel $3.7 billion, or 20% of its newly allocated SDRs, to support low-income and other vulnerable countries, with approximately $982 million to be distributed to the Poverty Reduction and Growth Trust. A month before the summit, Emmanuel Macron pledged that France would donate 20% of its SDRs to poor countries in Africa, and that he would encourage the G20 to do so for a total of $100 billion.

Health

On health, leaders produced a significant performance. A major advance came on delivering doses, donations and domestic manufacturing support for vaccinating poor people in poor countries against COVID-19. Narendra Modi said that India was ready to produce five billion doses by the end of 2022 for the world.

Among the G7 members, Trudeau announced Canada would donate at least 200 million doses to the COVAX Facility by the end of 2022, including an immediate contribution of up to 10 million Moderna doses. He also announced an investment of up to $15 million to COVAX Manufacturing Task Force partners, to support creating a South Africa Technology Transfer Hub to develop and produce mRNA vaccines and technologies for Africa. He also confirmed Canada's support for a G20 commitment on pandemic preparedness, including through the establishment of the G20 Joint Finance-Health Task Force.

Boris Johnson announced that the United Kingdom would donate 20 million doses of the AstraZeneca coronavirus vaccine to developing countries. There have already been 10 million doses sent to the United Nations–backed COVAX vaccine-sharing program, and 10 million more would follow in the coming weeks. Macron said France would reach 120 million donated doses by mid 2022.

The Indian and Canadian pledges, with a due date of the end of 2022, were sufficiently large and realistic to ensure that the target of vaccinating 70% of the world's adults by then would be met. They were also enough to render more credible the G20's communiqué commitment "to help advance toward the global goals of vaccinating at least 40 percent of the population in all countries by the end of 2021 and 70 percent by mid-2022, as recommended by the World Health Organization (WHO)'s global vaccination strategy, we will take steps to help boost the supply of vaccines and essential medical products and inputs in developing countries and remove relevant supply and financing constraints."

On pandemic response, G20 leaders promised: "we will support science to shorten the cycle for the development of safe and effective vaccines, therapeutics and diagnostics from 300 to 100 days following the identification of such threats and work to make them widely available."

They also addressed the many other diseases where action has been diverted by the focus on COVID 19. On mental health they noted "the repercussions of the pandemic on mental health and well-being, due to isolation, unemployment, food insecurity, increased violence against women and girls and constrained access to education as well as health services, including sexual and reproductive health." They also addressed non-communicable disease, AIDS, tuberculosis and malaria.

Climate Change

On climate change, the world's only existential threat, G20 leaders facing a world on fire and flooding fast, took only baby steps to fight or flee from the dangers that all could see.

Their first specific advance was, as promised, to "put an end to the provision of international public finance for new unabated coal power generation abroad by the end of 2021." In doing so they broadened the scope to include all G20 members in addition to the G7 ones who made this commitment at their Cornwall Summit in June.

Their second specific advance was to strengthen carbon sinks, in long-proven, low-cost, jobs-rich ways. In paragraph 19 they stated: "Acknowledging the urgency of combating land degradation and creating new carbon sinks, we share the aspirational goal to collectively plant 1 trillion trees, focusing on the most degraded ecosystems in the planet, and urge other countries to join forces with the G20 to reach this global goal by 2030, including through climate projects, with the involvement of the private sector and civil society." More broadly, they finally gave serious attention to natural sinks as well as emissions sources, by devoting four paragraphs to the sinks as well as nine to sources.

However, they did very little else. Indeed, they started their treatment of climate change by saying that what they had done in at the United Nations summit in Paris six years ago was still good enough now, specifically "we remain committed to the Paris Agreement goal to hold the global average temperature increase well below 2°C and to pursue efforts to limit it to 1.5°C above pre-industrial levels." Physically, the climate has changed a great deal for the worse since 2015, but politically the G20's target did not change at all.

G20 leaders stated "we recall and reaffirm the commitment made by developed countries, to the goal of mobilizing jointly USD 100 billion per year by 2020 and annually through 2025 to address the needs of developing countries." But they did not acknowledge they were still about $20 billion short, nor did they provide the small sums to keep the promise first made in 2009. They merely said "that the goal is expected to be met no later than 2023."

Another promise from 2009 still not kept where no new action was promised was on fossil fuel subsidies. At Rome they said: "We will increase our efforts to implement the commitment made in 2009 in Pittsburgh to phase out and rationalize, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption and commit to achieve this objective." But they did not say by when or how.

Conclusion

G20 leaders can still do much more during the next two days at the UN climate summit in Glasgow, where many go as soon as they finish their work in Rome. They could comply with their Rome commitments much more strongly than ever before. And they could hold another summit in the spring, as they did in 2009 and in 2021.

But as the leaders gave their closing press conferences, Rome was on track to go down as a summit that performed at least as well as most of the 15 previous summits. It supplied a performance that was strong on the economy, significant on health and solid on climate change. Compared to current global needs, that was enough on the economy and health, but not even close on the existential threat of climate change.

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