2023-06-22 05:06:29
Tim Schauenberg
No money, no climate protection. In Paris, rulers are seeking to push for climate and financing reforms. Globally, not enough is invested to reduce the effects of global warming.
Trying to stop global temperatures rising and preparing for the inevitable consequences of climate change is expensive. However, there is still not enough investment in climate protection. This is due, in part, to multinational financial institutions.
This week, numerous heads of state and government from industrialized and developing countries meet in Paris to discuss the international financial architecture and possible financing models for increased climate protection.
With climate change, the financial need of developing countries increases, explains Lola Vallejo, director of the climate program at the Paris Institute for Sustainable Development (IDDRI, for its acronym in French).
However, international financial institutions, such as the World Bank and the International Monetary Fund, are not prepared to respond adequately.
“These institutions were founded after World War II, when about half of today’s states did not yet exist,” Vallejo explained to DW. And he continues: “They are guided by the guideline that the power and the possibility of determining the rules are in the hands of the developed countries.”
According to the International Monetary Fund, 43 of the 59 developing countries most affected by climate change are at high risk of a financial crisis.
Private investment is essential for climate protection. Image: Schalk van Zuydam/AP Photo/picture alliance
Debt forgiveness for poor countries?
Vallejo assures that a weak economy and high indebtedness limit the financial room for maneuver of States to invest in adaptation measures to climate change, as well as for the reconstruction and strengthening of the economy after a climatic catastrophe.
The expert explains that, currently, many developing countries need more money to repay loans than they would need for their programs for sustainable development and adaptation to climate change: “If they could interrupt interest payments, they would have enough money to carry out his plans.
Hence, debt forgiveness and the cessation of interest payments are issues of the summit, as well as better access to emergency funds from the IMF. Already last year, the Prime Minister of Barbados, Mia Mottles, promoted a coalition of developing countries, which demanded access to the funds of the fund that the industrialized countries did not use.
For Friederike Röder, from the NGO Global Citizen, this summit dedicated exclusively to finance represents a “historic opportunity”.
The most affected countries demand help
The coalition around Barbados is also calling for the creation of a US$100 billion annual fund for damages and losses caused by climate change.
In May of this year, the German Foreign Minister, Annalena Baerbock, announced that the goal of 100 billion dollars could be reached by 2023. However, it is clear that this is not enough. According to the IMF, until the middle of the century, several trillion dollars a year would have to be invested in climate protection and adaptation to a hotter planet.
More private investment is needed
Lola Vallejo clarifies that public funds are not enough to solve the problem, so the possibilities of increasing private investment will also be discussed at the summit. The IMF points out that, by 2030, current private investments in developing countries, which amount to 250 billion dollars a year, would have to double.
Alternative financing models
Also, in Paris, alternative financing models will be discussed. Faced with pressure from Pacific island countries, France, for example, will propose a global tax on container ships. For its part, the IMF calculates that a price for the consumption of heavy crude oil in the shipping industry could generate income of up to 60 billion dollars for climate protection.
Finally, Vallejo says that never before has a possible tax on CO2 emissions received as much support as it does today.
(vt/ers)
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