The Paris Summit on a New Global Financing Pact concluded on Friday, June 23, 2023, with little to show on the ambition to truly transform the global financial system to boost climate action and drive development.
By steering closer to private finance sources and tweaking on the edges of existing multilateral development banks, the summit merely dressed the old in new packaging, such as by suggesting “debt pauses“ for poor countries hit by disasters rather than full debt cancellation. As climate impacts escalate, public finance remains critical to address issues such as adaptation and Loss and Damage which remain ignored by private sector players.
While the summit made headway in sending strong political signals on taxing the shipping industry, to reform the global financial system and channel public funding towards addressing the most urgent polycrises of climate change, poverty and development, observers say that far-reaching actions to raise more money from taxing the super wealthy, taxing multinational corporations and making polluters pay are needed.
“We don’t need anymore summits to acknowledge a problem exists. We now need actual actions such as undoing outdated Bretton Woods systems and finalising agreements towards full debt cancellation for poor countries to make sure the money that exists reaches those who need it the most when they need it the most- without conditions and with no strings attached,”.submitted the Climate Action Network (CAN) International, a global network of over 1,900 civil society organisations in over 130 countries working together on a mission to fight the climate crisis.
Harjeet Singh, Head of Global Political Strategy, Climate Action Network International, said: “While the roadmap from the Paris Summit acknowledges the urgency for substantial financial resources to bolster climate action, it leans too heavily on private investments and ascribes an outsized role to multilateral development banks. In doing so, it overlooks the pivotal role that public finance must play in driving policy transformation, stimulating research and development, and investing in green infrastructure to mobilise trillions of dollars.
“Private investments often neglect adaptation efforts in developing countries and are inadequate to address climate-induced loss and damage. Wealthier nations bear the responsibility of urgently funnelling significant public finance towards vulnerable countries. This is at the core of climate justice.”
Teresa Anderson, Global Climate Justice Lead, ActionAid International: “Climate finance is not only about making climate action fair, it’s about making climate action possible. The financial system needs to be totally transformed to help countries drowning in climate-induced debt, to stop fuelling for our planet’s destruction, and to put us on track to survive this crisis.
“Unfortunately, the Paris Summit has not provided the breakthrough needed to find the funding for our planet’s survival. Rich countries are three years late in meeting the already-insufficient target of $100 billion a year in climate finance. The outrage is that most of this money has come as loans which not only push climate-vulnerable countries deeper into debt, but perversely force them to expand fossil fuels and deforestation to cover the costs of debt repayment. It’s disappointing that while global leaders made nice noises about the need to unlock funds for climate action, they simply proposed more loans and temporary debt relief instead of providing real money or cancelling debts outright.”
May Boeve, Executive Director, 350.org: “The summit promised no more blah, blah, blah but too much of this is what has come out. The winner this week was civil society, who rose up and made loud and clear their demand that polluters pay. The money needed for financing climate action exists. The low hanging fruit available to rich government’s right now is a once in a generation opportunity to curtail excess money flowing to fossil fuel companies private bank accounts, and redirect it to communities around the world struggling with the climate and energy price crises. Politicians need to get behind voter sentiment and do this easy first step to tackle the climate and cost of living emergencies, and back the solar and wind energy global revolution that is taking place.”
Rebecca Byrnes, Deputy Director of the Fossil Fuel Non-Proliferation Treaty: “If governments are serious about reforming the current global financial system, they need to move to a truly radical transformation that prioritises a global just transition through new development pathways and tackling climate change at the source – that is, phasing out fossil fuels. The New Global Financing Pact Summit must shift the finance from the industries most responsible for our climate and inequality crises, and commit to mobilising the trillion of new, gran-based financing needed. A Fossil Fuel Non-Proliferation Treaty is the missing legal mechanism that can incentive and enforce the finance needed for a just transition away from destructive fossil fuel production.”
Sanjay Vashist, Director, Climate Action Network South Asia: “There is an urgent need to increase the liabilities and financial contributions from the sectors most responsible. Every barrel of oil, tonne of coal, cubic litre of gas,and every dollar of profit extracted by fossil fuel companies should be taxed. The tax should take into account climate damages according to a global rate based on CO2e extraction but also the profits made by the company. Polluters must pay. This is climate justice.“
Chiara Martinelli, Director, Climate Action Network Europe: “There are major opportunities to shape bold policy responses in 2023, to make polluters pay for loss and damage to vulnerable countries and communities in the Global South.
“In weeks we expect the EU to support a GHG emissions levy on shipping at the IMO. A forthcoming EU financial transaction tax proposal should assign a portion of revenues to the loss and damage fund. The EU should also be coordinating on re-designing windfall taxes on profits into permanent taxes on fossil fuel companies. And to really align its carbon market with the Paris Agreement, EU member states should be dedicating a significant share of revenues from the re-vamped EU emissions trading system to international climate finance.
“There’s a whole menu of options on the table: we expect the EU to lead rich countries onwards from the Summit on this agenda.”
Mariana Paoli, Global Advocacy Lead, Christian Aid: “The exclusion of global south voices from this Paris summit is a big missed opportunity to challenge the policies that have led to the climate crisis.
“It is time we all learn that the world’s rich countries, largest polluters, creditors, tax dodgers and former colonial powers are not offering the solutions to the crises they have been key drivers of. We stand in solidarity with those pursuing truly inclusive economic and climate justice.”
Caroline Brouillette, Executive Director, Climate Action Network Canada: “Leaders from the Global South have showed up to Paris with a multitude of ideas and solutions to the current converging climate and debt crises. But leaders from the Global North, who still control the rules of the unfair international financial architecture, have not shown much appetite for the most transformational proposals.
“In the coming weeks and months, we need rich countries like Canada to do more than recognise the finance gap. They must convincingly move towards implementing a maritime shipping emissions levy, a windfall tax on fossil profits, cancel the debt, and meet their Paris obligations to provide public finance that truly meets the Global South’s needs for mitigation, adaptation and losses and damages.”