Vulnerable Economies Call Rich Nations To Avert Global Climate-COVID Economic Threat
The V20 group launch ambitious “Climate Prosperity” Program to drive resilient, green investments as 48 most vulnerable economies demand “2020-2024 delivery plan” for the missing $100 billion annual Paris Agreement climate assistance.
Led by Bangladesh as chair of the V20, the world’s most climate vulnerable economies met virtually as heads of state and government, ministers of finance and economy, together with leaders of the United Nations, partner economies and the global financial system to address the compound, destabilizing effect of climate disasters and the COVID-19 pandemic on low- and middle-income economies. The ‘Vulnerable Twenty’ (V20) Group of Finance Ministers released a Communique that called for leadership by industrialized nations and cooperation to urgently transform and align the global economic system with the goals of the Paris Climate treaty for a more robust, greener, and equitable recovery.
The first ‘V20 Climate Vulnerable Finance Summit’ was opened by Sheikh Hasina, the Prime Minister of Bangladesh, who also declared “Mujib Climate Prosperity Plan – Decade 2030” in honor of the birth centenary of the Father of the nation on that occasion.
In her speech Sheikh Hasina said, “48 countries under CVF-V20 account for only five percent of the total global emission. But they are the worst victims of the man-made crisis. In addition, the ongoing COVID-19 pandemic has added new miseries claiming lives and affecting the livelihoods of millions. At this critical juncture of human history, we must forge unity and extend cooperation to face the ongoing and future crises”.
The V20 Communiqué urged individual developed countries that have failed their contributions towards ensuring the collective $100 billion per year in climate finance support to take urgent steps to fulfill their part of the agreed funding well prior to COP26, for the sake of international climate action and cooperation. Developed countries were specifically called upon to indicate how and when they will catch up with a concrete ‘Delivery Plan’ outlining the way in which the entirety of the agreed financing will be met during and over the years 2020-2024. The V20 also urged developed countries to align their contributions under UN agreements by allocating public international climate finance to ensure at least 50% of resources for urgent adaptation needs as the climate crisis continued to disproportionately plague economies most exposed to its risks amid the COVID pandemic’s shocks. The Communiqué indicated that annual levels of loss and damage caused by climate consequences in the V20 were already more costly than any amount of climate finance received or promised by the richest, most responsible nations.
The V20 also highlighted several joint initiatives with the G20, Asian Development Bank, World Bank, and UN agencies it is spearheading to respond to actual climate financing needs of economies systemically vulnerable to climate change, including:
A new program of national ‘Climate Prosperity Plans’ to diffuse climate threats on economic progress and seize transition opportunities by prioritizing climate-resilient and low carbon development investments while maximizing socio-economic benefits for 1.2 billion people living in countries most vulnerable to climate change.
A ‘Climate Prosperity Recovery Agenda’ towards fit-for-purpose initiative of the international financial institutions and multilateral Development Banks for climate frontline economies, which pointedly called upon the IMF to practice more systematic surveillance of climate risks of all kinds so as to hold accountable those that finance pollution rather than focus on further penalizing economies facing disproportionate climate risks, and to ensure better access to crisis assistance.
The Accelerated Financing Mechanism (AFM) to bring down the cost of capital by unlocking at least USD 30 billion of private sector investments through optimized financial de-risking for resilient infrastructure and renewable energy, working through MDBs and national banks.
The Sustainable Insurance Facility to provide climate-smart insurance for micro, small and medium-sized enterprises (MSMEs) and part of the InsuResilience Global Partnership to provide financial protection for 500 million people in vulnerable developing countries by 2025.
The V20 encouraged economic partners and multilateral financial institutions to cooperate for the success of these programs while also launching its ‘Vision 2025.’ This V20 Vision sent a clear signal on vulnerable economies’ intentions to leverage trillions in new green investments, overcome capital cost challenges, close the financial protection gap, boost job growth in a just transition for workers, and, to rapidly deploy renewable energy to power economic activities.
Commenting on the Climate Prosperity Plan announcement at the V20 Summit, Prime Minister Sheikh Hasina said, “We would like to call upon the developed countries to reduce their carbon emissions drastically. We also count on the delivery of the agreed $100 billion per annum as climate finance. We also request a COP26-CVF joint program along with the Dhaka-Glasgow Declaration” while she further requested that every vulnerable country may actively consider adopting a ‘Climate Prosperity Plan’ like Bangladesh’s ‘Mujib Climate Prosperity Plan.’
It was also indicated by Bangladesh during the V20 Summit that the CVF-V20 member states are working through a series of regional and global member dialogues to prepare with a view to ultimately launch at UNFCCC COP26 the ‘Dhaka-Glasgow Declaration’ to further put forward the perspectives of the climate threatened nations for a successful outcome to the October-November 2021 Glasgow conference.