New Global Financial Pact takes small steps towards climate justice
Heads of state and civil society representatives committed on Friday (23 June) to work towards a “fundamental reform” of the international development aid framework, agreeing on several measures to aid the green transition – but fell short of commitments on international carbon taxation.
Leaders gathered at the Summit for a New Global Financing Pact, held in Paris on Thursday and Friday, to discuss financing for Global South development aid and the climate transition.
“No country must be left to choose between poverty reduction and fighting against climate change,” said French President Emmanuel Macron, who co-hosted the summit with Barbadian Prime Minister Mia Mottley.
Participants committed to a roadmap to scale up actions for ‘debt distressed’ countries, by increasing the financing firepower of both public and private institutions for low-income nations and pausing debt repayments in case of climate disasters.
The summit “broke taboos” and achieved a high representation of the countries most vulnerable to climate effects, said William Ruto, president of Kenya.
“For the first time ever, as we leave Paris, we have agreed that we have to rethink [the entire international financial infrastructure],” he added.
While all welcomed the summit as a way to renew international financing, which experts claim is needed at a scale of $4 trillion every year, they failed to unify around the implementation of an international carbon tax and stressed that the reform urgently needed to translate into concrete steps.
Heads of state and civil society representatives committed on Friday (23 June) to work towards a “fundamental reform” of the international development aid framework, agreeing on several measures to aid the green transition – but fell short of commitments on international carbon taxation.
Leaders gathered at the Summit for a New Global Financing Pact, held in Paris on Thursday and Friday, to discuss financing for Global South development aid and the climate transition.
“No country must be left to choose between poverty reduction and fighting against climate change,” said French President Emmanuel Macron, who co-hosted the summit with Barbadian Prime Minister Mia Mottley.
Participants committed to a roadmap to scale up actions for ‘debt distressed’ countries, by increasing the financing firepower of both public and private institutions for low-income nations and pausing debt repayments in case of climate disasters.
The summit “broke taboos” and achieved a high representation of the countries most vulnerable to climate effects, said William Ruto, president of Kenya.
“For the first time ever, as we leave Paris, we have agreed that we have to rethink [the entire international financial infrastructure],” he added.
While all welcomed the summit as a way to renew international financing, which experts claim is needed at a scale of $4 trillion every year, they failed to unify around the implementation of an international carbon tax and stressed that the reform urgently needed to translate into concrete steps.
Country-specific advances
Amid international pledges were also some country-specific advances.
Senegal, supported by the ‘International Partners Group’ – including France, Germany, the EU, the UK and Canada – launched a Just Energy Transition Partnership (JETP) to further its renewables capacities to 40% by 2030, with an extra €2.5 billion in financing.
JETPs, first announced at COP 26 in Glasgow, are new financing tools to help emerging economies that are heavily-coal-dependent emerging economies phase out the fossil fuel’s use.
Moreover, the US and China managed to strike a deal to restructure Zambia’s debt, which amounts to $6.3 billion and is mostly owned by Beijing. Macron dubbed the deal “historic”.
Zambia was the first African country to default during the pandemic in 2020 and was receiving treatment under the G20 common framework on debt service suspension, which has been criticised for being too slow and for scaring off private creditors.
Reactions
Climate activists and global south leaders welcomed the outcome of the summit, though they warned agreements must be translated into real, tangible outcomes.
“The summit made some encouraging progress […]. But nothing much more concrete,” said Najat Vallaud-Belkacem, ONE’s Director for France.
“Until the richest and most powerful countries are prepared to act with the necessary scale and speed, we are still a long way from a truly ‘new global financial deal’,” she added.
Many global south leaders also voiced their disappointment and frustration towards the lack of action of Western countries to aid vulnerable countries against climate change.
“I cannot not mention the fact that powerful countries are the origin of climate change which has severe and heavy consequences in particular on African countries,” said Mahamat Idriss Déby Itno, president of Chad, calling for the annulment of debt for countries hit the worst by the climate crisis.
cover photo:While all welcomed the summit as a way to renew international financing, which experts claim is needed at a scale of $4 trillion every year, they however failed to speak in unison over the implementation of an international carbon tax, or shipping levy. [Lewis Joly/EPA-EFE]
