G7 Agree to Quit Coal in Power Generation by 2035

Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant powered by lignite, operated by Polish utility PGE, in Rogowiec, Poland, November 22, 2023. REUTERS/Kacper Pempel/File Photo Purchase Licensing Rights
Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant powered by lignite, operated by Polish utility PGE, in Rogowiec, Poland, November 22, 2023. REUTERS/Kacper Pempel/File Photo Purchase Licensing Rights
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G7 Agree to Quit Coal in Power Generation by 2035

Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant powered by lignite, operated by Polish utility PGE, in Rogowiec, Poland, November 22, 2023. REUTERS/Kacper Pempel/File Photo Purchase Licensing Rights
Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant powered by lignite, operated by Polish utility PGE, in Rogowiec, Poland, November 22, 2023. REUTERS/Kacper Pempel/File Photo Purchase Licensing Rights

Energy ministers from the Group of Seven (G7) major democracies agreed on Tuesday to end the use of coal in power generation during the first half of the next decade, but gave leeway to Germany and Japan whose economies depend on the fuel.

The agreement is a further step in the direction indicated last year by the COP28 United Nations climate summit to reduce use of fossil fuels, of which coal is the most polluting.

"It is the first time that a path and a target has been set on coal," said minister Gilberto Pichetto Fratin, who chaired the two-day meeting in a former royal residence near Turin, Reuters reported.

However, the G7 communique also included an alternative goal of phasing out coal-fired power plants "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net-zero pathways".

Limiting temperature rises to 1.5 Celsius (2.7F) above pre-industrial levels, scientists have said, can prevent the most severe consequences of climate change.

The caveat, according to sources who requested anonymity, was included to grant room for manoeuvre to Germany and Japan.

In view of the impact of Russia's invasion on Ukraine on Europe's fuel security, it also offers flexibility in case of a new, unexpected conflict, Italy's energy minister told the closing news conference on Tuesday.

Support from many governments for strong climate action has faded as economic weakness has made them focus on the immediate cost and it remains to be seen how Germany and Japan will move to reduce the use of coal, which produces more than a quarter of their electricity.

Germany has written into its legislation a final target to shut coal plants by 2038, while the current government has expressed the will to phase out coal by 2030, and Japan has not set a date.

German Economy Ministry State Secretary Anja Hajduk told Reuters Tuesday's deal was an important achievement.



World Bank Warns that US Tariffs Could Reduce Global Growth Outlook

WASHINGTON, DC - JANUARY 16: Workers build risers in Freedom Plaza ahead of the Inauguration on January 16, 2025 in Washington, DC. US President-elect Donald Trump and Vice President-elect former Sen. JD Vance (R-OH) will be sworn in on January 20. Kayla Bartkowski/Getty Images/AFP
WASHINGTON, DC - JANUARY 16: Workers build risers in Freedom Plaza ahead of the Inauguration on January 16, 2025 in Washington, DC. US President-elect Donald Trump and Vice President-elect former Sen. JD Vance (R-OH) will be sworn in on January 20. Kayla Bartkowski/Getty Images/AFP
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World Bank Warns that US Tariffs Could Reduce Global Growth Outlook

WASHINGTON, DC - JANUARY 16: Workers build risers in Freedom Plaza ahead of the Inauguration on January 16, 2025 in Washington, DC. US President-elect Donald Trump and Vice President-elect former Sen. JD Vance (R-OH) will be sworn in on January 20. Kayla Bartkowski/Getty Images/AFP
WASHINGTON, DC - JANUARY 16: Workers build risers in Freedom Plaza ahead of the Inauguration on January 16, 2025 in Washington, DC. US President-elect Donald Trump and Vice President-elect former Sen. JD Vance (R-OH) will be sworn in on January 20. Kayla Bartkowski/Getty Images/AFP

The World Bank on Thursday warned that US across-the-board tariffs of 10% could reduce already lackluster global economic growth of 2.7% in 2025 by 0.3 percentage point if America's trading partners retaliate with tariffs of their own.
Such tariffs, promised by US President-elect Donald Trump, could cut US growth - forecast to reach 2.3% in 2025 - by 0.9% if retaliatory measures are imposed, the bank said, citing economic simulations. But it noted that US growth could also increase by 0.4 percentage point in 2026 if US tax cuts were extended, it said, with only small global spillovers.
Trump, who takes office Monday, has proposed a 10% tariff on global imports, a 25% punitive duty on imports from Canada and Mexico until they clamp down on drugs and migrants crossing borders into the US, and a 60% tariff on Chinese goods.
The World Bank's latest Global Economic Prospect report, issued twice yearly, forecast flat global economic growth of 2.7% in 2025 and 2026, the same as in 2024, and warned that developing economies now faced their weakest long-term growth outlook since 2000, Reuters said.
The multilateral development bank said foreign direct investment into developing economies was now about half the level seen in the early 2000s and global trade restrictions were five times higher than the 2010-2019 average.
It said growth in developing countries is expected to reach 4% in 2025 and 2026, well below pre-pandemic estimates due to high debt burdens, weak investment and sluggish productivity growth, along with rising costs of climate change.
Overall output in emerging markets and development economies was expected to remain more than 5% below its pre-pandemic trend by 2026, due to the pandemic and subsequent shocks, it said.
"The next 25 years will be a tougher slog for developing economies than the last 25," World Bank chief economist Indermit Gil said in a statement, urging countries to adopt domestic reforms to encourage investment and deepen trade relations.
Economic growth in developing countries dropped from nearly 6% in the 2000s to 5.1% in the 2010s and was averaging about 3.5% in the 2020s, the bank said.
It said the gap between rich and poor countries was also widening, with average per capita growth rates in developing countries, excluding China and India, averaging half a percentage point below those in wealth economies since 2014.
The somber outlook echoed comments made last week by the managing director of the International Monetary Fund, Kristalina Georgieva, ahead of the global lender's own new forecast, to be released on Friday.
"Over the next two years, developing economies could face serious headwinds," the World Bank report said.
"High global policy uncertainty could undercut investor confidence and constrain financing flows. Rising trade tensions could reduce global growth. Persistent inflation could delay expected cuts in interest rates."
The World Bank said it saw more downside risks for the global economy, citing a surge in trade-distorting measures implemented mainly by advanced economies and uncertainty about future policies that was dampening investment and growth.
Global trade in goods and services, which expanded by 2.7% in 2024, is expected to reach an average of about 3.1% in 2025-2026, but to remain below pre-pandemic averages.