Economic materiality is the basis of all new macro-economic policy initiatives and such materiality can be established in a number of ways. In the case of strengthening international institutions after a global shock, establishing materiality can be accomplished through analysis of the changes in financial flows within international institutions. Development of proposals to strengthen these institutions can then occur on the basis of a clear diagnostic of the impact of these shocks. Alternative scenarios can then be modeled and solutions can be tested and prioritized on the basis of agreed to principles. The same is the case for the industries made up of regulated private-sector firms. Financial flows are transparent and modeling 'repair' or alternative scenarios can be accomplished once consensus has been established on materiality and the need to avert past or possible future risky scenarios.

The role of international governance innovation for growth is more complicated. This is in part because growth plans are inherently national rather than international. By virtue of its national focus, innovation in international governance should favour peer review and benchmarking as a vehicle to spur macro-economic innovation. For example, for the global macro-economic priority to spur growth via investment, peer review of country-specific strategies to boost investment is more likely to review reveal new areas of economic materiality in one country that have not yet been considered in another.

Barriers to finance for SMEs are one case in point. For example, one jurisdiction may establish growth plans based on innovative macro-economic reporting of SME economic activity such as SME export value or SME investment in innovation. As a result of innovative national-level reporting, other jurisdictions can benefit from this insight and consider materiality for their economy. It could therefore be argued that in the case of growth, international governance innovation could begin with national macro-economic innovation which is nested within global joint-working and benchmarking mechanisms.

Establishing priorities for such macro-economic innovation and exploration might be grounded in consultations with the private sector to establish hypotheses on economic materiality. Such an approach would make governance innovation a more open process and would open a channel to new lines of sight to uncover economic materiality and therefore channels for growth policy development to stimulate employment and mitigate inequality. Two areas which would appear to be material but as yet not explored are environmental goods and the role of SMEs in global trade.

A transparent approach to exploring as yet undiscovered areas of economic materiality would contribute to innovation to global governance priorities where current approaches are not yielding desired growth results.

There has been little to no progress on the issues identified above. Despite a continuing decline in prospects for global economic growth, there has been no effort to address the failure of the Brisbane Action Plan to accelerate growth prospects.

The IMF has gotten a lot of credit over the past year for standing up to Europe in the euro zone crisis, by publicly insisting that Greece’s European creditors should give the country more debt relief. The IMF’s stance on this issue has by and large been commendable, and goes some distance toward rectifying the Fund’s subservience to Europe earlier in the crisis, which inflicted considerable damage on the Fund’s reputation and exacerbated its governance problem.

However, one series of recent events in the crisis threatens to cause further harm to the Fund’s ability to fulfill its international responsibilities, in ways that have gotten little notice in the public debate. I am referring to the fact that Greece failed to pay some of its obligations to the Fund on time, and came within a whisker of defaulting on a much more massive scale in mid-July when marathon negotiations over the terms of a new Greek bailout nearly broke down. The IMF’s loans to Greece are by far the biggest it has ever extended to any single country, and this episode cast into unprecedented doubt the Fund’s previously unquestionable ability to recover the money it lends. This could well make it more difficult in the future for the IMF to raise money from member countries. If that happened, the world might be deprived of an institution with the capacity to serve as a crisis fighter and manager.

On the positive side, China’s efforts to integrate its financial system into the global economy raises hopes for better cooperation. On the negative side, the state of dysfunction in the U.S. Congress continues to weigh heavily on prospects for any meaningful collective action. Europe continues to be hamstrung by its failure to resolve the debt overhang in Greece. In spite of these challenges, the G20 forum seems to be strengthening its role and encouraging greater macroeconomic cooperation, including between major creditors and debtor countries outside the G20.

World economic outlook has worsened, specifically in Europe and emerging markets, while macroeconomic policy cooperation has stalled or regressed. The mention of peer review within the G20 Finance Ministers Ankara meeting communiqué is encouraging, but too vague to change the assessment. The same can be said of the communiqué statement about continuing ‘to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability’.

If the criterion to judge progress is expectations, the prospects are poor. In early September, G20 Finance Ministers described prospects for 2015 as disappointing. We still face the prospect of competitive currency devaluations. Progress on Sovereign Debt restructuring is disappointing – the Greek case being a perfect example of a “snow plow” approach to avoid.

I think it was significant that G20 finance ministers and central bankers in September emphasized that monetary policy alone couldn’t achieve satisfactory economic growth. That said, a year after the G20 pledged to boost GDP, global growth actually slowed. Global institutions also apparently saw no need to even explain the chaotic monetary policy that came with the start of 2015. Confusion reigned, and global leaders did nothing about it.

Failures to address quotas and take major steps in the area of sovereign debt are at best embarrassing.

There is minimal progress on the issue of sovereign debt restructuring. The new terms suggested by the International Capital Market Association and endorsed by the IMF constitute an improvement over some important dimensions of sovereign debt restructuring, but they leave unresolved a variety of important problems, and create other problems (as making strategic sovereign defaults more likely).

Representativeness of emerging economies at the IMF is still weak.

There are still serious deficiencies in terms of cooperation of fiscal and monetary policies among the advanced economies.

Progress towards the Brisbane Growth Strategies has not been encouraging. My quantitative assessment reflects the fact that, while my expectations were, admittedly, not high, failure to follow through on commitments in a meaningful way could undermine the credibility of the system and weaken commitment to international cooperation. I view this as a risk going forward, as cyclical positions of key economies diverge (U.S. and euro zone) and others grapple with significant adjustment challenges (e.g., China).

