Sustainable Financing, Climate Action Take Centre Stage During New York, Halifax Meetings
Boosting the political momentum for climate action has taken centre stage in multiple high-level meetings across North America this month, including at this week’s UN General Assembly (UNGA) in New York. How to provide the financial resources needed for supporting the Paris Agreement on climate change and the UN Sustainable Development Goals (SDGs) is another hot-button topic this week, as the heads of various international agencies have warned that achieving shared goals like eradicating poverty and hunger could otherwise be at risk.
The UNGA meetings and parallel events come just days after G7 environment ministers wrapped up talks on climate, energy, and oceans in the Atlantic coast city of Halifax, and ahead of a full calendar of climate and sustainable development-focused meetings planned through the end of the year.
Sustainable financing: IGO heads highlight investment, financial systems
One of the major events on the UNGA sidelines this week was a high-level meeting convened by UN Secretary-General António Guterres, where he laid out a strategy document through the year 2021 aimed at galvanising greater financial support for implementing both the SDGs and the Paris Agreement and marshalling the UN’s ability as a global convener for doing so.
The strategy refers to funding gaps across various key policy areas, while highlighting the need to improve “underdeveloped and weak financial systems” in many low-income economies in order to make it easier to tap into the potential of the private sector. The strategy warns that these current deficiencies could translate into essential services, such as renewable energy and clean water, not being provided.
It also highlights the importance of removing government subsidies, suggesting that tax reforms should be set up instead that help support improvements in water, health, and other areas. Furthermore, it calls on governments to “strengthen enabling environments to reduce investment risks,” among other steps towards making it easier for funds to be used to support sustainable investment projects.
Overall, the strategy is built around the following overarching goals: “aligning global financial and economic policies with the 2030 Agenda; enhancing sustainable financing strategies and investments at the regional and country levels; and seizing the potential of financial innovations, new technologies, and digitalisation to provide equitable access to finance.”
Officials at the event welcomed the effort, while also noting that the wider global economic environment, including on trade, will also be a key factor in ensuring such efforts are a success. They also warned that time is running short to put in motion the necessary financial support to achieve the SDGs, which overall have a delivery date of 2030, though some have specific targets with earlier deadlines.
“The SDGs provide a clear destination, but without a roadmap for the next twelve years, it will be difficult to succeed,” said Christine Lagarde, the International Monetary Fund’s (IMF) Managing Director, in a keynote address to the meeting.
One of the biggest challenges, she noted, would be in securing the necessary funding so that low-income economies can make the infrastructure improvements to achieve goals in areas ranging from water to roads to energy.
“As a necessary first step, low-income developing countries must own the responsibility for achieving the SDGs. Country efforts should focus on strengthening macroeconomic management, enhancing tax capacity, tackling spending inefficiencies, addressing the corruption that undermines inclusive growth, and fostering business environments where the private sector can thrive,” said Lagarde this week.
Raising more revenue from taxes and securing foreign grants would be key, she continued, noting the importance of “well-targeted aid” that avoids putting low-income economies under increasingly unsustainable debt burdens.
She also highlighted the current international landscape on trade and climate action, with some of the pressures emerging in both areas potentially putting efforts at achieving the SDGs at risk.
“An important aspect of the broader challenge is the environment in which countries seek to generate and sustain stable growth. This requires a variety of global public goods including geo-political stability, open trade, and climate initiatives, as well as good governance,” she said.
New York Climate Week kicks off
The annual “New York Climate Week” is also underway in parallel to the UNGA, along with “Global Goals Week,” two major events on the sustainable development policy calendar meant to galvanise political momentum towards supporting climate action and the achievement of the SDGs.
This year’s climate week comes a few months before UN negotiators face a key deadline of wrapping up a “rulebook” that will lay out how to implement the Paris Agreement on climate change. Efforts to achieve the necessary substantive progress for meeting this deadline at the annual UN climate talks, scheduled for this December in Katowice, Poland, have shown mixed results – leaving many officials to warn that the coming months of preparations will be crucial to making the Katowice event a success.
“Recent negotiations in Bangkok on the Paris Agreement’s implementation guidelines made some progress, but not enough,” said UN Climate Change Executive Secretary Patricia Espinosa this week, calling upon negotiators to ramp up their work between now and December.
“We need to see leadership, we need to recognise the urgency we face, and we need to make a commitment to a decisive multilateral response. We have no other option,” she added.
Espinosa also highlighted the recent results of the Global Climate Action Summit in San Francisco, California, earlier this month, where a host of stakeholders from local, regional, and other communities make hefty pledges on how they would contribute towards supporting the implementation of the Paris Agreement. (See Bridges Weekly, 20 September 2018)
“Let this be a call to nations to not only step up their climate ambition, but chart a clear path to the future, and empower bottom-up climate action,” she said.
On the subject of financing, a high-level discussion was held on “Financing Climate Future: Rethinking Infrastructure” on 25 September, with the release of a report from UN Environment, the World Bank Group, and the Organisation for Economic Co-operation and Development (OECD) which warned that the shift towards a low-carbon economy is moving far too slowly. It highlighted among its concerns the continued subsidisation of fossil fuels and the need to harness finance from public and private sector sources into developing the necessary infrastructure for a low-carbon transition.
“OECD analysis has shown that shifting infrastructure investment into low-carbon options combined with structural reforms to support the transition could actually increase global GDP by as much as five percent by 2050, rather than posing a threat to economic growth,” said the Paris-based agency in a news release describing the report.
Climate finance also topped the agenda at the second “One Planet Summit,” held the following day and led by World Bank Group President Jim Yong Kim, French President Emanuel Macron, and former New York City Mayor Michael Bloomberg, who is also the UN Special Envoy for Climate Action.
Financing has proven to be a recurring theme across high-level climate meetings throughout the year. The UN events came just days after the G7 environment ministers’ meeting, held from 18-21 September under the chairmanship of Canada. That event had a suite of topics for its agenda, including climate finance, with the overarching theme being “climate change, oceans, and clean energy” – a notable linkage of issues, and which involved a separate joint ministerial session on sustainable oceans and seas.
It was also the last such ministerial-level meeting under Canada’s presidency, with the rotating G7 leadership role now due to go to France. At the Halifax meeting, ministers tackled topics such as how to facilitate the switch to more low-carbon consumption and production models, along with the role of women and girls in climate action, and the challenges that small island developing states face in accessing climate finance, especially given that they are facing some of the most immediate climate risks.
Carbon pricing and systems for classifying climate finance were also on the agenda, according to a chair’s summary of the event. “Many highlighted that market-based policies such as putting a price on carbon pollution at a sufficient level, developing green finance terminology (taxonomies), and the disclosure of climate-related financial risk help drive sound investment and advance solutions towards countries’ long-term goals,” the summary said.