Creon Butler
Well, hello, everyone. My name is Creon Butler, and I’m the Director of the Global Economy and Finance Programme at Chatham House. It’s my great pleasure to welcome you all to our panel session today, which is looking ahead to next week’s G20 Summit, which will take place in Rome on the 30 to 31st of October. The summit will be chaired by the Italian Prime Minister, Mario Draghi, and according to the Presidency, will focus on three broad, interconnected pillars: people, planet and prosperity. The Presidency says the key themes will include ensuring a swift international response to the pandemic, while building up resilience to future health-related shocks. They also want leaders to look beyond the crisis, towards ensuring a rapid recovery that addresses people’s needs. And in particular, they want to focus on reducing inequalities, promoting the creation of new jobs, social protection, and food security.
Now, there are a number of overarching questions, particularly after the paralysis of the Trump years, when a vast amount of effort in such groups as the G20 went into trying to hang onto the consensus that previously thought was established in key areas. A key question will be, you know, how far is the G20 back and what is at stake in this upcoming summit for the institution itself? There are also questions around the growing tensions between China and the US on trade, investment and technology, and how these will playout. Will these two countries be able to co-operate on such issues as climate change, health and debt, despite their intensifying competition?
Now, to give their perspectives and address these and wider issues, we have a brilliant panel of Chatham House experts. To cover the economic, trade and financial issues, we’re joined by Linda Yueh. Linda is an Associate Fellow in the Global, Economy and Finance Programme and US and Americas Programme at Chatham House. She is also a Fellow in Economics at St Edmund Hall, Oxford University, and Adjunct Professor of Economics at the London Business School. To cover global health issues, I’m joined by Emma Ross. Emma is a Senior Research Fellow in the Global Health Programme at Chatham House. Emma is also Managing Editor of the Control of Communicable Diseases Manual. She was a long-time Medical Correspondent at the Associated Press and has advised the Director-General of the World Health Organization on media issues. And last, but by no means least, to cover climate change and environmental issues, we have Antony Froggatt. Antony is a Senior Research Fellow in and Deputy Director of the Environment and Society Programme at Chatham House. He has previously worked as an Independent Consultant for 20 years with environmental groups, academics and public bodies in Europe and Asia.
Now, full details of our colleague – my colleagues’ CVs can be found on the Chatham House website, and each of them will speak for three to four minutes on their specific areas. I will then ask one or two questions, to get the debate going, and then we will move to general Q&A from the audience. Just one quick reminder, the event is on the record, and please do put your questions in the Q&A box, but if possible, keep them as succinct as you can. Excellent, so for our first brief synopsis of key issues coming up, Linda, over to you.
Dr Linda Yueh
Thank you very much, Creon, and I’m going to have to, I think, set the pace. I’m going to try very hard to stick to three to four minutes, otherwise it’s going to all go wrong from the start. So I’m just going to focus, I think, on three areas. There’s obviously a lot more that I’m sure we’ll cover and discuss.
In the area of the recovery, as you say, this is actually one of the – probably in many ways for Economists, the G20 is very well positioned to do this, because you have the major economies together. Now, there’s a number of issues that they’re going to have to contend with. Supply chain disruptions, inflationary pressures, and I think, just more broadly, the very uneven vaccination rates in the world means that there’s a very uneven global recovery, and there’s a lot of, and I’m sure Emma will go into this in much greater detail, but I think that – so I’ll leave that one. But I think in terms of the supply chain and then the inflation and what is it that we want global leaders to commit to, I think is one of the key things to watch out for.
So, this is going to be a theme in some of what I discuss, which is the G7, that the UK is President of, put out a number of recommendations. It was a very, in many ways, strategic G7, in terms of the communique that they issued in areas that they hope that the world would sign up to. So, obviously, supply chain resilience is one of those. So, if you think about the current bottlenecks that we have, the World Bank estimates that about 8.5% of, you know, ships are just in the wrong place, and you know, this issue existed before the pandemic, but it’s actually one of the supply side bottlenecks that’s adding to the inflationary pressures, which then has knock-on effects, because even if it’s transitory, the shift in expectations around inflation means that central banks, including the Bank of England, may well raise rates later this year, just about coinciding with the economy having recovered to pre-pandemic levels.
So what this says is they really will – and if you want supply chains to be resilient, there’ll be more transition issues around that. So you can, I think, if they can, try and reduce those bottlenecks and have a transition plan for making supply chains more resilient, rather than just saying, “Well, yes, we’re going to make them more resilient,” but what does that mean? What kind of transition is involved? I think that’s going to be an area that’s going to be a big near-term interest for us all, and again, just because the UK has recently had petrol station queues, planning the transition is actually critically important. So, if they are going to go down this road. And I’m not, by the way, convinced that supply chain resilience is going to get the G20 sign up, because I think there’ll be a number of countries that view it as protectionist, even if the intent is to mirror the reality, which is lots of countries, since the pandemic, not just around PPE equipment but other things, and the geopolitical tensions, that I’m sure we’ll discuss, means that there is a greater push to try and have supply chains, which are more localised, more nationalised, and more regionalised, alongside the very disparate ones that we have. So this is actually a massive economic issue, and I think the G7 are going to be pushing that, perhaps quietly, but it will certainly be there.