Paradoxically, the one bright spot is sovereign debt restructuring. The Greek debacle has shown just how far key policy makers are from grasping the importance of debt sustainability, but the IMF has shown its willingness to "grope" its way through the fog of uncertainty towards a sensible position on unsustainable debts.

The Brisbane Growth Strategies provide a blueprint for an ambitious goal of lifting G20 GDP by more than 2 percent, as well as a specific and feasible action plan to promote economic growth and to create job opportunities. The initiative of a four-year infrastructure hub is crucial for bridging the growth gap between developing countries and developed nations. There is also minimum policy cooperation among G20 members in terms of macroeconomic and structural policies. However, the 2010 IMF Quota and Governance Reform still remains delayed. While the Managing Director of the IMF, Christine Lagarde and other member countries, except for the United States, talked about an alternative plan to push the reform, no concrete measures or schemes were discussed.

After a few years of skirmishing and anticipations, it looks as if there is a full blown process of competitive devaluation, or in other words currency wars. The IMF governance reform at the same time is stymied.

Events lead me to conclude that the status quo applies here. Two examples support this view.

On the positive side, dialogue and communications remain critically important. The US Federal Reserve has made considerable effort to communicate its thinking about the state of the US economy and the implications for monetary policy. Its “data dependence” message has been made clear. While for some this may not map as clear a policy path as they might wish, it has given considerable heads up to countries and monetary authorities, including in developing economies, to prepare for an eventual increase in US interest rates.

While technically not a form of international monetary “cooperation”, the Fed’s efforts to be clear about its thinking provides important input to others as they think through and address their respective challenges.

Countering this is the continued muddling of the role of the IMF in Europe. Debt sustainability remains a critical issue, and despite the IMF’s clear analysis about debt sustainability in Greece its political presence continues to undermine its credibility, and that of global governance reform more generally.

The international use of the Chinese currency, renminbi, continues to develop rapidly, which further diversifies the international monetary system and reduces its inherent vulnerability known as the "Triffen dilemma". Moreover, the burgeoning of international financial institutions centered in emerging markets, such as the Asian Infrastructure Investment Bank and the New Development Bank, increases the pricing power of these regions and partially rectifies price distortions in international trade. However, this new type of international monetary cooperation is still at its early stage and full of uncertainty.

Thus far in 2015 macroeconomic developments have been dominated by uncertainties: for example, in the euro zone because of the continuing severe sovereign debt problems of Greece; and in China because of concerns over output growth prospects, high volatility in domestic equity markets and investor concern that banking system stability is being eroded by a large and growing portfolio of non-performing loans. In the face of these challenges coordination of macroeconomic policies appears, if anything, to have weakened somewhat over the course of the year. Not surprisingly, no major countries have shown a willingness to adjust their policies with a view to strengthening the global macroeconomic outlook. Policy uncertainty has also been added by the reluctance of the US Federal Reserve to begin normalizing its policy interest rate from the current highly accommodative level to a more neutral stance, despite the recent strengthening trend of growth and employment in United States economy.

There is certainly a willingness to cooperate on macroeconomic issues, especially economic growth; however, the reality is that not much is happening on that front. There is no common attempt to reboot global economic growth at the G20, despite the rhetoric. In terms of monetary cooperation, there is nothing happening on that front from what I can observe. China has decided to unilaterally devalue its currency, which seems to have caught everyone by surprise. The euro zone and the US are continuing with monetary easing although there have been indications, at least in the US, that it would come to an end very soon. There are certainly no coordination attempts here. Finally, IMF reforms and sovereign debt restructuring also seem to be stuck, even if negotiations are ongoing.

Cooperation among established multilateral organizations has been static, with little to no progress in macroeconomic policy governance and collaboration.

While the international multilateral institutions hold a great responsibility to ensure a crisis the magnitude of the last does not occur again, we must also invest our efforts in growth as well as stability. Beyond addressing sovereign debt restructuring with a new strong framework, efforts are lacking in the inclusion of emerging economies and the development of ways to meet concrete targets. Greece stepped dangerously close to the edge of a financial cliff recently, exposing an unresolved debt situation that has lingered for several years now.

The IMF Quota Reform process remains delayed, providing further indication of a stagnant environment in macroeconomic coordination.

The Turkish G20 presidency has expressed macroeconomic priorities of investment, employment, and trade, with a focus on small and medium enterprises. It remains to be seen what will come out of this year’s G20 summit.

Over the past year, international macroeconomic and monetary cooperation has been tested by the challenges raised by diverging monetary policies in the advanced economies. Although the risks caused by both continued monetary accommodation in several countries (notably in Europe) and tightening in the US have been carefully identified and clearly discussed by the BIS and the IMF among others, there are few signs that effective action has been taken by policymakers to dispel the specter of currency wars and financial market instability.
Furthermore, the escalation of the Greek crisis during the summer further attests to the problems in international macroeconomic cooperation. Although the Greek crisis is primarily a European problem, its potential spillover effects for international economic growth cannot be easily dismissed. From this perspective, the international community has largely failed to put pressures on European partners to address the Greek crisis in a timely and effective manner.

In 2014-15, the support for growth in most advanced economies mostly comes from the monetary policy, while fiscal policy contributes to a small extent, since sovereign debt has not decreased (i.e. EU, Japan). The Greek crisis, started in 2010, has not been yet fully addressed or solved by domestic authorities; structural reforms have not been implemented, and stagnation continues. After the missed payment by Greece to the IMF in June 2015, the EU and the ECB have tried to find a different exit strategy, with very poor results.. Risks far exceed benefits for European countries.

