Summary of economic issues in G7 communiqué
On June 28, 2022, the three-day group of seven (G7) summit came to an end in Elmore castle, Bavaria, Germany. It was a conference whose agenda focused on the situation in Ukraine, climate change, inflation, fighting hunger and poverty, health policy, infrastructure and investment, security policy and energy crisis. In addition to the final joint communiqué, the G7 meeting also issued several independent statements on Russia Ukraine issues, food safety, climate club and so on. These more complicated documents also show the complexity of the current international situation. This paper summarizes the economic issues in G7 communiqué, which are eliminating unnecessary trade barriers and significantly increasing sales of electric vehicles.
Sustainable Development
A full 12 pages of the 28-page communiqué were placed under the topic of sustainable development, particularly on climate change, energy transition and environment, indicating the high priority given to sustainable development at the meeting. The G7 leaders reaffirmed their commitment to the Paris Climate Agreement, stressing that they will take effective measures to meet the Nationally Determined Contribution to Climate (NDC) target and will help developing countries set up emission reduction targets and long-term strategies through contributions to multilateral funds or bilateral support.
G7 leaders pledged to continue to coordinate the most appropriate economic and fiscal policies to support carbon reduction in an efficient, effective and equitable manner. The transportation sector will be the most important direction for emissions reductions, with leaders pledging to significantly increase the sales, share and use of zero-emission light-duty vehicles, including zero-emission public transport fleets, by 2030.
At the same time, G7 leaders stressed that petrochemical fuel subsidies are inconsistent with the objectives of the Paris climate agreement. Therefore, the meeting reaffirmed the commitment to eliminate inefficient fossil fuel subsidies by 2025. The G7 leaders also introduced the concept of a “climate club” and hope to complete the establishment of the organization within the year.
In the context of the G7’s efforts to reduce Russia’s fossil fuel dependence, in this communiqué G7 leaders also stressed that the energy transition and biodiversity goals will not be changed because of related sanctions.
On the issue of high oil prices, the G7 countries agreed to a concerted strategy of increasing production and called on other countries to do the same. the G7 countries will continue to explore ways to reduce Russian fossil fuel revenues and welcomed the EU’s attempts to introduce import price restrictions. In addition, the G7 countries are considering additional measures to suppress Russian oil prices, such as prohibiting service providers in industries such as crude oil transportation from providing necessary services to Russia if the price of crude oil is higher than the current price.
G7 countries at the same time stressed that in the context of reducing thermal coal power generation and Russian energy dependence, increased deliveries of LNG would have an important role in the current situation, calling for increased investments in related areas.
In addition to electric vehicles and LNG, G7 leaders also emphasized and confirmed the centrality and strong financial support for renewable hydrogen energy (and derivatives) and zero-emissions thermal power generation. the G7 countries will increase electricity generated from renewable sources, as well as the use of renewable energy in all sectors, and break down related barriers.
Some of the participating countries also mentioned the application and development of advanced nuclear power technologies, but at the G7 level special emphasis was placed on the need for nuclear power to meet public safety prerequisites.
Economic Stability and Transformation
Economic and trade issues were also the focus of the talks as the rest of the G7 countries, except Japan, are basically experiencing crisis-level inflation.
The G7 leaders stressed that countries will continue to eliminate unnecessary trade barriers, including opposing trade restrictive measures and reforming the WTO. the G7 welcomed the outcome of the WTO ministerial meeting and looked forward to advancing the e-commerce tariff negotiations and closing the fisheries negotiation gap in subsequent WTO talks.
On supply chain issues, the G7 said it would strengthen industrial cooperation, understand the vulnerability of supply chains and enhance the security of supply of key products, especially key raw materials and key minerals, and asked the relevant departments of each country to strengthen the work of key mineral supply chains.
In the context of low carbon and digital transformation, G7 countries also pledged to spare no effort to train adults of all working ages to meet the needs of a changing workforce.
In the communiqué, G7 leaders also mentioned their commitment to invest $600 billion in “quality infrastructure” over the next five years. But in this case, the focus of attention is on the amount, which is more than an order of magnitude worse than the $40 trillion shouted at last year’s G7 summit in the United Kingdom and the vast majority of which will be borne by the private sector.
According to the communiqué, the next G7 leaders’ summit will be held in Hiroshima, Japan.
By Josie