I think the second big issue, and this is what President Biden said he was very keen on, is he wants the endorsement of the G20 Finance Ministers to translate into a Leaders’ Commitment around the global tax issue. He’s going to go to Rome and he wants it to be 15%. Now, they have, especially via the – not just the G7, but the OECD in particular, and again, it is an initiative that you see a plurilateral group of countries that have taken this. And they did manage to make a breakthrough via the G7, the OECD has struggled to do this for years, to agree in principle a global minimum corporation tax. We’ve already heard from the Italian Economy Minister that there will not be an immediate elimination of their digital tax, which the Americans very much want. So I think there will be some frictions around that. But the reason, again, I think this is important, is for tax revenues, and this is coming back to something that I’m sure is going to be discussed quite a bit, which is if you want to have an equitable recovery, knowing that quite a few countries will be under pressure fiscally, then having a source of revenue is obviously hugely important. It’s going to, I think, mean, you know, more debate around exactly the shape that it takes.
And then finally, to, kind of, finish off that section on the fiscal pressures, I think lots of developing countries will be concerned that the debt they’ve incurred during the pandemic is not going to be manageable going forward. So, obviously, I think that is something else. Some debt relief has been discussed, a debt moratorium at least, and debt relief for the poorest countries, but I think, how much they put on the table from the rich countries is going to be hugely important.
And then just finally, and I realise I’m actually a minute over my three or four minutes, so I’m just going to finish off by saying, there is going to be, I think, quite a lot of effort to reaffirm multilateralism, and I think because we’ve heard the affirmation, but we want to see what it means, I suspect there’s going to be a push for a global carbon tax or carbon pricing. I think there is – I chaired the WTO Director-General earlier this week for a talk, and I know this is something she wants to bring major economies onboard with, alongside the WTO, the World Bank, the IMF, and the OECD, ‘cause that would demonstrate, obviously, that globally co-ordinated action is possible. But I suppose, you know, Creon, you’re a veteran of these things, the fact that communiques probably can say they support multilateralism, we probably would have welcomed that a few years ago, but I don’t expect that to be a major issue. I think it’ll be what’s behind it that’s going to be more interesting. So I’ll pause there.
Creon Butler
Linda, thanks very much. I mean, I think you highlight some really core issues, and certainly the supply chain thing is not something the Italian Presidency would necessarily have planned on having to do at the outset of their Presidency. So I think it’ll be very interesting to see where they’re not – it’s not just about them getting some good words in the communique, but if there’s going to be something concrete underneath it, as you highlight. And pretty – there are many connections between the issues you’ve set out and, Emma, your area, in terms of global health, because, as everyone is saying, the vaccine rollout has actually been crucial to the economic recovery more broadly. So Emma, perhaps I could hand it over to you for your comments on the general health picture.
Emma Ross
Thanks, Creon. So, of course, we – it’s well known now that the longer this pandemic drags on, the greater the cost, the bigger the risk, and that’s the cost in lives, economic and social fallout, will escalate further. Unless the world pulls together, the divide between those who are protected and those who are left to the mercy of the virus will widen even more, with a significant impact on the socioeconomic recovery of those who are left behind. And I think it’s also well recognised that global solidarity of facing this pandemic has been pretty wanting. The G7 didn’t rise to the occasion. So, everyone’s looking to the G20 now to see if this wider representation of credible leaders can step up. Some of the countries that have been most vocal about the failings will be around this table, so they are in a position to sort this out, and I think this is going to be a particularly important gathering, one of a few, in the next few months, for global health going forwards.
A few issues to look at here. Of course, how the global vaccine equity issue will be handled. The outcome of any discussion of this will be a big test of global co-operation to end the pandemic, given the disappointment in the G7 and in individual richer countries that have got plenty of vaccine supplies. Another thing I’ll be watching for is money for global pandemic preparedness. What would any pledges be committed to, is that support for global initiatives, but also for strengthening capacity is at the country level? And also, related to that, will be pledges to financially strengthen WHO or calls to reform the international health regulations, or to give them more teeth, actually. And also an offshoot of that is the champion – will they champion the idea of a pandemic treaty? That’s going to be discussed at the end of November at a special session of the World Health Assembly and if there is consensus gained at the G20, that could definitely facilitate progress at the World Health Assembly meeting. So, basically, what happens here is an indicator of how those discussions might go. And the last thing that might come up is might there be some solidarity around reopening global travel and trade to a greater extent, and that’s about harmonisation of vaccine passports or the entry requirements, ‘cause at the moment it’s a bit of a mess, causing a few problems.
But the main thing I wanted to focus on is, yes, there’s a lot to talk about, regarding better preparedness and response in the future, but there is a huge unfinished business, of course, in tackling the ongoing pandemic, and that’s got to be the most urgent priority for them. And global vaccine equity is a major part of that agenda. One aspect I think will be interesting to see is to what extent will the middle income countries in the G20 demand that the richer countries do more to vaccinate the world. And that means sharing the vaccine doses or freeing up contracts and make good on the promises they’ve made. We’ve had a lot of NGOs and even countries within the G20 that have signed up to the People’s Vaccine Alliance. They’ve all been very vocal on this. But will those countries make their voices heard at this table and really push this? And also, how will the richer countries that hold much of the vaccine supply play this? Especially as some are embarking now on the booster programmes.
On the sharing of vaccine doses, this is important because the vaccine makers say they are now producing 1.5 billion doses a month, and by the end of the year, there should be enough, more than enough, to meet the World Health Organization target, which is vaccinating 70% of the global population by the middle of next year. So there will be enough vaccine, but the thing is, getting those doses to where they’re needed most. And most of these doses that are coming seem to be headed for wealthy countries that will soon have way more than enough.