The G20 remains a strange forum for global cooperation outside of crisis conditions. In non-crisis conditions, it clearly has yet to prove itself. Let’s take the main sub-headings for its efforts in the macroeconomic area.

Support for global economic growth and employment and mitigating inequality: this is probably the macroeconomic subheading where the most obvious effort has been made—in the form of the Comprehensive Growth Strategies for each country and target for raising global growth by 2 percentage points by 2018. The strategies mostly include some degree of detail on the gist of policy changes, but not really enough to make the full-scale assessments easy or particularly meaningful to do. The effort is not without merit, but one must hope that this is not an exercise that takes up valuable time of technocrats and that is more of a sales job than a substantive consideration of policies. The jury is still out on the strategies.

IMF Quota Reforms and Inclusion of Emerging Economies: the critical path here is US approval of the quota increase and reform. Realistically, the G20 can join the chorus of those chastising the US, but is unlikely to be better positioned than the many other institutions attempting to goad the US into action.

Accountability, inclusiveness, and effectiveness of IMF governance: Again, the G20 can join the chorus of critics, but has no particular leverage or position on this issue.

Sovereign debt crisis resolution: The IMF has a good proposal on the table for improving its mandate to address severe sovereign debt crises quickly and efficiently. It is not clear what the G20 has to add to this. The impediment to progress is all political—once again owing to the reluctance of the United States—and must be resolved within the IMF.

Surveillance under current frameworks (MAP, IMF surveillance) and commitment to appropriate domestic fiscal and monetary policies to foster stability in the international monetary system. Once again, outside of crisis conditions when the G20 can be an exceptionally effective forum, it is not clear what the G20 brings to these issues (in terms of either analysis or international dialogue) that the IMF does not have within its own structure.

In short, in the area of macroeconomic management the G20 has yet to find a distinct role for itself. A critical question is: how can the G20 remain a viable forum for the few (mainly crisis) conditions when it is truly useful while not, in calm periods, indulging in efforts that overlap with those of other institutions. Unless an answer to this question is found (at least as it relates to macroeconomic policy), the risk is that the G20 extinguishes itself or becomes a burden that actually impedes the success of other established institutions.

The temporary withdrawal or washing of hands in the Greek debt situation as well as the failure to implement meaningful changes in IMF governance represent setbacks. Finally, the air in the room is slowly but surely being sucked out because of the looming US general election in 2016. The G20 meetings continue to suffer from a lack of continuity. Each time a new Presidency takes over the clock, so to speak, is reset.

The tortuous handling of the Greek debt crisis showed serious limitations of financial cooperation in the euro zone and came close to Greece exiting the common currency. However, for now the crisis has been more or less kept under control. Countries remain far apart on how to improve sovereign debt crisis restructuring with the global south trying to work out a framework under the UN, while the global north prefers the IMF as the reform platform.

Little progress has been achieved in policies to promote growth and mitigate inequality; the same applies to IMF governance (with quota reform still pending), sovereign debt resolution, G20 and IMF surveillance, with no macro commitments among major countries/regions to foster stability in the international monetary system.

The G20 has had a number of discussions, and there are some improvements in the policy coordination between developed countries.
The Fed’s currency swap agreements with the other 5 countries certainly have reduced the financial risks caused by lack of liquidity, but the divide between the G6 (or C6) and the rest is worrying.

From China’s perspective, improvements in boosting confidence and reducing vulnerabilities through the implementation of effective macroeconomic policies and structural reforms by the G20 are very limited, if at all. Would the Fed really take a developing country’s economic realities into consideration when deciding at what point it should exit from QE?

The frustration felt by developing countries is very deep, and it is pushing them to do something outside the G20 framework.

The delay in full and consistent implementation of reformed regulatory frameworks is cause for concern. If the delay in implementation is due to a need of greater political degrees of freedom, there may be a case for establishing a communication channel with civil society (e.g. Global NGOs for whom financial reform is a priority) to establish a public constituency for implementation of reforms. Civil society actors may be able to remove the barriers to implementation by communicating before and after regulatory scenarios and their impact on society. Public understanding of the risks of not moving forward may remove non-technical impasses and ease implementation by doing some of the heavy lifting to shift the political landscape.

There have been some localized threats to financial stability, and in a deteriorating world economic outlook many economies remain vulnerable, though international coordination and cooperation on financial regulation and related issues has not regressed.

While there have been some discussions and movements, it is important to question the effectiveness of what has been done.

Some progress seems to continue to be made, largely reflecting the institutional momentum of the process. Questions can be asked, however, whether the right issues are being addressed (shadow banking?) or are we like generals fighting the last war.

An updated roadmap for dealing with shadow banking has been provided and work is ongoing to achieve it.

There are substantial doubts as to whether Basel III represents the best analytic framework.

Here I would argue for the status quo based on events of the past year. While one can point to continued momentum in a number of important areas, slippage or less progress than expected can be pointed to in other areas.

Broadly speaking, the work plan of the G20 and the FSB has had two streams: (i) enhancing the resilience of the global financial system; and (ii) having a credible resolution mechanism.

A great deal has been done since 2008 to strengthen the resilience of the global financial system, making it much safer as a result. But while the probability that a systemic financial institution will fail has been reduced, we have not eliminated it. A number of cross-border issues remain unresolved, and there is need for greater confidence that countries will live up to their commitments. We also need to ensure that there is sufficient total loss-absorbing capacity (TLAC) in the system.

