Macron backs climate cash trillions – POLITICO

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SHARM EL-SHEIKH, Egypt – Long-held climate change talks due to demands for the transfer of billions of dollars – on Monday, French President Emmanuel Macron supported a bag push for a conversation that can be scaled to trillions.

Speaking at the COP27 climate summit in Sharm El-Sheikh, Egypt, Macron gave his support to elements of the plan outlined by Barbados Prime Minister Mia Mottley that seeks to change the way finance flows to climate in the countries that need it most.

He called for a “big shock of concessional financing,” suspension of debt for countries hit by the disaster and putting the notice of the International Monetary Fund (IMF).

It was a speech that marked a change in tone that developing countries have long pushed for.

During the first day of official talks, leader after leader from rich countries emphasized the need to show “solidarity” with developing countries after a year in which disasters and an unfolding The sovereign debt crisis has helped reshape the often-controversial conversation about climate finance.

“This is the right thing to do,” said UK Prime Minister Rishi Sunak.

Money has been a central focus of climate talks this year because of the widening gap between what is promised and what is needed. These range from everything from clean energy transitions to hardening countries’ defenses against climate impacts to potential compensation for irreversible climate damage.

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Last September, Barbados issued the world’s first pandemic and natural disaster bond. “The time has come for the introduction of natural disaster-pandemic clauses in our debt instruments,” Mottley said.

“God willing, if we get hit tomorrow, we’ll unlock 18 percent of GDP in the next two years, because what we’re doing is effectively stopping all of our debt,” he said.

Macron called for changing the rules of the IMF, the World Bank and other major creditors clauses suspending loan payments in the event of a disaster are more common.

“What do you ask of us in terms of debt repayment and guarantees, if we are affected by a climate shock, if we are a victim of a climate accident, to some degree, there must be a suspension of conditions,” as the president of France.

Broken promises

While the need for finance to fuel the transition to clean energy around the world and guard against the damages of climate change has reached the trillions, the UN climate system remains stuck in a broken that decade promise from rich countries. They promised to provide $100 billion a year in climate finance by 2020, but that won’t happen until next year.

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As climate impacts grow more severe and more numerous, demands for new and more innovative forms of finance increase. The post-pandemic debt balloon has raised calls, with many vulnerable countries threatening a debt strike ahead of COP27.

Mottley has been a champion of raising the debt crisis facing countries like his and highlighting how it adds to climate inequality. The plan he outlined in September hinged on debt relief, increased financing, and new mechanisms for post-disaster recovery, such as bonds.

The Barbados leader’s call and Macron’s heavy backing brought a new reality and dimension to the financial discussion.

Mottley pushed for special drawing rights to the IMF to help climate-vulnerable countries recover and respond to climate impacts. That could be used to help unlock more money from the private sector — $500 billion from the IMF could result in $5 trillion in investment, he said Monday.

The challenge is to get the shareholders of financial institutions to agree to the reforms.

Officials in the US, Germany and other major economies are pushing for an overhaul of the way multilateral development banks lend to allow them to expand in a more financial climate. US Treasury Secretary Janet Yellen called on the World Bank to draft a roadmap by the end of the year that could be used to drive reform efforts in other development banks.

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On Monday, Macron continued, saying that next spring, the world’s financial institutions must find ways to “create concrete solutions to activate these new financial solutions and to help us provide access to new liquids.”

He paid tribute to Mottley’s “force of character” and said the two leaders – one who presides over an economy 600 times bigger than the other – agreed to form a group of “smart people mind” to make proposals for reforming the international financial system. .

But one suggestion by Mottley that Macron rejected was his call for fossil fuel companies to pay a tax on their profits to fund disaster-stricken countries.

“How can companies make $200 billion in profits in the last three months and not expect to contribute at least 10 cents of every dollar of revenue to a loss and damage fund?” he asked.


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