The UNDP keeps a global dashboard of vaccine equity actually, and as of two days ago, nearly 63% of people in high income countries have had at least one dose, and that compares with 4.5% in low income countries. So that’s one in two versus one in 22. And the G7 countries, even though they pledged vaccine, they’ve so far delivered 15% of what they promised to lower and middle income countries. So they haven’t stepped up. So there’s a lot of pressure on the G20 to do this.
But it’s not only vaccine doses, it’s also money to get the doses into arms. So, will the G20 provide the $8 billion the WHO says is needed to help the countries store, deliver and distribute the vaccines? ‘Cause it’s one thing to get it there, but actually getting it into arms, there’s a whole infrastructure that needs to be bolstered here and supporting countries that are spending – need to spend about 56% more of their – in healthcare costs to deliver these vaccines. And that’s compared to richer countries only need to up their spending by about 0.8% to cover the cost of vaccinating 70% of their populations. So there’s a huge gap there. And while we’re talking about money, that’s not just for vaccines. There’s new drugs coming online. Those are likely to be very important tools, and those are not shared equitably, and as I’m sure you can imagine, the equity gap will widen even more. And there’s an even bigger shortfall in money for COVID testing and therapeutics. The ACT Accelerator, which deals with access to tests and treatments as well as the vaccine, still has a $16 billion funding gap. So, I guess we’ll be looking to see if that’s going to be filled.
Also, on vaccine equity, there’s a bit of an elephant in the room on the whole issue of intellectual property for vaccines, drugs and tests, will that be faced at the G20? It could be. A lot of the countries that have been vocal about this are at the table, particularly, you look at Brazil, South Africa, India in particular. Those are countries that have the capacity to make drugs, vaccines. Will this be pushed? It’s a live issue at the moment. A lot of people think that if we’re going to get, you know, equity on the COVID tools, this has to be tackled, and especially for preparedness for the future.
And then, of course, lastly, there’s backing for global better preparedness in the next time. And there are a few proposals for the G20 to choose from, many directions they could go in, but I wanted to focus mostly on the unfinished business of now rather than pandemic preparedness, but there are lots on the table that are going in different directions, and it would be interesting to see whether they go for any of those.
Creon Butler
Emma, thanks very much. I mean, there’s some fascinating figures there, and I think there’s also this – you know, if the industry is producing 1.5 billion doses per month, you know, does that actually take the heat out of the IP issue or not? You know, that’s one of the things that I guess we will see.
Emma Ross
Sure.
Creon Butler
So lots to come back to there. But next, Antony, if I could move to you to look at the slightly longer-term issues, although not that much longer-term when we’re talking about climate change and the environment. So over to you.
Antony Froggatt
Yeah, thank you very much, and yeah, good to speak to everyone. Yeah, obviously, this is an important G20 for a number of reasons. And I guess, firstly, in terms of the urgency of climate change, what we have seen over the last year increasingly is that the impacts of change are happening here and now, so it isn’t just a future issue, and recognition of its importance, code red for the environment coming from the United Nations and IPCC etc. So, from an environmental perspective, clearly we need a rapid response. But also, in some ways, we should have the politics aligned, because we have the G7 chaired by the UK, we have the G20 chaired by Italy, both hosting COP26, which is starting straight after the G20 Summit. So, they should be working in parallel and enabling us to make significant progress.
The things to look out for, I would say, are firstly, the Paris Agreement is – set temperature target ambitions, saying that global temperature should not rise more than 2o above pre-industrial temperatures, and ideally not more than 1.5o. So are we going to see the G20 adopting that 1.5o target and saying, “Yes, we will, as a group,” and as a powerful group, I mean, it’s 80% of the global emissions on an annual business come out from the G20 countries? So, unless we see them move in this direction, then we don’t have any hope of meeting it. So, I think on the high level, we need that political intention of adopting the 1.5o target and linked to that is a net zero target by mid-century, by 2050. So that language needs to be in there on both of those points.
On a more short-term, we’re looking at 2030 targets, and what Glasgow is about is about looking at the implementation of the Paris Agreement. So we’re not going to come out with a similar treaty. We have the treaty. It’s about implementation, and one of the key implementations is these nationally determined contributions. The pledges made in Paris or running up to Paris were insufficient, and that’s what we’re hoping or what we are seeing running up to Glasgow. But a number of the G20 countries have not made those pledges, they have not updated their NDCs, and so people will be looking towards these countries, so in particular, China, India, Russia, Saudi Arabia, Australia, all of which need to be updating their NDCs. I guess a couple of weeks ago, I thought that would happen in the run up to Rome, but on Monday and Tuesday, the 1st and 2nd of November, the first couple of days of COP, is the Climate Leaders’ Summit. So, many of the leaders will be going from Rome to Glasgow, so maybe we will see pledges in Glasgow rather than Rome, but the key thing is, unless we see significant progress there, then the idea that we’re going to get close to 1.5o is out of the window. So we need to see significant progress in that regard.
The third point, just in terms of the high level, is the issue around, for example, the 100 billion, and this really talks very much to what Emma was talking – it’s about equity. Is – so, the developed countries have pledged $100 billion to developing and vulnerable countries to assist them, in terms of decarbonisation and preparing for climate change. And 100 billion isn’t – is not the solution. I mean, in terms of global investment in renewables, for example, we’re around 300 billion a year. But it is important, in terms of enabling adaptation in particular, but enabling maybe things that are less economically viable to go ahead. But it’s also a question of trust and about global equity. So, unless we get close to that 100 billion, which is supposed to have been put in place by 2020, then I think many of the developing and vulnerable countries will be saying, “Well, actually, yeah, we’re not having equity here, we’re not having trust.” And so, I think that is absolutely fundamental for COP, but a number of, again, the G20 countries are really crucial for the delivery of that.