Similarly, the resilience of core markets, and related cross-border issues, is far from complete. And the importance of regulation and supervision of the shadow-banking system has really only just begun to be tackled.
China in all this remains an unanswered question. Its shadow-banking system operates quite differently from that, say, in North America. And more generally, gauging the resilience of the Chinese financial system is far from transparent.

The Basel III capital standards have been gradually implemented in emerging market economies. However, the problem lies in how to regulate the shadow banking system. In these regions, monetary policies are greatly influenced by their governments' economic growth concerns and can hardly be treated as independent. This makes their financial markets greatly distorted, and rating the quality of corporate and municipal equities in emerging market economies is extremely difficult.

Coordinated by the Financial Stability Board, financial regulators have continued to make progress in elaborating the design of the G20’s seven-year initiative to reform the global architecture of financial regulation. Nevertheless, many lacunae remain to be addressed in order to complete the design. For example, in the runup to the G20 Antalya Summit it will be crucial to obtain the empirical results for the quantitative impact assessments of the proposed new rules for total loss absorbing capital of global systemically-important banks and other financial institutions. But even if this goal is met, the main challenge in achieving the G20 leaders’ ambitious financial regulatory objectives will be to ensure internationally harmonized implementation of key financial regulatory reforms across G20 member jurisdictions.

The FSB continues to perform its coordinating work as best as it can, given its lack of enforcement capability and small secretariat. It continues to pushes for regulation into new areas like shadow banking. So progress continues to be made but the main issue remains the "complete and consistent" implementation of international standards at the domestic level, though monitoring by the FSB and IMF helps identify inconsistencies.

In the last year there have been signs of minimal progress in international coordination on financial regulation. Financial regulators continue to work towards a number of critical reforms, but a number of key targets have not been met yet, including the G20 agenda to reform over-the-counter derivatives by 2012.

Shadow banking reforms remain behind schedule but work is ongoing. The Turkish G-20 presidency has prioritized finalizing the regulatory framework with the goal of full and consistent implementation during their Presidency. The FSB is particularly concerned with the slow and uneven implementation of reforms to OTC derivatives markets, including transaction and trade reporting, as well as central clearing and organized platform trading for standardized transactions.

The IMF reform package endorsed by the G20 leaders in Seoul in November 2010 remains on ice as US Congress has not ratified it yet.

The implementation of financial regulation, especially for OTC derivatives, lacks behind the schedule settled by the G20 in 2009; the complexities of the global financial system constitute a structural barrier toward a homogenous implementation of common rules. However, political frictions can explain much of the situation, e.g. in the US where the Dodd Frank Act lies largely on paper and has been implemented to a very limited extent, and in Europe where Eastern European countries cannot entirely match the strict European regulatory requirements. Nevertheless, the Greek crisis, still not solved when writing, and its difficult political solution represents an obstacle toward the complete realization of the banking union, and of the European banking and financial vigilance.

The FSB continues its work but how effective their efforts are remains to be seen as countries seek implementation delays or sovereign regulatory imperatives trump international cooperation.

Authorities have continued to tweak banking regulations beyond Basel III, and to develop rules regarding futures and other derivatives, including trying to find ways to use the huge amounts of derivatives trade data that have been collected.

Progress is being made but remains slow. European banking union and the launch of capital markets union are major steps forward, but they need to be coordinated with other G20 initiatives regarding Basel III capital standards, intra-regional and international regulatory coordination, efforts to reform OTC derivatives trading, and efforts to regulate shadow banking.

From my view, for international finance system, there is little progress in IMF reforms. Although the platform of G20 has appealed many times for US to facilitate the IMF reforms, especially for the quota increase, there is no positive feedback. There is also uncertainty for the renminbi’s entrance into SDR basket. Emerging countries are still underrepresented in voice and influence, not only within the IMF but also in the World Bank. That’s why AMRO, the BRICS bank, AIIB and other new institutions are emerging. In this way, however, the global governance is split into regions or groups.

From China’s perspective, the Financial Stability Board (FSB) and Bank for International Settlements (BIS) have done many useful things, which are helpful for developing countries. By introducing good standards and norms, which are based on the experience of developed countries and crystalized and championed by international bodies such as FSB and BIS, developing countries are able to improve their financial stability. China has benefited from their works. But some of the international and domestic regulatory reform agendas, such as the reform of over-the-counter derivatives, the enhancement regulatory and supervisory regimes, may not be that relevant to developing countries because of differences in stages of financial development. For example, China has its own shadow banking problems. But these problems are very different from those in developed countries and China has to figure out how to solve these problems by itself.

On the other hand, the international community should do more in some other areas such as money-laundry and tax havens. Free movement of capital should not be abused to damage a country’s financial stability. Without international coordination, it is impossible to accomplish the tasks abovementioned.

Development impact assessments point to the strong results from private sector vehicles for development project delivery. Establishing vehicles for benchmarking value for money of development investments may provide a means to improve confidence in development investments. International benchmarking of how national development agencies are changing how they engage with the private sector is one area which may contribute to innovation in governance of international development.

The new global framework for financing sustainable development calls for the alignment of economic, social and environmental priorities (Addis Ababa Conference in July 2015). The impact of the private sector on delivering (not just financing) development projects that address all three dimensions may provide evidence to strengthen international governance of development institutions.

In addition to benchmarking ‘principles-based’ approaches to improving international governance, there remain important gaps in evidence to track impact of good governance. The World Bank has identified 77 countries for which no poverty information is collected. This is more than half of World Bank developing country members. Investing in benchmarking how these 77 countries are establishing poverty information baselines is one area of international governance innovation that would pay dividends for global development institutions.

Agreement on the Sustainable Development Goals represents a useful step, although financing and implementation will be critical and remain to be seen.

