International taxation, global warming, aid to developing countries … the commitments of the G20 in Rome

A decisive weekend in Rome. Gathered in the Italian capital on Saturday 30 and Sunday 31 October for the summit of the Group of Twenty (G20), the leaders of the major economies of the planet have agreed on several economic measures but are still relatively unclear on climate objectives , a few hours before the opening of COP26 in Scotland.

At the leaders’ dinner on Saturday evening, Italian President Sergio Mattarella said:

“We must not leave to those who come after us a planet in conflict, the resources of which have been wasted. The onus is on us to make a decisive breakthrough to overcome these burdens. The time has come. The eyes of billions of people, entire peoples, are on us and the results we can achieve. “

  • Two “historic” agreements on global taxation and customs duties

The leaders of the major G20 economies on Saturday in Rome gave the final green light to global tax reform. This “Historic agreement”, in the words of US Treasury Secretary Janet Yellen, notably plans to introduce a minimum tax of 15% on multinationals, with the objective of implementation by 2023. “For four years, I have been fighting to implement an international tax of at least 15% for multinational companies. Tonight, we are there! “, rejoiced Emmanuel Macron, while German Chancellor Angela Merkel greeted ” a great success “ and “A clear signal of fairness”.

In Rome, US Secretary of Commerce Gina Raimondo unveiled another deal described as“Historical”, this time to lift certain tariffs on steel and aluminum imports that have plagued trade relations between Washington and Brussels since the imposition of these taxes by the Trump administration. This should allow “Limited quantities of European imports of steel and aluminum to enter the United States duty free”, she clarified.

Read also In Rome, G20 leaders endorse reform of international taxation
  • A warming target maintained at +1.5 degrees

The G20 reaffirmed the objective of the Paris agreement which is to maintain warming “Well below” from +2 ° C, if possible to +1.5 ° C, compared to the pre-industrial era. A ceiling which has in fact become the priority objective since then. But, in their statement, the countries wanted to go a little further by adding that “Keeping (the target of) 1.5 degrees within reach will require meaningful and effective actions and commitments from all countries”.

The G20, which includes developed countries like the United States and members of the European Union, but also large emerging economies like China, Russia, Brazil or India, represents 80% of global gas emissions. Greenhouse effect. “Their response will be decisive in keeping the 1.5 degree accessible”, said Alok Sharma, a British conservative politician appointed president of COP26.

Read the article by Laurent Fabius, Alok Sharma and Laurence Tubiana: Article reserved for our subscribers “At COP 26, the world must honor the Paris agreement”

According to the latest UN assessment which takes into account the new commitments of a majority of the signatory countries, the world is still heading towards warming “Catastrophic” of + 2.7 ° C. Or at best +2.2 ° C, if we take into account the promises often “Waves” of carbon neutrality for the middle of the century.

“The middle of the century” is precisely the wording adopted by the G20 in the final document. A horizon less precise than the date of 2050 desired in particular by the Italian presidency of the G20, “But quite significant, considering the diversity of the countries participating in the G20”, according to the French presidency, which evokes “a common objective”.

COP26 is “The last and the best hope” to limit global warming to +1.5 ° C, said Alok Sharma, when it opened in Scotland. During the Covid-19 pandemic, “Climate change has not taken a vacation. All the lights are red on the climate dashboard », he added, on the first day of two weeks of a meeting considered crucial for the future of humanity.

Read also Article reserved for our subscribers COP26, a crucial conference in the face of the climate crisis
  • End of subsidies for new international coal-fired power plants by the end of 2021

G20 countries have also agreed to stop subsidizing new overseas coal-fired power plant projects this year. “We will end international public funding for new coal-fired power plants by the end of 2021”, specifies the final text. However, they did not set any clear target for the phase-out of coal at the national level. The President of the European Council, Charles Michel, had recognized earlier that the question was difficult in particular “For certain coal dependent countries”.

The G20 was held without China – the world’s largest emitter of greenhouse gases ahead of the United States – nor Russia, Xi Jinping and Vladimir Putin being held in their countries because of the health situation. They intervened by videoconference, but their empty chairs in Rome made some fear a missed date with history.

Beijing nonetheless showed a sign of inflection by promising, in September, to stop building coal-fired power plants abroad. But China still depends heavily on this fossil fuel, which emits a lot of CO2, in particular to run its power plants in the current context of the energy crisis. The future of coal, a key source of greenhouse gas emissions, has been one of the issues the G20 has struggled to agree on.

Read also Article reserved for our subscribers In Rome, on the sidelines of the G20, a parliamentary international against Beijing
  • $ 100 billion in IMF funds earmarked for vulnerable countries

The G20 countries have pledged to pay vulnerable countries $ 100 billion out of the global amount of $ 650 billion in special drawing rights (SDRs) issued by the International Monetary Fund (IMF). The stated objective is to face the crisis generated by the coronavirus pandemic, according to the final draft text. The SDRs are distributed according to the shares of each country in the IMF, so in short, the largest goes to the richest countries. On paper, Africa would only benefit from $ 34 billion, hence the idea of ​​some developed countries to donate their share to the most vulnerable.

“We welcome recent pledges worth around $ 45 billion as a step towards a total global ambition of $ 100 billion in voluntary contributions for countries most in need.”, the executives said.

But developed countries have not honored their promise, made twelve years ago, to mobilize $ 100 billion per year, from 2020, to help developing countries cope with climate change. Hence this new compromise reached over the weekend among the G20 countries, which had so far never agreed on an amount to be returned to developing countries.

It remains for the developed countries, starting with the United States, to each specify their contribution. France is also committed to “Redirect 20% of the money it receives from the IMF to the African continent”, according to the announcement made by President Emmanuel Macron. A similar pledge of 20% of its SDR has been made by the UK, and Japan has pledged $ 4 billion.

Read also Article reserved for our subscribers At the G20 summit, the risk of a divide between developed and emerging countries ahead of COP26

Le Monde with AP, AFP and Reuters

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International taxation, global warming, aid to developing countries … the commitments of the G20 in Rome