And then maybe one final specific point is coal. I mean, coal is the dirtiest of the fossil fuels. Unless we phaseout very rapidly the unabated use of coal, then yeah, we don’t have any chance of meeting any climate targets. But – and the G20 are the key coal producers and coal users: China, India, Australia, etc. So we’ve started to see movement in this direction. The G7 pledged to stop the export of coal or financing of coal facilities. We saw the Chinese, President Xi, in terms of the General Assembly, saying they wouldn’t be financing coal exports or coal facilities – or coal finance for facilities in other countries. Will we see other G20 countries doing this? But that’s only one other issue. Obviously, it’s in terms of phasing out the use of coal will be key. So I think some of the language around coal will be also an indicator of ambition within the G20.
Creon Butler
Antony, thanks very much. I mean, on the 100 billion, we’re not that far away, as I understand it. I mean, the OECD figuring is, what, about 80 billion? Is that right, roughly right? So, you know, that’s not impossible. But I think, as you’ve hinted at, I mean, this is probably more than anything the area where we may – the full benefit of this G20 may not be visible on the 31st of October. It may actually be visible when we get into the COP26. I mean, that could be true in other areas, but it could specifically be true here.
What I would like to do – we are getting some questions, but I’d really like everybody – to encourage everybody to – who’s listening, to put their questions into the Q&A box and we’ll come to you shortly. But I’d like to, sort of, put to the three panellists, say, a broad question now, which is really going to this role – this question of the role of the US and the role of, you know, what have been up to now growing US-China tensions.
Now, you know, in some ways this G20 has to be better than the G20s of the past four years or so, which have experienced working on the other side. I mean, it was just – it really felt incredibly painful just trying to hang onto things that were previously, sort of, common consensus among the G20 countries during the Trump Presidency years. That is not going to be the case now. But in terms of doing this concrete stuff, it really – what is crucial is going to be how much leadership do we get from the US and how are the tensions between the US and China managed, and in particular, you know, are we – are they able to co-operate on issues like global health, climate change, developing country debt, despite the tensions they have on technology and trade and so on? And I just wonder if I could, sort of, perhaps go in the same order and ask you for a quick, kind of, view on that, in terms of your expectations? So Linda, maybe coming to you first. I mean, tax we’ve seen, in a way, that happened, despite these tensions, but then the Chinese didn’t have a really great stake in this in quite the way they do in some of the other issues like debt.
Dr Linda Yueh
Yeah, that’s absolutely spot on. I mean, I think – and this already goes back to something which has been ongoing, which is this debt moratorium that have been offered by advanced economies for developing countries. You know, it was hard to get China to really fully commit to that, ‘cause obviously a lot of the state control of Chinese debt – different forms of Chinese lending obviously makes it more opaque. So I do think, if they are going to commit to making an equitable recovery, I think China’s going to have to be more transparent about if there’s – about the ways in which they would support and which is, roughly speaking, a fairly global effort already. But that is actually one of the many challenges. I just want to do this briefly, ‘cause I know you want to move on, but I think that’s one of the many challenges, actually, of Xi Jinping not being there. He’s not actually expected to attend in Rome. ‘Cause it would seem that, you know, given that the predictions are developing countries will not recover to pre-pandemic levels until 2023, so that means they’re going to lose about four years of growth versus about two years for advanced economies, it’s going to prolong the global pandemic for everyone, unless we can get their finances, you know, better supported, because recovering from the pandemic is going to be another issue.
And the other thing I would just flag is, and maybe this is much more in Antony’s area, but, you know, the Build Back Better World. So this – it’s got a funny acronym, which I can’t – which – with some letters, which are escaping me now, but that was another Biden, you know, announced it at the G7, he wants 40 trillion to be invested, and it’s viewed as a counter to China’s Belt and Road Initiative, in some respects. So, it’s hard to – if that then appears, that’s something that’s going to help the recovery, this investment, moving into the digital economy infrastructure, all of that, but it has this, it’s perceived to have this anti-Chinese bent. It does, again, point to an explicit area of tension that the G20, you know, with these two economies, might find hard to bridge that difference, because the monies are going to have to be found somehow, by the way, the 40 trillion, that’s a [inaudible – 30:42] to finance. But it is absolutely true that with record low interest rates and a huge amount of fiscal strain for lots of countries, and the ability to invest and to use that to grow while economies, you know, struggle to recover back to where they – what they had lost, you know, it is one avenue that they could make a big announcement on. But we’ll see. Maybe when he joins by videoconference or something, they can have a good Zoom, you know, a Zoom breakout discussion.
Creon Butler
Yeah, very much so, and I think, you know, debt is one of those areas, a bit like climate change and health, where, you know, in a way, the mutual benefit should be a very strong one. So, it will be interesting to see if that is – and particularly, given the problems in the common framework, the fact the Debt Suspension Initiative is due to end at the end of this year, I mean, I think it is a – it’s a real – potentially a priority issue. So, Emma, your view on this point as well?
Emma Ross
On US-China tensions?
Creon Butler
Sorry, US leadership and, to some extent, related to that, US-China tensions, in relation to the, you know, the certain issues you’ve highlighted.