The expected adoption of new development objectives is most welcome but results will hinge on a stronger recovery in many advanced and emerging economies, let alone the least developed.

Progress on the Sustainable Development goals, including a focus on the urban and the cross-cutting theme of climate change has translated into modest improvements in the international governance of these issues. Dovetailing the development and climate change agendas in particular opens up avenues to deal with the multiple stressors faced by vulnerable communities as well as the opportunity to capitalize on co-benefits between these two, fundamentally interrelated, sets of priorities. The Green Climate Fund negotiated as part of the UNFCCC signals the potential to address the underlying development concerns (poverty, education, sanitation, food security) that deepen communities’ vulnerability to climate change. It is, however, only the first step towards a transfer of funds from developed to developing nations that adequately addresses the scale of the climate change risks in vulnerable regions.

Despite this progress inadequate attention is being paid to the climate/conflict nexus, as evidenced by the ongoing drought, conflict, and refugee crisis in Syria.

Even with heroic efforts, you cannot put lipstick on a pig. The Millennium Development Goals were a major boost, mobilizing attention and resources. The Post 2015 Development Goals are an unfortunate joke – 17 goals and 169 targets – and suggests the UN has no capacity to say “no”. If everything is a priority, nothing is a priority. The result is that in effect we have no global goals.

The Addis Ababa Action Agenda is the empty result of the summer’s failed summit conference on Financing for Development, despite the previous year’s “hyped up rhetoric about its ambition”. Aldo Caliari, representing civil society’s views wrote, “We have identified more than 20 areas in which this outcome retrogresses over the previous Financing for Development Conference Outcomes from Doha and Monterrey—from inequality to universal services, including debt, taxation and many others.” He understates the failure.

Some good progress has been made, but more resources are needed.

I cannot discern any significant progress on improving governance of the development agenda. I view the Addis Ababa conference as not only a distraction but counterproductive: the multiplication of goals and targets demonstrates that the process was a bureaucratic exercise rather than a thoughtful attempt to identify the obstacles to economic and social development and prioritize actions to overcome them. Based on conversations with others and not first-hand knowledge, the World Bank is less effective today than it was a decade or more ago; it will take a decade to regain its position.

The successful establishment of AIIB with leadership from China greatly promotes economic globalization and regional integration. However, the huge swings of the stock market and economic slowdown in China blurs its future.

The many initiatives that are being announced in terms of development goals, investment targets, and sectoral initiatives cannot mask the fact that little concrete progress is being made on the ground.

While Addis Ababa was by no means an unqualified success, it was not a failure, which bodes well for both the SDG debate and the climate change CoP. A major row in Addis might well have derailed both of the subsequent meetings.

I am one of those who views the SDG’s as a qualified success. True, there are too many goals and way too many subgoals, but the alternative was much more depressing. When I served with Jim Balsillie on the Secretary General’s panel on sustainable development, we fought very hard to prevent the proliferation of goals being promoted by the ILO, UNDP, FAO and others. And we fought to integrate sustainability into the successors to the MDG’s. Both of those seem to have stuck.

These goals, if they are adopted, will serve to further integrate the development and environmental agendas at the international levels. And the multilateral and bilateral agencies seem to be lined up behind them, holding out some hope that the development agenda may be less scattered than before.

I also have the impression that the Busan principles are taking root in the development assistance agencies.

With emerging market growth slowing and growth in advanced economies also low, there is little room to make effective progress on these fronts.

The establishment of the New Development Bank and the Asian Infrastructure Investment Bank have brought more financial resources and, more importantly, competition to development financing. Both the new banks and the traditional development banks have expressed a desire to collaborate in funding development, though thus far no concrete steps have been taken.

The refugee crisis is an important footnote to the current state of development. On the one hand, some progress has been made in poverty reduction. On the other hand, in the war-torn countries millions and millions of people have suffered from unspeakable hardship, bringing their very survival into question. The developed countries, especially the United States, should think harder when they are championing their noble cause of democracy. They should ask themselves whether they are prepared to accept the consequences and help those they will leave behind, before taking actions.

The international community should redouble their efforts to wipe out terrorism and bring back peace and stability to those war-torn regions.

China’s efforts in setting up the AIIB and Bricks Bank are applaudable. The cooperation between the World Bank and these new institutions should be a great blessing for the development agenda.

The WTO’s plurilateral Environmental Goods Agreement (EGA) initiative made good progress in 2015.  The following jurisdictions are engaged in the EGA: Australia, Canada, China, Costa Rica, the European Union, Hong Kong, Iceland, Israel, Japan, South Korea, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei, Turkey and the United States.  The participants are now working actively in the plurilateral WTO negotiation process seeking tariff elimination for Environmental Goods in categories such as renewable energy, air pollution control (including CO2 capture), energy efficiency technology, environmental monitoring and analysis, as well as water treatment and wastewater management.   Of the original 660 goods submitted for consideration for tariff elimination, 450 were included in the Chair’s list of goods to be considered during the September round.  While this list is likely be subject to further refinements this fall, this large number of goods suggests that the participants are working to conclude an ambitious agreement.

Global trade in environment goods may prove to be an economically material area of global trade. As a test, Canadian exports of environmental goods excluding waste are of the same order as other areas of material economic activity for Canada. At $12 billion exports in environmental goods (excluding waste bi-products) are of the same order as Canadian exports of livestock, wood, processed food and minerals. As carbon regulations are brought into force at both the national and infra-national levels, the share of environmental goods as a share of economic activity may begin to displace trade in fossil fuels as global GHG emissions begin to decline in line with commitments to UNFCCC processes. Tracking trade in environmental goods may also facilitate benchmarking the impact of national macro-economic growth and innovation policies aimed at retooling economies within carbon-constraints.

