An ecological transition that leaves no one behind – 06/20/2023 – Environment

We are urgently working to do more for people and the planet. Several simultaneous shocks have affected countries’ ability to fight hunger, poverty and inequality, build resilience and invest in their future. Debt vulnerabilities in low- and middle-income countries pose a major obstacle to their economic recovery and their ability to make decisive long-term investments.

We are working urgently to fight poverty and inequality. It is estimated that 120 million people have been pushed into extreme poverty in the last three years and we are still far from achieving our Sustainable Development Goals (SDGs), set at a United Nations meeting, by 2030. putting people at the center of our strategy, in order to increase human well-being around the world.

We want a system that is more responsive to development needs and vulnerabilities, now compounded by climate risks, that could further weaken countries’ ability to eliminate poverty and achieve inclusive economic growth. Climate change will lead to greater and more frequent disasters and disproportionately affect the poorest and most vulnerable populations around the world. These challenges go beyond borders and represent existential risks for societies and economies.

We want our system to be more beneficial for the planet. The transition to a “net zero emissions” world and the goals of the Paris Agreement on climate change represent an opportunity for this generation to unlock a new era of sustainable global economic growth. We believe that just ecological transitions that leave no one behind can be a powerful force to alleviate poverty and support inclusive and sustainable development. This requires long-term investment around the world to ensure that all countries are able to seize this opportunity. Motivated by the historic Kunming-Montreal Global Biodiversity Framework, we also need new economic models that recognize the enormous value of nature to humankind.

We are convinced that reducing poverty and protecting the planet are converging goals. We must prioritize a just and inclusive transition to ensure that the poor and most vulnerable receive the full benefits of this opportunity, rather than bearing disproportionately the costs. We recognize that countries may need to follow different transition paths in compliance with the 1.5°C threshold, depending on their national circumstances. There will be no transition if there is no solidarity, economic opportunity or sustainable growth to fund it.

We, the leaders of diverse economies from all corners of the world, are united in our determination to forge a new global consensus. We will seize the Paris meeting for a New Global Financing Deal on 22-23 June as a watershed political moment to recoup lost development gains of recent years and to accelerate progress towards the SDGs, including just transitions. Our strategy is clear: development and climate commitments must be met. Grants and loans at preferential rates (often referred to as “soft money”) must be a priority in the fight against poverty; and to strengthen health, education and food security; and to address climate change and biodiversity loss. Next, middle-income countries must have access to long-term loans to promote sustainable investment in economic, social and physical resilience. In line with the Addis Ababa Action Agenda, we recognize the need to leverage all sources of finance, including official development assistance, domestic resources and private investment.

Realizing that consensus must start with existing financial commitments. Collective climate finance targets must be met by 2023. Our overall global ambition of $100 billion in voluntary contributions to countries most in need, through redistribution of special drawing rights or matching budgetary contributions, must also be achieved.

No country should have to wait years for debt relief. We need greater and more timely cooperation on debt for both low-income and middle-income countries. This starts with quickly completing solutions for countries in debt.

One of the priorities is to continue the ambitious reform of our multilateral development banking system, based on current dynamics. We are calling on development banks to take responsible action to do much more with existing resources and increase lending capacity and private capital mobilization based on clear objectives and strategies in terms of private finance contribution and domestic resource mobilization. These financial resources are essential, but this reform is about more than money. It should provide a more effective operating model based on a country-led approach. We also need our development banks to work together, as an ecosystem, in close collaboration with other public agencies and rationalized vertical funds and, where appropriate, with philanthropists, sovereign wealth funds, private finance and civil society, to achieve the greatest possible impact. Once this objective is achieved, we can consider capital increases where we can generate the greatest impact and reinforce the institutional capacity of each organization.

Technology, skills, sustainability and public and private investment will be at the heart of our partnerships to promote technology transfer and the free movement of scientific and technological talent and to contribute to an inclusive, open, fair and non-discriminatory economy. We will promote a sustainable and inclusive investment agenda in emerging and developing economies, based on local economic added value and local transformation, such as fertilizer value chains. This comprehensive approach will require new metrics to update our accountability tools.

Public finances will remain essential to achieving our goals. We must start by strengthening our instruments (the International Development Association, the Poverty Reduction and Growth Finance Program and the IMF Resilience and Sustainability Finance Program, the International Fund for Agricultural Development, the Green Fund for Climate and other concessional aspects of our banks, as well as the Global Climate Risk Shield). But we recognize that meeting our development and climate goals —including the fight against hunger, poverty and inequality—adapting to climate change and preventing, minimizing and resolving loss and damage, will require new sources of funding. , innovative and sustainable, such as debt relief, engaging sectors that prosper thanks to globalization and more reliable carbon and biodiversity credit markets.

Building resilience through a comprehensive set of financial instruments is a priority. We need a stronger global safety net, based on pre-agreed approaches, to adapt and mitigate the impacts of climate change, particularly when disasters strike. This implies weather- and other disaster-resistant deferral mechanisms, insurance networks and emergency response funding, including a more stable humanitarian aid funding model.

Achieving our development goals, including climate change mitigation, will also depend on increased private capital flows. This requires greater mobilization of the private sector with its financial resources and innovative strength, as promoted by the G20 Compact with Africa. It also requires improving the business environment, applying common standards and building appropriate capacity, as well as reducing identified risks, notably in foreign exchange and credit markets —which may require public support, as well as the sharing of reliable data. . Overall, our system has to reduce the cost of capital for sustainable development, including through the green transition in emerging and developing economies.

Our work together is aimed at solidarity and collective action, to reduce the challenges facing developing countries and to fulfill our global agenda. We will continue to push for progress, leveraging other important events, including the G20 meetings in India and Brazil, the SDG meeting and the COP, starting with COP28 in the UAE this year. In all our future works and international negotiations, we will seek to advance with concrete actions that fulfill the promise of the SDGs, for our prosperity, for our people and for our planet.