Emma Ross
Yeah, so – sure. On US leadership, it would seem we’ve got a lot more hope for US leadership in the pandemic than we did under the previous administration. Of course, President Biden seems to be championing vaccine equity, but timeline not quite certain. So he pledged more vaccine sharing and a virtual COVID summit on the side lines of the UN General Assembly, effectively doubling what the Americans were committing to share. So, they’d already pledged 580 million doses, but – and then this would take it beyond a billion. But they’ve only delivered about 160 million of the 580 million so far. That was about a month ago, the last time I saw the count on that. So, I’m not quite sure how far that’s gone. But there is a lot of hope in Biden, and I think just like other countries that have pledged vaccine supplies, which is the most urgent call at the moment, and the most visible call to leadership. There’s very little certainty about the timeline of that, and I think you could say a similar thing about UK leadership on this.
I think countries that are mounting booster programmes, it’s hard to imagine that they would want to be letting go of vaccine doses or letting go of contracts for upcoming vaccine doses when they are, you know, going younger and younger in their vaccinations and launching booster the programmes, ‘cause they’re going to need doses. But, you know, if you look from the pharmaceutical side, the amount of doses that are being made, there will be an excess, even if you take into account donations and booster doses. So there should be plenty of scope for them to show leadership on this and…
Creon Butler
If I can ask you, you’ve mentioned, for example, WHO health – World Health Organization financing as being a potential priority. Well, obviously, in the Trump period we had – that was, cutting across that was the tension over the WHO report in relation to the origins of COVID and so on. Do you think that that tension is going to be managed so that you – one can move forward, in terms of greater support for the WHO?
Emma Ross
Yeah, I don’t know whether the US-China tension obviously, over the origins of the pandemic is going to playout at the G20. There are a couple of other US-China tensions at play that are relevant. One could be – if they get into a discussion about harmonising vaccine passports for travel, it’s vaccine – which vaccines are going to be acceptable to which countries? We’re already seeing that some countries will only accept vaccines that are approved in their countries, or will they approve ones that are on the WHO list? So there are tensions there with Chinese vaccines and the acceptability of those for international travel, and that tension could playout. There’s also whether discussions about intellectual property reform for drugs and vaccines come up. The US has traditionally not been in favour of loosening intellectual property rights protections, ‘cause they have a massive research-based pharmaceutical industry to protect, and the conversation has normally been shifted towards, “Let’s get the pharmaceutical companies to make more vaccines and just give them away,” rather than building manufacturing capacity in more developing countries. So I think they may be on opposite sides of that.
And also, on the powers to – of WHO to investigate and push on this origin thing, but it’s a tricky thing for the US to push, actually, because none of these countries really want WHO coming into their country and investigating them. There are sovereignty issues there, so while they want WHO to go into that country over there, do they want them coming into their own? So, more power for WHO is an eggshell situation.
Creon Butler
Okay, understood, and Antony, to you now. I mean, in a sense this is probably an even bigger question than the other two we’ve looked at in relation to future co-operation on climate change. What’s your view as to how the US leadership will work out and how the tensions between the US and China will be managed?
Antony Froggatt
Yeah, in terms of leadership, obviously President Trump withdrew from the Paris Agreement, President Biden has re-joined. President Biden has put in place a more ambitious NDC, and this nationally determined contribution, so very positive in that regard. I think we still need to look at the domestic implementation of that. So, we’ll see, I guess this week, whether or not the two big bills will be adopted in the US legislation, in terms of the infrastructure and the stimulus packages, and what is taken out, in terms of the environmental and climate elements to those. So I do think that, yeah, the next few days are crucial in that regard. Are they able to meet the targets that they’re setting internationally? is really important.
It’s also clear, in terms of going forward, we have seen increasing pledges for, for example, the 100 billion that we talked about from the United States. But that is a longer-term commitment, so it’s about meeting 100 billion and then having 500 billion over the next five years, and so it creates some difficulties, I think, for the United States, to guarantee that, given the swings that we’re seeing between Republican and Democratic Presidencies. So, yeah, it – the language around this will be really important. So US leadership, absolutely thumbs up on one level, but yet, the sustainability of that leadership is questionable, and I think the administration needs to go some way to demonstrate that they are trying to keep – put in place a greater, longer-term role for the US, in terms of climate leadership internationally.
And in terms of the relationship with China, obviously China is crucial. I mean, I guess in all of these conversations we always say, “Yeah, China is fundamental,” but obviously with nearly 30% of global emissions from China, unless we engage them and unless there’s a movement, then it’s really difficult to see meeting any target, and that is recognised. I mean, John Kerry going to China twice already is significant, it’s in particular, given the difficulties in travelling to and from China. Very clear that they want to engage China in this issue. China is, again, I think we see in the other areas, it doesn’t want it to be – well, you can have an agreement in climate change, but not in these other areas, it’s an all-in-one package, which is difficult. But I – given the global impacts of climate change, given the absolutely near-term implications that we’re seeing in China and other countries that they want to deal with, there is a ground and an opportunity for increased co-operation, not just between the US and China, but I’d also put the EU in there. I mean, it is that triumvirate, in terms of technologies, in terms of emissions, in terms of finance, that has to work together, and I think have been doing so, but probably, again, as with other areas of climate change, not on the pace and the degree of ambition that is necessary.
