United Nations secretary-general, Antonio Guterres has warned that climate disasters are economic disasters and called on developed countries to deliver on their finance promises. A Cuban tourist cools off at a water fountain in the Monumento a la Revolucion square during a heat wave that hit Mexico City.
“Climate disasters are economic disasters. As finance ministers, you know that all too well. Storms, floods, fires and droughts are decimating economies around the world. Funds that should be building roads, educating children, and curing the sick, are being swallowed up by the climate crisis,” Guterres warned at the opening of 11th Ministerial Meeting of the Coalition of Finance Ministers for Climate Action that will take place as part of the 2024 International Monetary Fund (IMF) and World Bank Group Spring Meetings in Washington DC. Media reported on April 15, World Bank and the International Monetary Fund will convene this week for their Spring Meetings in Washington DC, where discussions will hold major implications for the world’s ability to combat climate crisis as they delve into reforming multilateral development banks (MDBs) to provide more climate finance to poor and vulnerable countries.
The shape of MDB reforms will be key to the speed and availability of climate finance to developing countries, which in turn would form a crucial foundation for the COP29 UN Climate Conference in November, where countries will be faced with the prospect of scaling up commitment. According to the Independent High-Level Expert Group in Climate Finance (IHLEG) co-chaired by economists Vera Songwe and Nicholas Stern, reforms implemented by MDBs could lead to a 40% increase in annual lending capacity (approximately $300-400 billion) over the next decade. Without climate action, today’s costs will seem like small change, Guterres said, calling on all countries to upgrade their climate plans. “We can still avert the very worst of climate chaos by limiting the rise in global temperature to 1.5 degrees Celsius. But only if we act now. It is vital that all countries come forward with new and ambitious national climate action plans – or Nationally Determined Contributions – by next year,” he said.
These plans should align with the 1.5 degree limit, covering all emissions and the whole economy, and reflect national circumstances, he added. “Finance ministers are vital in designing national climate plans that support national development plans, and double as national investment plans – spurring sustainable development. And you are key to mobilising finance for NDCs, and to developing policies and regulations to support their implementation – policies that provide investors with clarity and certainty: from an effective carbon price to ending fossil fuel subsidies,” he said.
Guterres said developed countries need to keep their promises on finance – including on adaptation. “We need significant contributions to the new Loss and Damage Fund, and a strong finance outcome from COP29 this year. And we need innovative financial instruments, adequate capitalisation and reform of the business model of multilateral development banks – to increase their lending potential and to mobilise far more private finance.” “The Triple Agenda report (report of an Independent Expert Group that was commissioned by the Indian G20 Presidency last year) is possibly the most important one amongst many others mentioned because the report focuses on implementation in Bigger, Better and Bolder ways. However the scale of investment required as mentioned cannot be affected by MDB reforms and increase of MDB lending /operations to $390 billion is not enough unless leveraged ex-ante with institutional capital stock.”
At the 15th Conference of Parties (COP15) of the UNFCCC in Copenhagen in 2009, developed countries committed to a collective goal of mobilising $100 billion per year by 2020 for climate action in developing countries. Though Organisation for Economic Co-operation and Development (OECD) has said in 2023 that $100 billion has been likely delivered last year as per the COP15 climate pact struck in 2009. But that is yet to be delivered, according to developing country parties. They have also flagged that most of the money has come in as loans and not as grants which increases the debt burden of smaller countries.
At COP28, countries reached a historic agreement on the operationalisation of a fund to address loss and damage associated with the adverse effects of climate change. It was decided in a Transitional Committee meeting that the Loss and Damage (L&D) Fund will be located in the World Bank but for a pre-determined interim period following which it will become an independent entity. Initially developing countries were completely opposed to the idea of locating the Fund in WB because they felt that would compromise the independence and ability of the fund to deliver swift climate finance.
Meanwhile, Professor Myles Allen, who heads climate science at Oxford University Physics Department and author of Intergovernmental Panel on Climate Change reports warned that some approaches to halting global warming including geo-engineering could also be a threat to geo-political stability. “Continued dependence on fossil fuels at the level we are now will exacerbate global inequalities and drive instability. But technical fixes like mirrors in space, artificial volcanoes, or brightening of marine clouds to cool the planet are uniquely destabilising. This is because once such a programme begins, the “geo-engineers”, probably the government of a single powerful nation, will be blamed for every drought and flood thereafter, wherever it occurs.” Except for the headline, this story has not been edited by The Urban Acres staff and has been already published in media or from a syndicated feed.
