G8 Reaches Seminal Climate Change Agreement

Climate change and trade figure prominently on this second day of the G8 summit in L'Aquila, Italy as leaders of the world's most powerful economies expand talks to take in counterparts and representatives of major emerging economies. Summit host, Italian Prime Minister Silvio Berlusconi welcomed world leaders for a second day of discussions in L'Aquila.

The agenda items are much the same - the global economic crisis, the environment, climate change and trade. But, Thursday's talks were expanded from the G8 group to include the so-called G5 nations of major emerging economies - China, India, Brazil, South Africa and Mexico. But others were invited to the table as well, along with international organizations.

On climate change, G8 leaders agreed Wednesday on new targets to limit greenhouse gas emissions and try to limit global warming to just two degrees centigrade above pre-industrial levels. In announcing that decision, Prime Minister Berlusconi spoke of the need to bring other countries into the process, especially India, China and Brazil. It would be counterproductive, Mr. Berlusconi said, if the United States, Europe, Canada and Japan implement strategies to cut emissions if other countries do not.

G8 leaders have said the group wants to be inclusive and bring other nations into discussions on global issues. The move is also widely seen as an increasing understanding that while G8 members may be the world's most powerful nations, they cannot solve issues such as the global economic crisis or climate change without the help of others.

Source: http://www.voanews.com/english/2009-07-09-voa6.cfm

Tags: Silvio Berlusconi, G8, G5, Climate change agreement, China, India, Brazil, South Africa , Mexico, L’Aquila, United States, Europe, Canada, Japan, Global Development News, Greenhouse gas limit targets, 2 degrees Celsius above pre-industrial temperatures,

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World Bank Cuts 2009 Global Growth Forecast

The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty.

"The global recession has deepened," the Washington-based multilateral lender said in a report.

Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent — but excluding relatively strong China and India, developing economies will contract by 1.6 percent.

The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record. Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report, issued Sunday in Washington.

"Unemployment is on the rise, and poverty is set to increase in developing economies," it said. The global economy should start to grow again in late 2009, but "the expected recovery is projected to be much less vigorous than normal," the report said. It said banks' ability to finance investment and consumer spending would be hampered by the overhang of unpaid loans and devalued assets.

"To break the cycle and revive lending and growth, bold policy measures, along with substantial international coordination, are needed," the World Bank said. Investment and other financial flows to developing countries plunged by an estimated 39 percent in 2008 to $707 billion, the World Bank said. It said foreign direct investment in developing countries is projected to drop by 30 percent this year to $385 billion.

Eastern Europe and Central Asia have been hit hardest and the region's gross domestic product is expected to plunge by 4.7 percent this year, the bank said. It said growth should recover next year to 1.6 percent.

GDP in Latin America and the Caribbean should shrink by 2.3 percent this year before rebounding to expand by 2 percent in 2010, the report said. In the Middle East and North Africa, growth is expected to fall by half this year to 3.1 percent, while that of sub-Saharan Africa will drop to 1 percent from an annual average of 5.7 percent over the past three years, the bank said.

East Asia should post a 5 percent expansion, supported in part by China's stimulus-fueled growth, the bank said.

Source: http://www.mercurynews.com/business/ci_12663954?source=email

Tags: World Bank, GDP, Investment, Credit, China, India, Eastern Europe, Central Asia, Caribbean, North Africa, Global Economic News, Developing Economies, Global Trade, Global recession, Unemployment, Global Development News, Global Blog Network, Economics,

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