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Analysis

G20: Great Successes, Greater Challenges

John Kirton, Director, G20 Research Group, November 16, 2023

Prepared for presentation at "The G20 in a Time of Geopolitical Upheaval," online policy roundtable, jointly organized with the European Parliamentary Research Service and the European Union in ASEAN, November 15, 2023.

Introduction

Since its start in 1999, the G20 systemically significant states has produced great success in governing the global financial system, economy and much else. But it now faces much greater demands for global governance, that it is struggling and failing to meet.

The G20 was designed and created by the finance ministers of the United States and Canada in 1999, in response to the Asian-turned-global financial crisis unfolding then. Its carefully chosen members were the "systemically significant" states – those that contained the major capability and the international connectivity that together let them both create a global financial crisis from their domestic failures and cure it when it arose elsewhere.

The G20 began with two distinctive missions: to preserve and promote financial stability and to make globalization work for the benefit of all.

Since its start among finance ministers and central bank governors, and then leaders to control the bigger, broader, faster American-turned-global financial crisis in 2008, it has successfully produced financial stability, but has failed to make globalization work for all.

Fostering Financial Stability

G20 finance ministers and central bank governors failed to foresee or forestall the American-turned-global financial crisis that exploded on September 15, 2008. But its leaders quickly contained the crisis at their first four summits.

They then prevented the escalating regional European financial crisis from going global, at their subsequent summits from November 2010 to June 2012.

Since then they have prevented any global or even regional crises from arising.

They have done so amidst unprecedented geopolitical upheavals, led by the first inter-state war in Europe since 1945 when Russia invaded Ukraine on February 24, 2022, and now the Hamas terrorist attack on Israel on October 7, 2023. But they must still remain vigilant about new financial crises potentially coming from the plunging property market in China, and the soaring deficits and debts in the United States.

Failing to Make Globalization Work for All

On its second mission of making globalization work for all, the G20 got off to a good start, but then faltered and has now clearly failed.

At the Seoul Summit in November 2010, the G20 pivoted to focus on its second mission. It launched the Seoul Development Consensus, with a new emphasis on sustainable development and green growth. It helped the world in reaching almost all of the eight Millennium Development Goals by 2015. It led in launching the broader, fully inclusive 17 Sustainable Development Goals and making a strong start to deliver them by their due date in 2030.

But then from China came the devastating Covid-19 pandemic in late 2019. The G20 again pivoted to focus on containing it. At its Rome Summit in 2021, and a special one devoted to health that year, the G20 helped to control the Covid-19 crisis by 2022.

But this came at the cost of progress on all the SDGs, with none now on track to meet their targets by 2030.

Greater Challenges Now

But much greater challenges have come from other fronts. The first was a classic security threat, from Russia's aggression in Ukraine in 2022. The G20 succeeded at its Bali Summit in November 2022 in producing a full consensus communiqué, in which all members – including Russia – agreed that the United Nations had certified that Russia had committed "aggression" against Ukraine. However, at the New Delhi Summit in September 2023, the word "aggression" disappeared, even though Russia's invasion had not.

Second is the growing second threat of climate change – an unprecedented, non-state security threat to the existence of all life on the planet. It is certain to get even worse, as no climate "ceasefire" to stop it or return to the status quo is in sight.

Since its start the G20 summit has increasingly made commitments on climate change. But its members have complied with them at an average of only 72%.

G20 summits have made 152 commitments on climate change since their first on the issue at London in April 2009 (see Appendix A). But the number peaked at 22 at Hamburg in 2017, followed by a plunge and then a rebound to 21 at Rome in 2021. It has stalled with 18 in Bali in 2022 and 19 in New Delhi in 2023.

Moreover, G20 members have complied with their 52 climate commitments at an average of only 69% (when calculated per individual commitment).

Moreover, their commitments have largely supported the Conferences of the Parties to the UN Framework Convention on Climate Change, which, beyond the Covid-19 recession, have increasingly failed to reduce emissions, greenhouse gas concentrations or the global temperature rise. The G20 sought to keep alive the 1.5°C post-industrial temperature rise that the UN's Paris Agreement noted. But 2023 has become the year that 1.5 died.

Indian prime minister Narendra Modi has wisely called a second, now virtual summit on November 22, before the Indian presidency ends on December 1, 2023. But it is focused on development, rather than sustainable development or the climate crisis that India and the world must confront. His successor as G20 host, Brazilian president Luiz Inácio Lula da Silva, has made climate change along with equality the top two priorities for the summit he will host in Rio de Janeiro in November 2024. But the world cannot – and the G20 should not – wait another year to start to protect the climate and to make this purest form of globalization work equally for all.

So, there is much more for the G20 to do, and no time to lose.

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Appendix A: title ↩

Notes: [a] Average of assessed commitments reflects the individual scores for each of the 52 assessments completed. Compiled by Brittaney Warren, October 20, 2023, and John Kirton November 14, 2023.

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