For countries that choose to establish growth plans that are focused on stimulating investment in low carbon infrastructure, reports on trade in environmental goods would provide insight into the pace of translation of investments at the micro-economic level.

For countries who have focused investments in innovation in low-carbon technologies, trade in environmental goods may provide evidence of aggregate supply and demand which in turn may stimulate the formation of new private sector capital markets.

Establishing principles to address trade implications of phasing-in of carbon-pricing regulations will be key to avoiding spill-over effects onto jurisdictions that have not yet implemented such regulations. Understanding the impacts and implications of possible border tax adjustments that reflect an internalized carbon price will be of increasing importance.

The Bali Agreement has only been implemented by two of the G20 members. The WTO Agreement on Electronics constitutes an important break-through but prospects for broader progress in the WTO remain bleak. Prospects for broader plurilateral agreements also remain highly uncertain.

There were a few rays of hope for the WTO and the multilateral trading system this past year. About 50 countries agreed to expand and update the 1996 Information Technology Agreement, which lowers trade barriers for IT products; this year’s deal was the first WTO-sponsored pact in 18 years to lower tariffs. This was a salutary development showing that deals can be done in Geneva. The WTO’s Trade Facilitation Agreement, which was initially struck at the 2013 ministerial meeting in Bali, is back on track again after a U.S.-India deal removed a big obstacle; this too will help give a little boost of confidence to the WTO as an institution. These achievements shouldn’t be oversold—the Doha Round remains stuck, with little sign that it will start moving forward anytime soon. So in my opinion, the multilateral trading system remains in danger of eroding over the long run; the system badly needs to overhaul its rules to address new problems that have arisen since the organization was founded two decades ago. But just looking over the past year, at least things aren’t going in reverse. Perhaps the most significant recent development for trade policy is that President Obama won congressional approval for fast track “Trade Promotion Authority,” giving the administration the right to negotiate trade agreements without worrying that Congress will pick them apart with amendments. This will help restore U.S. leadership in the trade realm.

Although I realize my perspective is controversial, I think the successful conclusion of the TPP will pose a threat rather than a boon to the multilateral system. On the other hand, the TPP’s woes reflect the difficulties of conducting far-reaching trade negotiations. Another major regional trade deal, the Transatlantic Trade and Investment Partnership, remains even less well advanced than the TPP.

There is no progress, but the pressure has not abated.

The G20 appears to have effectively held the line on trade barriers and may even deserve some credit for avoiding a currency war. Recent G20 meetings appear to have quieted complaints about the Fed’s policies and doubts about China’s intentions. APEC appears serious about making sense of all the overlapping regional trade agreements. The Bali package notwithstanding, the absence of an obvious agenda for the WTO remains a negative.

We may be going backwards in terms of progress in international development issues.

Assessing progress in trade is no easy task. It is tempting to suggest that bringing trade agreement negotiations to a conclusion constitutes progress. If that is the metric, then we have made progress in TPP negotiations and we see other negotiations proceeding apace. However, progress cannot be judged solely by the imminent end of a negotiation. The substantive effects of the agreements may not constitute progress at all.

A number of negotiations are ongoing, including TTIP and TiSA. It remains to be seen who the winners and losers will be from these agreements, including the TPP, so reserving judgment on whether they count as progressive agreements seems wise.

On more traditional fronts, the WTO dispute settlement mechanism continues to function well and there is no alarming evidence of any concerning protectionist measures as a result of recent economic developments.

No significant progress has been made (on multilateral basis), while local or regional trade restrictions continue (e.g., between MERCOSUR members). On the other hand, it isn't clear what the appropriate metric should be: the absence of regional arrangements that undermine multilateral approaches?

The G20 Brisbane summit showed support for a robust and effective WTO and its commitment to promote the remaining issues of Doha round negotiation, which is an encouragement to the efforts to get out of the deadlock in the WTO.

The world may be moving to a new regime of regional and bilateral agreements.

The calls for progress are there but the action is missing. It seems that implementation of the Bali package will take time. Reforms to the WTO's decision-making procedures remain at the proposal stage. Negotiations for bilateral or regional trade agreements like TTIP continue while there is no attempt to streamline the rules governing international trade at the WTO. This means that businesses are facing increasingly complex and overlapping rules when it comes to international trade. A point may soon be reached whereby the transactions costs associated with the "spaghetti bowl" may overcome the benefits associated with free trade agreements.

The successful conclusion of the TPP negotiations is indicative of progress in trade governance. The agreement, reached on October 5, hit an important moment of opportunity just prior to the elections in Canada in mid-October and upcoming US elections next year.

Regarding RCEP, Beijing hopes to finish negotiations this year, and the recent signing of the FTA between South Korea and China was perhaps a stepping stone for RCEP discussions. If agreed, the RCEP would link the 10 ASEAN member nations with Australia, China, India, Japan, New Zealand, and South Korea, and would account for a third of global gross domestic product.

The Comprehensive Economic and Trade Agreement between Canada and the EU signed last year is nearing approval, pending ratification from the European parliament and EU member countries and Canadian federal and provincial approval, expected in 2016.

TTIP negotiations continue, and progress has been made regarding regulatory cooperation within the proposed agreement. This year talks have been moving more slowly than expected, in a large part due to issues surrounding food and agricultural interests, as well as dispute resolution. With 150,000 people marching against TTIP in Berlin, it is important to acknowledge the current public opinion regarding the trade partnership. EU consumer and citizen support for TTIP remains low, particularly in Germany. As talks continue, the goal remains to complete TTIP negotiations by the end of 2016; perhaps an ambitious goal given current public sentiment.

