GS Paper - 2 (International Relations)

Meeting in person for the first time in two years, G20 leaders had a full agenda including climate change, the Covid pandemic, a landmark tax deal and global economy worries.

Summary of what they agreed

  1. Leaders committed to the key Paris Agreement goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, pledged action against dirty coal plants but fell short on a target of zero emissions.
  2. They also pledged to reach a target of net-zero carbon emissions "by or around mid-century", instead of setting a clear 2050 date, as campaigners and summit host Italy were hoping for.
  3. Leaders put their seal of approval on an agreement that will subject multinationals to a minimum 15 per cent tax, as part of an effort to build "a more stable and fairer international tax system".
  4. The reform, brokered by the OECD and backed by some 136 countries representing more than 90 per cent of world GDP, has long been in the making and is supposed to come into effect in 2023, but the deadline is at risk of slipping.
  5. Leaders vowed to support the WHO's goal of vaccinating at least 40 per cent of the world's population by 2021 and 70 per cent by the middle of next year, by boosting the supply of vaccines in developing countries and removing supply and financing constraints.
  6. Meeting as rising inflation, pushed by spiking energy prices, and supply chain bottlenecks are weighing on a world economy still reeling from Covid-related disruptions, G20 leaders ruled out a hasty removal of national stimulus measures.
  7. Leaders set a new target of channelling $100 billion towards poorest nations, coming from the $650 billion pot made available by the International Monetary Fund (IMF) via a fresh issuance of its Special Drawing Rights (SDR).
  8. SDRs are not a currency, but can be used by developing countries either as a reserve currency that stabilises the value of their domestic currency, or converted into stronger currencies to finance investments.
  9. For poorer countries, the interest is also to obtain hard currencies without having to pay substantial interest rates.