Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Macron backs climate cash trillions

Macron backs climate cash trillions

French president calls for a ‘huge shock’ of climate finance.

Climate change talks have long been stymied over demands for transfers of billions of dollars — on Monday, French President Emmanuel Macron backed a new push for the conversation to be measured in trillions.

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

He called for a “huge shock of concessional financing,” suspension of debt for disaster-struck countries and putting the International Monetary Fund (IMF) on notice.

It was a speech that signaled a shift in tone that developing countries have been long been pushing for.

During the first day of official speeches, leader after leader from wealthy countries highlighted the need to demonstrate “solidarity” with developing countries after a year in which calamitous disasters and a bubbling debt crisis helped reshape the often contentious conversation about climate finance.

"It's the right thing to do," said U.K. Prime Minister Rishi Sunak.

Money is a central focus of this year’s climate talks given the widening gap between what has been pledged and what is needed. It extends from everything from clean energy transitions to hardening countries’ defenses against climate impacts to potential payments for irreparable climate damages.

In 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 forbid, if we are hit tomorrow, we unlock 18 percent of GDP over the next two years, because what we do is effectively put a pause on all of our debt,” she said.

Macron called for the rules of the IMF, the World Bank and other major lenders to be changed to make clauses that halt debt repayments in the event of a disaster far more common.

“What you're asking of us in terms of debt reimbursement and guarantees, when we are affected by a climate shock, when we are a victim of a climate accident, to some degree, there must be a suspension of those conditions,” said the French president.


Broken promises


While the need for finance to spur the transition to clean energy across the world and guard against the ravages of climate change is already stretching into trillions, the U.N. climate system remains stuck on a broken decade-old promise from rich countries. They pledged to deliver $100 billion a year in climate finance by 2020, but that's not likely to happen until next year.

As climate impacts have grown more extreme and prolific, appeals for new and more innovative forms of finance have escalated. Ballooning debt in the wake of the pandemic has heightened those calls, with dozens of vulnerable countries threatening a debt strike in the lead-up to COP27.

Mottley has been a champion of elevating the debt crisis facing nations like her own and highlighting how it adds to climate inequities. The plan she outlined in September hinges on debt relief, increased finance, and new mechanisms for post-disaster recovery, like bonds.

The Barbados leader's call to arms and Macron’s heavyweight backing brought a new reality and scale to the financial discussion.

Mottley has pushed for the IMF's special drawing rights to be put toward helping climate-vulnerable nations recover and respond to climate impacts. That could be used to help unlock far more money from the private sector — $500 billion from the IMF could result in $5 trillion in investments, she said Monday.

The challenge is getting shareholders in those financial institutions to agree to reforms.

Officials in the U.S., Germany and other major economies have pushed for an overhaul of the way multilateral development banks lend to allow them to extend more climate finance. U.S. Treasury Secretary Janet Yellen has called on the World Bank to draft a roadmap by the end of the year that could then be used to drive reform efforts at other development banks.

On Monday, Macron went further, saying that by next spring, global financial institutions would need to devise ways to “come up with concrete solutions to activate these innovative financing solutions and to help us to provide access to new liquidities.”

He paid tribute to Mottley’s “force of character” and said the two leaders — one who commands an economy 600 times larger than the other — had agreed to form a group of “wise minds” to develop suggestions for the overhaul of the international financial system.

But one Mottley suggestion that Macron swerved was her call for fossil fuel companies to pay a levy on their profits into a fund for disaster-hit countries.

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

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Budapest Central European Fashion Week Kicks Off
U.S. Celebrates Labor Day
Hungarian National Team Captain Scores Epic Goal
×