Creon Butler
Well, thank you very much, and we’re getting some really good questions coming in, so I would like to take some of the questions now, and I’ll read them out, or at least read the first one out, and then it’d be great to get your responses. So, this is particularly for Emma and Linda, and this is from Helen Collis in POLITICO and she asks, “I understand the G20 are likely to agree the set-up of a global health and finance forum. What’s the significance of this and what impact is this likely to have on healthcare, vaccination, and pandemic preparedness ambitions?” And I think this probably goes to the Global Commons report that was prepared for the G20 Finance Ministers in July by an extremely illustrious group of leading Economists and Policymakers. So, maybe Emma, if I could come to you first, and then Linda, for your perspective.
Emma Ross
Sure, sure, thanks, Creon, and thanks, Helen, for the question. Yeah, so I think what you’re talking about is the Global Health Threats Board that came out of the G20 Independent Panel. I’m not quite sure, but the main significance for me would be how this will fit in with other international initiatives. So I’m not sure whether this is the G20’s answer to the IPPR, the Independent Panel on the Pandemic Response. They made a recommendation in May that a high level Global Health Threats Council led by Heads of State and government be established. This Global Health Threats Board was announced in July. So I’m not sure if this is the translation of that. So that – or whether it’s something separate. So I think the significance will, for me, depend, is this in competition with that or is this the translation of that? So we’d have to see, because there are quite a few initiatives that have been tabled. There’s the suggestion of reforming the International Health Regulations or rather giving it more enforcement and more teeth. There’s also a Pandemic Treaty. So, the significance of it would be – I think depends on how it plays into the Pandemic Treaty. Is it trying to compete with it, complement it? I think it’s too early to tell, but obviously, it’s hugely significant that they want to take some action and the impact, I think, will be largely dependent on how well it is backed, once it’s established. Setting it up is one thing, really backing it and resourcing it properly, organising it properly with the proper governance and buy-in will determine, you know, what impact it has. So I think it’s very early to tell, but those are the things that I think might influence.
Creon Butler
Thanks, Emma, and Linda, of course, the origin of this idea is the Financial Stability Board, which we know very well from the financial crisis, and in a sense, people are thinking of that when they’re thinking of this, to some degree. But what’s your view as to its potential and what would be needed to make it work?
Dr Linda Yueh
Yes, I’m not going to repeat what Emma has said, but I think this idea – you’re right, Creon, is that I think this – and it’s different versions of this has been kicking around the G7, how they wanted to have a Pandemic Preparedness Panel. So, essentially, it’s a global public good, they need the major economies to agree how we can finance and head off a global pandemic. Where I see the sticking points are going to be who finances it, which I, sort of, said earlier about the Build Back Better World, and then also, the remit of anything like this. ‘Cause in theory, just like with climate change, yes, you should have preparedness, all countries should sign up. But what does it actually – what will that entail? And I think that’s where we’ll need to see what comes out of it, and global health is a tricky area for China, as we’ve seen with COVID. So, I think that’s – but in general, I think the push to have an equivalent form for global public goods, as you do for global financial stability, is a good idea. It’s just, you know, too many initiatives is not a good idea. So what makes the FSB work is that it’s the successor to the FSF, which – and this is all co-ordinated within the – there’s so many acronyms. It’s globally co-ordinated, the G20 backs it, everybody sees the value of it, and you can see, from their promulgation of, you know, co-ordinating mechanisms in all of that, it is, you know, it is an important board, and I think that’s where some of the tensions we’re describing – can you really have the same degree of co-ordination among nations that will – I think that will determine on how important these initiatives are.
Creon Butler
Thanks very much, Linda, and I’d like now to take a couple of questions. And the first is actually from an old friend and former colleague of mine, Harold Freeman, who was working in the Cabinet Office on the G20 during the – those days of the response to the financial stability crisis. And his question is, “Is the G20 still working as a Leaders’ Forum?” And, you know, the – quite rightly, the G20 Leaders’ Forum was described by a group of US senior officials last year as ‘missing in action’ in relation to COVID. And I’m not sure that’s entirely fair, when you think about the response to international debt, but it’s largely fair. And his question is, you know, “What is the minimum outcome one should expect on climate, health, and trade? And will the absence of key players,” as some of you have flagged already, “undermine the group’s credibility?” And if I could link back also to a, sort of, very personally related question, what role can the EU play in diluting the ongoing tension between the US and China? And maybe we could take that one specifically in the context of climate, Antony, over to you, to some extent. You know, we’ve looked at elements of this, but I think it’s really crucial, in terms of climate.
Antony Froggatt
Yeah, if I take those two points. I mean, yeah, firstly, in terms of, what do we – what’s the minimum, in terms of the G20? I mean, I think I touched upon those. I mean, I think it’s about indicating support for the 1.5o target, I think potentially something on coal. But as we’ve suggested, it will be interesting to see the extent to which there are specific announcements in the communique versus stuff that bleeds into the COP meeting. So, maybe we’ll have to see after Glasgow, in terms of where the G20 sit on a number of these key issues. But absolutely, I, yeah, come back to, I think the language around committing to high ambition from the G20 is crucial.
In terms of the EU involvement, I mean, it is – the EU should be – it needs to be recognised that the EU consistently has been strong on climate change and that targets are becoming more ambitious. So, in terms of the NDC, in Paris the EU was saying 40% emissions reductions by 2030. It’s now at least 55%. So they are moving stronger and with more ambition. And the US, as I’ve said before, has – does shift around, depending on the Democrats or Republicans within the White House. So, the EU – having an EU on climate change being strong does give us a consistency to enable us to engage with China and keep them – keep negotiations going, in terms of having strong ambition from China on climate change. So, I do think that this is a really important role that shouldn’t be underestimated, in terms of the overall climate ambition.
