Talks on a global financial pact that will give poor countries access to funds to help them tackle the climate crisis and develop their economies in environmentally sustainable and socially equitable ways will begin next week in Paris.
Emmanuel Macron, the French president, will be joined on Thursday by dozens of world leaders to discuss climate finance, green growth, the debt crisis and how to tap private sector sources of investment. EU leaders, including the European Commission president, Ursula von der Leyen, and the German chancellor, Olaf Scholz, will be there, but the British prime minister, Rishi Sunak, has not confirmed whether he will attend.
Macron believes current systems of development finance, including overseas aid from rich countries and climate finance to help poor countries cut their greenhouse gas emissions and adapt to the impacts of extreme weather, are not delivering results.
“The fight against poverty, the decarbonisation of our economy in order to achieve carbon neutrality by 2050, and the protection of biodiversity, are closely intertwined,” he said, setting out the terms for the two-day summit. “We therefore need to agree together on the best means to address these challenges in the poor and emerging countries of the developing world, when it comes to the amount of investment, to comprehensive reform of infrastructure like the World Bank, the International Monetary Fund, and public and private funds, and how to set a new process in motion.”
Mia Mottley, the prime minister of Barbados, will also play a leading role. Her proposals, known as the Bridgetown agenda, are aimed at massively expanding the funding available to developing countries, particularly those afflicted by the climate crisis.
Mottley has fiercely criticised the World Bank, IMF and similar institutions, most of which were set up in the final days of the second world war, calling them unfit for the 21st-century task of tackling the climate crisis and drawing countries out of debt and poverty. “The international community’s responses are currently fragmented, partial and insufficient,” she said. “We therefore call for a fundamental overhaul.”
Calls have been growing from many countries, including the US, the EU and UK, for an overhaul of the World Bank. The former president David Malpass, appointed in 2019 by the then US president, Donald Trump, resigned earlier this year after deepening controversy over his apparently climate-sceptic views.
The summit will be the first major international outing for his successor, Ajay Banga. Banga, a former Citigate banker and ex-chief executive of Mastercard, is seen as likely to open the institution to widening partnerships with private investors, and shake up the bank’s attitude to the climate and related crises.
But it is not yet known how far he is likely to agree with Mottley’s calls for complete overhaul, including targeting $1tn of new investment in poorer countries, $3tn (£2.35tn) or more for climate finance globally, debt relief for the most indebted nations, and long-term finance over the next 30 years for building resilience to climate impacts.
Patrick Verkooijen, the chief executive of the Global Center on Adaptation, said fundamental change was needed, as current systems of overseas aid and development finance were not coping with the crises – of poverty, climate, food supply and biodiversity – facing the world. “We need to shake up the status quo and completely reform much of how development finance has worked in the past. This reimagined and reformed global financial system would suspend debt service repayment when natural disaster strikes whilst also using the balance sheet of multilateral banks to leverage private sector finance to build resilience against climate breakdown,” he said.
As the world grapples with severe food shortages, with more than 250 million people facing acute food insecurity, exacerbated by the climate crisis, hunger must also be a key topic at the talks. Alvaro Lario, the president of the International Fund for Agricultural Development, said: “This summit offers an overdue opportunity to revisit the rules of international finance, which are stacked against the world’s poor, and which ignore their enormous contribution to global food security and global stability. It must find a way to catalyse private sector investment on a massive scale. Public funding alone cannot provide the $330bn to eradicate hunger by 2030.”
