The meeting of leaders of the world’s 20 biggest economies in Rome this weekend will be dominated by wrangling over climate targets that are likely to set the tone for the COP26 summit that follows.
Italian diplomats hope that the first face-to-face summit of G20 leaders in two years can pave the way for a breakthrough on climate issues even though they are viewed very differently by the developing and developed nations that will be there.
Although almost 200 countries will be represented at the UN-convened COP26 gathering in Glasgow that begins on Monday, G20 members account for more than 80 per cent of global gross domestic product and a similar level of carbon emissions.
But the first big international summit hosted by Mario Draghi since he became Italy’s prime minister last year will lack the physical presence of high-profile G20 leaders, notably Xi Jinping of China and Russia’s Vladimir Putin.
What are the issues up for negotiation?
Draghi’s main task, according to Italian diplomats, is to secure agreement from G20 leaders for meaningful action to cut harmful greenhouse gases and limit global warming.
This means securing commitments to achieve carbon neutrality by 2050 and to restrict warming to 1.5C over the same timeframe, in line with the goals of the Paris climate accord. The former central bank chief will also seek to build consensus to slash global methane emissions by 30 per cent by 2030, compared with the 2020 level.
New initiatives relating to the pandemic, which dominated last year’s virtual G20 gathering, are not expected. Italy hosted the G20 health summit in May where wealthier countries pledged to donate Covid-19 vaccines to poorer countries.
Draghi will press the idea to create a new body of medical and financial decision makers that would seek to prevent the next health crisis, along the lines of the Financial Stability Board established following the 2008 financial crash. But this idea has run into resistance from Moscow and Beijing.
What about the absence of leaders from Russia and China?
The absence of Xi and Putin, who both declined to attend in person, citing the pandemic, could be viewed as ominous for multilateralism. The leaders of Saudi Arabia, Mexico and Japan will also not be in Rome, although Japan does have a general election this weekend.
Xi and Putin will, however, participate via video conference. The Italians have shifted the times of the leaders’ summit working sessions to better accommodate their time zones, and have engaged in extensive talks with the Chinese and Russian delegations ahead of the event.
However, at a time when relations between the US and both China and Russia are frosty, the symbolism of Xi and Putin’s absence is unfortunate given the desire of Italy to use this year’s G20 to achieve multilateral solutions for problems ranging from Afghanistan to developing world debt.
Can Draghi shine in his first big outing as Italy’s leader?
Having enjoyed a significant global profile during his time as president of the European Central Bank, Draghi has existing relationships with many of the G20 leaders.
Yet his government has damped hopes of a landmark agreement being struck in Rome, with diplomats cautioning that difference on issues ranging from climate change to Afghanistan will be very difficult to bridge at one meeting.
Draghi held a special Afghanistan summit this month attended via video by several leaders, including Joe Biden, US president, and Narendra Modi, prime minister of India. However, neither Xi nor Putin took part, undermining the Italian’s attempts to build consensus on how to tackle the crisis caused by the Taliban’s takeover.
While the success or failure of Italy’s year-long G20 presidency will almost certainly be judged on the progress of climate talks, the fact that the COP26 meeting occurs directly afterwards may mean that few remember what happened in Rome once events kick off in Glasgow.
What are the main economic initiatives?
Unfortunately for Italy, perhaps the biggest multilateral breakthrough of recent years, the global minimum tax agreement, was struck by 140 countries at the OECD this month, depriving Rome of what could have been a lasting legacy of its G20 presidency.
Although the leaders will endorse the tax deal backed by 140 countries, the fact that it was backed by G20 members and given the green light by their finance ministers only a fortnight ago means that this will amount to little more than a rubber stamp.
The tax plan’s backers aim to sign a multilateral convention in 2022 and for it to take effect the following year.
Developing-country debt that was put into focus during the pandemic will also be discussed. The G20 last year provided relief to poorer countries struggling to finance their pandemic response, but its efforts fell short of expectations.
Its debt service suspension initiative launched in 2020 was expected to provide “north of $20bn” in relief last year alone, by allowing 73 eligible countries to suspend payments on debts owed to G20 governments and other creditors.
But only 46 countries have taken part, deferring $10.3bn in payments on bilateral debt due between May 2020 and June 2021, with another $600m written off by the IMF. More than half the relief came from China.
The mechanism is due to be replaced by a G20 common framework on debt relief from January, although this has not got off to the best of starts.
Announced almost a year ago and designed to offer greater relief from private sector creditors, it has so far attracted just three applicants: Chad, Ethiopia and Zambia.
As part of our coverage of COP26 we want to hear from you. Do you think carbon pricing is the key to tackling climate change? Tell us via a short survey. We will share some of the most interesting and thought provoking answers in our newsletters or an upcoming story
Follow @ftclimate on Instagram
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here