G-20 Summit Kicks Off With Focus on Global Minimum Tax, Pandemic Preparedness

ROME —
The G-20 Summit hosted by Italy kicked off Saturday in Rome, where leaders from the world’s major economies discussed issues of mutual concern, including pandemic recovery and climate change.
The red carpet was rolled out at “La Nuvola,” Rome’s convention center, as Italian Prime Minister Mario Draghi welcomed U.S. President Joe Biden and other leaders amid strict COVID-19 protocols.

This weekend’s summit is the leaders’ first face-to-face meeting in two years, following last year’s virtual summit hosted by Saudi Arabia. Notably absent are Russian President Vladimir Putin, Chinese President Xi Jinping and Mexico’s President Andrés Manuel López Obrador. They will join virtually, citing pandemic concerns at home.

Global minimum tax

On day one, G-20 leaders voiced their support for a global corporate minimum tax deal agreed to by finance ministers from 136 countries earlier this month after four years of negotiations led by the Organization for Economic Cooperation and Development.

The deal would mean a sweeping overhaul of international tax rules. Under the deal, countries will apply a minimum global corporate tax rate of 15% for companies with annual revenues of more than $870 million, while large multinational companies must pay taxes where they operate, not just where they are headquartered.

“The president emphasized the importance of this historic deal during his intervention,” a senior administration official said.

“G-20 members are right to celebrate this deal,” said Matthew Goodman, senior vice president for economics at the Washington-based Center for Strategic and International Studies. The question is whether and how soon G20 members can implement the agreement within their respective domestic legal frameworks.

“That’s going to be, frankly, quite challenging in the United States and several other countries,” said Goodman.

Pandemic response and prevention

On Friday, G-20 health and finance ministers released a communique committing to bringing the pandemic under control globally as soon as possible, and strengthening collective efforts to prepare for, prevent, detect, and respond to future pandemics. The communique says the G-20 will take all necessary steps needed to advance global goals of vaccinating at least 40% of the population in all countries by the end of 2021 and 70% by mid-2022, as recommended by the World Health Organization.

The ministers announced the formation of a new panel to improve the global response to future pandemics but did not specify any funding for the task force. They could not reach agreement on a separate financing mechanism proposed by the U.S. and Indonesia to prepare for future pandemics.

“We’re looking for not the ultimate final product of a financing mechanism or the ultimate final product of a taskforce or a board that would operate as kind of a global coordinating body going forward,” White House National Security Adviser Jake Sullivan told VOA aboard Air Force One on Thursday. “So the hope is to have in the communiqué a statement of intent that we will work towards these two outcomes.”
Climate change

On Sunday, G-20 leaders will shift their focus to climate change. From Rome, United Nations Secretary General Antonio Guterres called the summit an opportunity to “put things on track” ahead of the UN COP26 climate conference in Glasgow that G-20 leaders will participate in following their Italy meeting.

“There is a serious risk that Glasgow will not deliver,” Guterres said. “The current nationally determined contributions — formal commitments by governments — still condemn the world to a calamitous 2.7-degree increase,” he said referring to the pledge made at the 2015 Paris Climate Accord to limit global warming to 2 degrees Celsius, ideally to 1.5 degrees Celsius.

Countries are expected to announce more emissions reduction pledges to reach the target of net-zero emissions by around mid-century. But some analysts are skeptical of these voluntary commitments that come without enforcement mechanisms.

“There’ll be pledges, the best-case scenario something along the lines of what we saw in Paris,” said Dalibor Rohac, a resident scholar at the American Enterprise Institute.
Rohac added that to make progress on climate change, the world needs tangible actions. “Rather than to proceed with this habit of looking for a Big Bang multilateral solution, to pursue sound domestic policies that accelerate decarbonization.”

A key issue to watch is whether G-20 members can agree on coal. The U.N. has called for wealthy countries to phase out coal by 2030, but G20 environment ministers have failed to agree on a timeline.

Guterres also called on wealthy nations to uphold commitments to provide funding to help developing nations mitigate the impacts of climate change. Under the 2015 Paris Climate Accord, wealthy nations pledged a minimum of $100 billion per year in climate funding to lower-income countries. Much of that money has not been delivered. enario something along the lines of what we saw in Paris,” said Dalibor Rohac, a resident scholar at the American Enterprise Institute.

Rohac added that to make progress on climate change, the world needs tangible actions.

“Rather than to proceed with this habit of looking for a big-bang multilateral solution, to pursue sound domestic policies that that accelerate decarbonization,” he said.

A key issue to watch is whether G-20 members can agree on coal actions. The U.N. has called for wealthy countries to phase out coal by 2030, but G-20 environment ministers have failed to agree on a timeline.

Guterres also called on wealthy nations to uphold commitments to provide funding to help developing nations mitigate the impacts of climate change. Under the 2015 Paris Climate Accord, wealthy nations pledged a minimum of $100 billion per year in climate funding to lower-income countries. Much of that money has not been delivered.

Source: Voice of America