Creon Butler
Can I just ask you, I mean, in Copenhagen, the EU also had great ambitions and, kind of, blew it, essentially because they got out. They said, “This is what we’re going to do,” and then went and said, “Well, that’s fine.” Now, you’ve obviously put a slightly different light on Copenhagen, that it was a failure. But do you think the EU has a different strategy now in relation to influencing these big events, as compared with, you know, particularly Copenhagen, where it was perceived as a failure?
Antony Froggatt
Yeah, I mean, it’s just worth emphasising that it’s not by coincidence that you have Copenhagen, Paris, Glasgow as being the key summits. So, the Presidency of the UNFCCC rotates around regions, and every five years it is in Western Europe, and every five years are the key summit. So it’s interesting that Western Europe has this responsibility. Copenhagen, I think, was problematic, for a number of regions, but partly logistics. And I do hope anyone who’s listening to this from the UK Government is thinking about this, in terms of Glasgow. Having people standing in the cold, in particular world leaders, for a number of hours before they get into conference venues doesn’t create a good negotiating ambience. So, we hope, with all the complications of COVID and testing and the rest of it, that goes smoothly, because we don’t underestimate that it’s important. But also, it’s about what is set up beforehand.
And as I’ve said, I mean, in terms of Paris, it is a global agreement about temperature targets and then a bottom up approach, in terms of the nationally determined contributions. So, in some ways, Glasgow is continuing along this process. So, I don’t see the same potential tensions and failures as was perceived by Copenhagen. But we still need to have raised ambition, and I guess that still is in the Gods in some ways, or in the hands of the EU and the UK, because we are the President, joint Presidency of it, to encourage that ambition. So, yeah, I guess we still have to see.
Creon Butler
Yeah, I mean, what you say reminds me of one piece of advice we had from Laurent Fabius right at the start of the COP26 process, which was make sure that the delegates have really good food when you’re organising a summit like COP26. So, I’m sure my former colleagues have taken that onboard. And what I’d like to do…
Antony Froggatt
There’s a…
Creon Butler
Sorry, go on.
Antony Froggatt
I was just going to say, there is a distillery, apparently, inside the COP venue, so…
Creon Butler
Right, excellent, and I should actually thank Mohammed Foboy for the question on the EU, and maybe I could come to Linda and Emma just on that – particularly on that question of the EU role in relation to your respective areas, but also pick up any of Harold’s points that you want to as well. So Linda, would you like to go first, and then come to Emma?
Dr Linda Yueh
Thank you, yeah, they’re great questions. I think the EU can play quite an important role, because the US and China being at loggerheads means that an economically powerful bloc could, I think, you know, really begin to move some of this. But I think the challenge will be, at least on the, sort of, on the economic issues, is that it’s – there – you know, I think a later question might – we might pick up a later question, is that they’re not trying necessarily to come to an agreement on very detailed proposals. I think what these summits do is that they allow them to set out a common position on, “This is how we support the recovery, these are the principles that we do.” I don’t think the EU is that far from the US on these issues, and oftentimes, the benefit of these meetings is the, you know, is the, sort of, informal, you know, chat with, or Creon, you know, or your colleagues know it well, you know. So, you know, I’ve been to a few of these as well when they have, sort of, broader participation and it’s the, kind of, informal discussions that can bridge some of those differences. So, I don’t see the necessarily, in terms of the G20 agenda, the EU necessarily being, sort of, you know, having a strong mediating role, mostly because I think the general thrust, they do actually already agree with the Americans. I think it’s really bringing China and potentially others onboard.
But just to, kind of, pick up, you know, and just to reiterate, the G20, if it wasn’t a forum, it’d have to be invented, because it is actually the case, you do need even countries that disagree with each other and are in some type of, you know, great power competition, you still have to co-ordinate globally important, you know, recoveries, global public goods, all of that is absolutely necessary. So I think, in many ways, if the G20 begins to falter and you’re no longer getting, you know, China there in particular, I think it is going to struggle, and the G7, actually, has been somewhat revived this year.
I think for many years, especially after the financial crisis, when the G20 really came to the forefront, was that the G7 was too narrow, it didn’t represent enough of the world economy. So the G20 does do that. So, you know, I think it may be that we’ll have to see how well hybrid participation can still achieve some of those things that can make breakthroughs, you know, ‘cause as we all know, the communiques get written well beforehand, except sometimes when you have last minute wrangling over language, but generally speaking, you know, when they get to these meetings, it is more about the relationships and then, you know, coming to breakthroughs on very key areas, and I think you actually probably do need to do that in person. But perhaps I misunderstand the power of, you know, of Zoom.
Creon Butler
Thank you very much indeed. Emma, again, your view on the EU. Obviously, alongside the US, they’re the other, you know, really major science and technology, vaccine production centre and so on. So, you know, what role do you see them in your – the immediate, kind of, health issues that you’ve highlighted?
Emma Ross
Yeah, I kind of agree with Linda, Creon, that the EU tends to be more closely aligned with the US than with China, and I don’t really see them as a, kind of, intermediary broker type to, kind of, break up the fight. They – within the pandemic, they – I think they’ve been struggling to find a leadership role on the global stage. There were, you know, early on, with – on the vaccine distribution, there was a chance for them to assert themselves, but I think there was so much going on within the EU, as far as allocation of the vaccine and which vaccines to go for and why did they leave it so late and – that they haven’t really managed to flex themselves and emerge as a global leader in this. So, I’m not quite sure how they would temper the US-China thing. Like the US, if it comes to intellectual property discussions, don’t even know if this is even going to come up, but I’m not sure they’d be a neutral broker on that either.
