IEEJ：June 2021 © IEEJ 2021
Special Bulletin
A Japanese Perspective on the International Energy Landscape (536)June 10, 2021

Significance and Importance of G-7 Summit Changing in Response to Global
Situation
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanThe Group of Seven industrial democracies will hold an annual summit in Cornwall of theUnited Kingdom on June 11-13. In addition to the top leaders from Japan, the United States, theUnited Kingdom, France, Germany, Italy and Canada, those from the European Union, Australia,India, South Korea and South America will participate in the 2021 G7 summit to discuss security, theglobal economy, climate change and other global issues. Since the first summit of major countries
took place in France in 1975 to address the oil crisis and economic turmoil, then the most serious
issues, the summit has been held annually. Participating in the first summit were Japan, the UnitedStates, the United Kingdom, France, Italy and West Germany. Canada joined the six in the secondsummit. Since then, the annual summit of major countries has discussed the then most important
global issues such as responses to the Soviet Union’s collapse, international terrorism, the Middle
East situation, oil price spikes, climate change and Lehman Brothers’ failure that triggered a global
financial crisis. How these advanced economies should cooperate in tackling these issues has beenquestioned at the annual summit, attracting global attention.
Looking back into history, however, we find that the positioning of the G7 summit haschanged over time. First, the relative importance of the seven advanced economies for the world hasdeclined. In 1975 when the first summit took place in response to the first oil crisis, the summit
participants had a great presence in the global economy. The six advanced economies then accounted
for 55% of global oil demand, indicating their important position. As China and other emerging
market economies have gained power with the passage of time, however, the seven advanced
economies’ position has relatively declined. Their share of global oil demand has fallen to 30%.
Even at present, the seven countries still lead the global economy, including the United States as theworld’s largest economy, Japan as the third and Germany as the fourth. However, they have lost their
dominant position seen in the past. Reflecting the realities, these advanced economies formed theGroup of 20 as a new international framework together with important emerging market economies
and resource-rich countries including China, India, Brazil and Saudi Arabia. However, thediversified G20 members have had numerous conflicts of interests, indicating that it is difficult forthem to be united to address any issues.
The G7 expanded into the G8 in 1998 as Russia joined the Western democracies in thewake of the collapse of the Soviet Union to cooperate in addressing their common challenges. In
2014, Russia was expelled from the group for annexing Crimea following its conflict with Ukraine.
Under the Trump administration, the United States as the world’s largest economy and military
power downgraded the G7, leading the unity and significance of the G7 to be called into question. In
2020, the annual in-person G7 summit failed to be implemented for the first time since 1975 due tothe spreading COVID-19 pandemic and turmoil following the U.S. presidential election, although
two online G7 summits were held to cope with the COVID-19 pandemic.
However, the imminent G7 summit is attracting global attention in a new global situation.
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In the new situation, the U.S. Biden administration has dramatically changed Washington’s attitude
towards the G7 from the previous administration. Former U.S. President Donald Trump advocatedthe “America First” foreign policy without being interested in G7 and other multilateral talks,retaining a unilateralist approach. Under the Trump administration, the United States’ relations with
its European allies soured, leading the 2019 G7 summit to demonstrate disagreement. Then, the G7
gave up on adopting a leaders’ declaration for the first time. However, incumbent President Joe
Biden has pursued an international cooperation policy emphasizing U.S. allies, differentiating
himself from his predecessor in the international arena. It may be natural for the G7 summit
including the new U.S. president to attract global attention.
The imminent G7 summit is expected to deal with global issues including COVID-19
countermeasures, security and diplomacy, the global economy, trade, finance and climate change.
Global attention will focus on how the G7 countries would be united to cope with these key issues.
Although all these issues are extremely important, I see how to deal with China regarding security
and diplomacy and G7 leaders’ discussions on climate change as particularly important from “aJapanese Perspective on the International Energy Landscape.”
As the G7 countries share growing cautions against China’s hegemonistic behavior andcriticisms against and concerns over Hong Kong, Taiwan and Xinjian Uyghur issues, these Western
democracies are expected to agree on their united critical view of China. The G7 leaders are likely todiscuss how best to reform or rebuild supply chains for strategically important goods and materials
from the viewpoint of economic security. Given that the G7 countries engage with the Chinese
economy to various degrees, however, their discussions and conclusions will attract attention. Under
the current situation called a “new U.S.-China cold war”, the United States under the Biden
administration basically plans to enhance its strategy against China while emphasizing relations with
its allies and cooperating with other countries that share universal values with the United States.
After emphasizing economic relations with China until recently, European countries are deepening
their concerns over China due to human rights and democracy issues. In this sense, discussions on
China issues are likely to be highlighted at the imminent G7 summit.
As Western advanced economies demonstrate their united critical view of China, its
reaction and counterstrategy could invite global geopolitical tensions to grow. China may rejectanti-China criticisms based on its core interests, and the use of human rights or democracy as serious
interference with its internal affairs. China may embark on a diplomatic strategy that would enhance
its strategic relations with Russia confronting Western democracies, maintain and expand its
influence in Central Asia, the Middle East and other geopolitically important regions and drive awedge between Western powers and major countries in these regions. What attitude the G7 countries
would take against China at the summit and how China would react and respond to the Western
attitude would exert great impacts on the global geopolitical situation. We will have to closely watch
future geopolitical developments regarding China as one of the most important factors for theinternational energy situation.
Another important point regarding the G7 summit is the direction of discussions on
climate change. As major countries have announced their carbon neutral targets since last year, aglobal trend of enhancing decarbonization initiatives is accelerating. At the G7 summit, participants
may reaffirm the enhancement of their carbon neutral initiatives and discuss global decarbonization
measures. Advanced economies will play key roles in promoting leading-edge decarbonization
initiatives and developing and diffusing innovative technologies for such initiatives. They may berequired to take leadership in global decarbonization by making maximum efforts to achieve theirrespective 2050 carbon neutrality targets. It is hoped that the G7 group would seriously consider a2

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strategy that would avoid undesirable problems such as the intensification of the North-South
confrontation and give due heed to realities in developing and resource-rich economies. If advanced
economies exert excessive pressure on developing, emerging market and resource-rich economies topromote decarbonization initiatives, the latter may take such pressure as coercive and reignite an
earlier argument holding advanced economies responsible for climate change, shaking the inclusive
international framework based on the voluntary and bottom-up approach that produced the ParisAgreement. It may be needless to say that the comprehensive and early implementation of climatechange countermeasures would serve global interests. Leaders of advanced economies are required
to propose a path for global cooperation in the implementation. Any unnecessary North-South
confrontation should be avoided from the strategic viewpoint of the geopolitical situation regarding
China.

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