The Doha round continues in its coma, and previously halting steps toward agreement on a TPP were, in my judgment, mildly negative for the multilateral governance of trade. They drew energy away from the WTO round; TPP might someday compel the excluded to make concessions in Geneva to get inside this large club; but creation of a rival institution and permanent fragmentation seem as likely. My judgment here is primarily relative to the goals of a multilateral institution strong enough to prevent major political conflicts over trade and promote efficient global resource allocation, and less directly relative to what these developments imply for macroeconomic conditions.

The multilateral trading system continues to founder, with the prospects for the upcoming WTO Ministerial pretty dim. The Director General has turned out to be a poor choice to run the organization, being more part of the problem than part of the solution. They continue to flog the Doha horse, which seems to me far more dead than alive and even the Trade Facilitation agenda does not seem to be advancing by leaps and bounds.

The main game is being played out at the regional level, with the Canadian and U.S. negotiations with Europe proceeding slowly. The TPP has become one of Obama’s major legacy issues and approached a decisive, perhaps do or die, moment in September before reaching agreement. On balance, TPP is probably a good thing, although its effects on NAFTA, among other agreements, remain unclear.

The multilateral system is in a parlous state.

A small number of countries (notably the United States) have thus far approved the Trade Facilitation Agreement. The World Bank has provided assistance to developing countries regarding border management and access to information. But the progress has been minimal, with many countries expressing doubt that they can secure domestic approval of the Agreement in the near future.

With lowered export growth in Asia (specifically China, India, Korea) and inability to agree a post Doha agenda in the WTO, progress is low in the area of development.

For the international trade system there is little progress. TPP, TTIP, RCEP, and others are indicative of more and more mega regional trade areas expected to be established in the near future, instead of a more powerful global governance mechanism like WTO.

In all, the global governance mechanism shows a trend of fragmentation, which means little progress or even some regression.

It is regrettable that FTA negotiations have replaced multilateral negotiation under the umbrella of the WTO, and the politicizing of trade negotiations is worrying. Multilateral negotiations should not be used as a leverage to force open developing countries capital accounts

Efforts since 2007 have established the economic materiality of fossil fuel subsidies and continued refinement of this analysis by the IMF (fossil fuel subsidies are equivalent to $1000 USD a year per citizen in the G20) continue to push the case for economic materiality of these subsidies and the pressing need for policy change. And yet commitments by G20 members to end fossil fuel subsidies have not yet been honoured despite increasing evidence on the need to restrict extraction of proven reserves of fossil fuels.

For some oil exporting countries, geo-political shifts and potential future restrictions on extraction of proven reserves may be leading to accelerated production today. For other oil producing countries, new technologies have ushered an era of energy security. Overall, the production and burning of fossil fuels has increased to meet demand in top net importers of oil (China, Japan, India and South Korea) while the US’s net imports sit at half the volume only five years ago.

For still other oil producing countries such as Canada, the implementation of carbon-pricing regulations needed to meet international emissions targets are re-writing the economic landscape.

In what is a period of significant global economic change, how can international governance innovation ease the transition? The G20’s support of the UNFCCC process and of entities such as Climate Finance Study Group is key but there are other avenues worth exploring.

Could the G20’s peer review process of national growth plans also be applied to how G20 members establish growth policies that also decarbonise the economy? Carbon regulation seeks to reduce carbon emissions at the lowest price. Carbon regulation will stimulate investments in business processes and in deployment of new technology.

Peer review of low carbon growth policies may enable G20 members to learn from national level macro-economic policy for growth in a carbon constrained world and apply these learnings to innovation in international governance.

Spurred by agreement between the US and China prior to the Brisbane Summit, prospects for reaching agreement at the Paris Climate Conference appear brighter than has been the case in recent years. Whether this progress will have a meaningful impact on climate change remains to be seen.

Some unexpected initiatives in the run up to CoP 21 suggest that awareness is rising about the need for concerted actions on a sustained basis

The recent deal between the US and China on emissions reductions was significant both in its substance and in its implications for the upcoming negotiations in Paris. This places increased pressure on other large emitters to make significant multi-lateral or bi-lateral progress towards greenhouse gas reductions. It also potentially staves off a measure of future economic uncertainty, by stimulating a shift towards decreased reliance on fossil fuels. Recent moves towards reducing or removing fossil fuel subsidies have a similarly transformative potential, but the federal election in Canada and the recent political shifts in Australia translate into uncertainty about the extent to which large emitters will authentically take on this task of reduced subsidies (i.e. with the various Canadian political parties making very different promises in this regard). National and sub-national efforts add additional momentum, including the province of Ontario’s plans to be a part of Quebec’s cap and trade system, the Dutch ruling that the government must cut carbon emissions by 25% in five years to protect its citizens. This latter decision sets a precedent for a legal approach to addressing climate change and supports the notion that each nation has a responsibility to manage this risk.

Globally, there are too many constraints – inappropriate short time horizons, the “not in my backyard” syndrome and infinite capacity to delude ourselves. Governments adopted a 2 degree centigrade target, equating it to 450 ppm atmospheric CO2 concentration. In fact 450 ppm only provides a 50% probability of meeting the target – so as Bill McKibben has pointed out, we are playing Russian roulette with three bullets in six chambers. The Paris meeting will result is aspirational rhetoric and voluntary commitments, with zero likelihood of provision of the $100 billion per year promised at the 2009 Copenhagen conference. There is no prospect of meeting this target – five degrees Centigrade increase is more likely. The focus on inefficient fossil fuel subsidies would be more effective if the G20 published a report on their respective tax preferences subsidizing exploration for fossil fuels, in an era of “stranded assets”, where carbon in proven reserves exceed by at least a factor of five the emissions consistent with the two degree target.