But to Harold’s question, as far as the minimum outcome to expect on health, I would say, for the G20 to be taken seriously as stepping up to this, I would think that commitments to share vaccine doses now, and that means giving timelines, not saying, “We will share,” but when, and it’s got to be timely, because it’s getting more and more desperate. And that probably means giving up contracts more than shipping doses, ‘cause once the vaccines are in your country, it’s much more – logistically much harder to ship them out, and then you’ve got expiry issues and stuff. It’s more about contracts and allowing the allocation to be diverted to where it’s needed. So I would say concrete commitments that are meaningful on getting vaccine doses. That is the loudest shout from global health experts and authorities on what is actually needed.
And the second thing, a minimum outcome, I would say money to support vaccine rollout in the countries that need this infrastructure investment. And that needs to be now as well, because they need to get ready for the anticipated supply surge, because I think the production capacity is there, there will be enough vaccines. It’ll be logistical and infrastructure once it’s in there, and that needs investment. So those are two things that I think the G20 could – I would say if we don’t get those two, we’d have to look at, you know, what have they really done for the pandemic?
Creon Butler
Well, thanks very much, Emma, and we’re almost – just got five minutes to go, and I want to take very quickly a further question from Christophe Sanger from the European Bank for Reconstruction and Development. And his question is, “Will digitalisation, including issues such as international data flows, data governance, and the competition, be on the agenda?” So, when I looked at the Presidency website, this wasn’t overtly there, in contrast to, say, the G7, where it clearly was. But on the other hand, it does link to all the things we’ve talked about, you know, in relation to health, you know, the pandemic recovery, climate change, the digital economy is crucial to all of these. But as far as I know, it’s not explicitly one of the outcomes, but in terms of a new digital governance framework or something of that kind. But, you know, we could be surprised.
What I’d like to do is take that point and see if any of my colleagues disagree with me on that, but also link it to another final question, which is really about the UK’s role. We’ve got, obviously, the UK, President of the G7, it’s also going to be chairing COP26 and I think the, sort of, one line question, what can we expect from the UK in the G20? And so, if I could quickly run around the three of you for what is a, sort of, 30 second to one minute answer on those combined questions. Any difference of view on digital and what can we expect from the UK? And perhaps we could go, let’s see, go to Linda first, then Antony and then Emma. So, Linda, you first.
Dr Linda Yueh
Thank you. Yeah, I think the G20 digital ministerial meeting have proposed some principles, but I don’t think that the leaders are going to be doing, as it were, the details. But I think the feeling is the – that behind the scenes because this issue is so critical, there is at least agreement on these principles. But having agreement on principles, as we know in the trade area, that’s just like saying, “We want to do something.” You know, the real work is really in the details.
And on the UK, I would suggest that the UK would be very keen to get the priorities it led in the G7 communique, to get those actioned by the G20, because the – this, kind of, plurilateral leadership that the UK has done with the G7, that’s only good insofar as it sets up something that all major economies can buy into. So I would say that’s probably going to be what we should expect from the UK, is really to use their Presidency to say, “These are the areas that we really need to get a global consensus on.” On the recovery, I mentioned the supply chain to deal with maritime issues, a consensus on how you manage, you know, co-ordination going forward, ‘cause they do have the pandemic preparedness, you know, focus there as well. So, I guess if you want a refresher, you can read the G7 communique, and that’s probably what the UK will be discussing in Rome.
Creon Butler
Yeah, that’s a very good answer, yeah. Antony, your quick response.
Antony Froggatt
Yeah, a quick response on digital, yeah, I don’t have a strong view. I agree with Linda, in terms of the G7 communique being really important for what the UK wants. Maybe just one other point to add, is obviously a lot of climate change is about domestic commitments, and so I think the UK’s been trying to demonstrate that, obviously, with releasing its net zero plan this week, trying to say, “Look, we’re not just talking long-term, we are putting in place domestic policies and measures to help us deliver that.” So, I think it will be probably drawing out some of those and saying, “Look, on heating, etc., we are walking the walk.” It’s still probably to be seen whether or not they really are, but at least they have a piece of paper that they can use to say, “We’re trying.” So, anyway, I think it’s a combination of the G7 agenda and what we’ve seen, in terms of the net zero plans.
Creon Butler
Yeah, absolutely. Linda, your – I’m sorry, Emma, your final, final thoughts on this question.
Emma Ross
Sure, I don’t really have anything to say about digitisation, that’s not really my area. But as far as what to expect from the UK? I think they’re likely to make all the right noises on vaccine equity and pandemic preparedness, and that includes lending their best Scientists and experts. I mean, for instance, in building capacity for genomic sequencing of viruses. That’s something we’re particularly good at, and likely to want to, you know, spread outwards. I am sceptical about the financial commitments, given that the UK has, much to the outrage of the global health community, slashed its ODA spending to below the 0.7% standard. So, not quite sure how the noises are going to translate into cash.
Creon Butler
Indeed. Well, I’m afraid that takes us out of time. It remains for me to thank our panellists for their really excellent contributions. It’s been – I’ve really enjoyed this discussion, and I really thank them for all their perspectives and insights. We will see how things go next week. I’d also like to thank our audience for being with us and for some really great questions. But until next time, thank you, and goodbye.
Emma Ross
Bye, thanks, Creon.
Antony Froggatt
Thanks, everyone.
