“Developing countries – already the most vulnerable to the impacts of climate change – are being hardest hit by the economic consequences of the COVID-19 crisis and face a double burden,” explained Yannick Glemarec, Executive Director of the Green Climate Fund (GCF), which hosted the event.
The virtual gathering was held on the sidelines of the High-Level Political Forum on Sustainable Development, the UN’s annual stock take of global prospects to achieve the 17 Sustainable Development Goals (SDGs) by 2030.There was strong consensus among participants that the pandemic has brought the world either to a tipping point or a turning point, with the choices we make today having consequences for generations to come.
During her pre-recorded video message, UN Deputy Secretary-General Amina Mohammed highlighted this “once in a century opportunity to shift the economic paradigm towards more inclusive, carbon neutral and climate-resilient development” and away from unequal growth and a dependence on fossil fuels.
The UN Deputy Secretary-General called on the Green Climate Fund and its partners, including UN agencies, to “support developing countries’ efforts to green COVID recovery measures and accelerate the transition to an inclusive net-zero emission and climate resilient development pathway."
Climate finance has a critical role to play in recovery efforts in developing countries, notably by catalysing and aligning larger domestic and international financial flows to revive economies and foster green, resilient development.“
As the whole world deals with the impact of coronavirus, we must not forget the threat of climate change,” emphasized Lord Ahmad of Wimbledon, UK Minister for South Asia and the Commonwealth. “The UK is the host of COP26 in Glasgow next year and is committed to a sustainable recovery from this devastating pandemic.”
“We are doubling our investment in international climate finance over the next five years to help developing countries tackle climate change, and we are working with the Green Climate Fund and other partners to build a more inclusive and greener global economy,” Lord Ahmad added.
Noting that green recovery requires massive efforts, Qazi Kholiquzzaman Ahmad, Chairman of the Palli Karma-Sahayak Foundation, one of GCF’s national implementing partners with a mission to sustainably eradicate poverty in Bangladesh, pointed out that while “we need green recovery, otherwise we will be much more impacted by climate change disasters, we also need economic and social recovery at the same time” in order to achieve sustainable development.
While stimulus packages have the potential to deliver a triple win – reviving battered economies, progressing the Sustainable Development Goals and advancing climate action – developing countries, particularly those that are highly indebted, have limited fiscal and monetary capacity to fund large-scale stimulus measures like those being pursued by G20 countries.“
This serious inequity underscores the deep unfairness that is likely to underlie recovery efforts in response to the COVID-19 humanitarian tragedy and economic catastrophe,” cautioned Glemarec.
To address this inequity, speakers in the event, “At a Turning Point: Catalysing Climate Finance in the Era of COVID-19,” were asked to share innovative ways to structure global finance and reinforce public-private partnerships to catalyse additional funding to drive transformative climate action.
Remy Rioux, Chairperson of the International Development Finance Club, the leading group of development banks, reiterated that “we are at a turning point.”
“We want to mobilise, structure and incentivise the whole community of public development banks,” just as the GCF is incentivising us, he explained, in order to progress a global, green COVID-19 recovery.
Ken Ofori-Atta, Ghana’s Minister of Finance, suggested that the potential for African countries to tap global finance networks to fund a green recovery is an opportunity “to make some dramatic, tectonic changes” in the global financial architecture to create a structure that is fit for purpose in the future.
In the context of COVID-19 and a better recovery, blended financing instruments would be “effective and efficient drivers for green economic development by bridging financing gaps” to jump start markets and unlock capital for struggling countries, said Mujawamariya Jeanne d’Arc, Rwanda’s Minster of Environment.
“The Green Climate Fund is uniquely positioned to support developing countries,” said Maria Flachsbarth, Parliamentary State Secretary in Germany’s Federal Ministry for Economic Cooperation and Development. “The most important contribution by the GCF in the context of the green recovery is continued support for new – even more – transformative projects and mitigating negative impacts of the crisis on its existing portfolio,” she explained.
Underscoring how the COVID-induced economic slow-down is creating emergencies for small- and medium-sized enterprises in developing countries, Jacqueline Novogratz, CEO of the Acumen Fund, Inc., an impact investor and GCF partner on renewable energy projects and a climate-resilient agriculture initiative in Sub-Saharan Africa, shared that Acumen is discussing a role for GCF in a potential USD 100 million emergency concessionary debt facility. This would be designed to save jobs and enable renewable energy companies to position themselves for success in a post-COVID world.
“This is our moment to move quickly” and for institutions to be very creative, Novogratz stressed, adding that GCF’s leadership in determining how to pursue this will be important because we will not be able do it in an isolated way. “We will only do it together.”
Carter Roberts, CEO of the World Wildlife Fund, a partner with GCF on a forest preservation project in Bhutan, highlighted the connections between zoonotic diseases, such as the coronavirus, climate change, and environmental conservation.
“Forests play an essential role in either advancing or stopping the future spread of pandemics,” he explained. “Not only does the GCF, in collaborating with us and others to halt deforestation, address climate change, but it also addresses one of the root causes of future pandemics at the same time.”
These and other insights from the event will help progress the bold initiatives on how to create a more resilient and equitable world spurred by the High-Level Event on Financing for Development in the Era of COVID-19 and Beyond, co-convened by Canada, Jamaica and the United Nations.