Every major economy is talking seriously about climate change, which should count for something. India and Indonesia took advantage of lower oil prices to end fuel subsidies. The U.S. and China don’t agree on much, but they chose to make a statement on climate. Alberta elected a government that plans to be tougher on carbon emissions. All of this is happening in the backdrop of work by the UN, the IMF and the World Bank.

At present there exist only small efforts for such a serious problem.

The China-U.S. agreement says it all. That being said, it is easy to agree on something in principle; another matter to implement it in practice. Nevertheless, the Sino-American deal creates enormous momentum for Paris and sets a higher bar than would otherwise be the case.

The joint announcement by U.S. and China, the top two biggest emitters, to reducing global emissions demonstrates a hopeful success in December 2015 Paris Climate Conference. The slow progress goal of phasing out fossil fuel subsidies, however, was used as a proof of the failure of the G20.

The announcements by China and the US are signs that the international community is beginning to take coordination on CO2 seriously.

Mitigation commitments negotiated by nations under the UNFCCC are still too weak to avoid the potential dangerous climate disruption in the future.

There has been some progress in climate change governance, and the recent US-China agreement could signal further progress. The “ambitious but achievable” jointly announced goals demonstrate encouraging developments in addressing climate issues. A new climate agreement expected from the December 2015 Paris Climate Conference would set a framework and precedence for a future, more binding and global climate agreement expected in 2020.

Members of the UN have come forward with national contributions as required by their agreed path toward a 2015 Paris agreement. There is still little evidence, however, that they will reach agreement on financing for developing countries, and without that it is hard to see the developing countries signing up in Paris. But the official UN agreement is only one level of global climate governance. Nations, provinces, cities, and partnerships of businesses and NGOs are also taking unilateral steps to reduce emissions and slow deforestation and have made quantitative pledges to do more. I feel mildly encouraged. My judgment here is primarily relative to goals of stabilizing the global climate while enabling development in the poorer countries, but long term global macroeconomic growth and stability are of course important too; we don’t want to shut down growth to stabilize the climate.

There has been major progress in a number of areas. The U.S./China deal seems to be real and both have set themselves fairly major emissions targets. It would seem that the Chinese leadership have under-promised, as is their custom. A recent CIGI paper states that China could actually reach its stabilization by 2020 (more likely by 2025), rather than the vague 2030 promise contained in the President’s statement. And President Obama seems determined to make a serious effort in Paris.

We know from experience that international environmental negotiations tend to fail without at least U.S. acquiescence to the consensus and only really succeed when the U.S. is supportive. An issue which had no champions in Copenhagen now has three in Xi Jinping, Barack Obama and Angela Merkel. The German Chancellor was the Chair of the first CoP in Berlin, when she was Environment Minister. She knows the issues well.

The real danger for Paris is that expectations have again been raised too high. Although the French have been attempting to inject a note of realism into the preparations, expectations are once again sky high. When all of the official commitments are added up, they will be much higher than the minimum needed to stay within the 2C target agreed on and signed by the parties in Copenhagen. The IEA, OECD and the IPCC have repeatedly reminded the international community that we have very little time to cut emissions to achieve the agreed target, and there is a likelihood that the media and civil society will be very disappointed by Paris.

Nevertheless, there is a good possibility of a decent agreement that will lead to greater cuts in the future. The renewable energy industry seems to have survived the drop in oil prices. Many developing countries (India and Indonesia among them) have use the drop in oil prices as a means to dramatically cut energy subsidies and to release substantial funds for other development purposes. The private sector and the financial community are increasingly committed to action and seem to have realized that the economy of the future is one where less carbon is released. Finally, this is no longer an exclusively North/South issue. Major domestic policy reform is now underway in China, India and Brazil. And even in Africa, the low carbon shift is beginning to gain significant traction in places such as Kenya and Ethiopia, as well as South Africa.

The major unsolved issue remains financing for the transition away from coal and oil and the potentially enormous costs of adapting to climate change in the South. This powder keg has the potential to derail the entire conference.

The US-China agreement in late 2014 was a breakthrough and may provide momentum for further cooperation in the future.

Whether significant progress will be made depends a lot on whether China and the US come to an agreement about how to address climate change.

Generally it is positive, however, that climate change is even mentioned in G20 documents. Usually, the G20 focuses on financial stability and monetary issues exclusively. Therefore, some progress has been made. As a next step, facts and figures are needed to calculate the impact of climate change on the financial sector and to understand opportunities for the financial sector to engage in climate finance. So far, the topic is in a small niche that is often not addressed by research and policies because of the lack of data and a lack of understanding about the connection between climate change and finance.

We will wait the result from the Paris meeting in December to determine the prospects for climate change governance.

I agree that “The U.S. and China’s recent joint announcement and “ambitious but achievable” commitment to reducing global emissions demonstrates encouraging developments in addressing climate change issues.” Chinese leadership should be praised because of its courage to tackle climate change seriously, which means huge economic sacrifice in the short-run. I believe other developing countries such as India will follow suit. This is one of the few areas with great global significance where true progress has been made. Count the number of blue skies in Beijing this year!

More technical support from developed countries and key stone-international organizations is needed.