A coalition of finance ministers from around the world on Monday reaffirmed its commitment to climate action amid COVID-19 pandemic.
The coalition, launched in April 2019, is a group of finance ministries that work on a voluntary basis to share experiences and best practices to integrate climate change in the economic and financial policies. The Coalition currently brings together 52 countries from all regions, each representing different levels of development and climate change challenge. Member countries represent about 16% of global CO2 emissions and 30% of global GDP (2017).
The coalition met virtually for its annual plenary session on the margins of the Annual Meetings of the World Bank and International Monetary Fund under the Chairmanship of Ignacio Briones, Minister of Finance of Chile, and Matti Vanhanen, Minister of Finance of Finland.
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It reaffirmed its commitment to the Helsinki Principles and, discussed fiscal, economic and financial policies to tackle climate change amid the challenges posed by the COVID-19 pandemic.
“The human suffering from the unfolding COVID-19 crisis shocks us all,” the ministers said in a joint statement.
“We are taking all measures at our disposal to address the most urgent needs of our citizens and economies, while working to ensure an inclusive, low-emission, resilient and sustainable economic recovery, including through mainstreaming climate change in our decisions.
“We note that the allocation of the announced US$12 trillion of fiscal global economic recovery measures creates a unique window for aligning our economies and policies to the challenge of climate change,” they added.
Finance Minister Ignacio Briones, Chile, Co-Chair of the Coalition of Finance Ministers for Climate Action said he was “encouraged to see the commitment and level of engagement of so many Ministers of Finance from around the world.”
“The fiscal and financial angles of climate change are, without a doubt, very challenging and promising areas of discussion for the coming years.”
Finance Minister Matti Vanhanen, Finland, Co-Chair of the Coalition of Finance Ministers for Climate Action, said the Coalition gave a strong signal to continue the fight against climate change through economic policy measures.
“The COVID-19 crisis will not change this and recovery measures must be designed to align with climate policy targets. The Coalition of Finance Ministers will support its members to achieve this.”
According to the managing director of the International Monetary Fund (IMF) Ms. Kristalina Georgieva, who was also at the gathering, even as the world responds to the COVID crisis, it should also mobilize to prevent a climate crisis.
“climate change is a profound threat to growth and prosperity. It is macro-critical. And macroeconomic policies are central to the fight against climate change. That puts Finance Ministers, and the Bretton Woods institutions in the front row of climate discussion,” she said.
“In our latest World Economic Outlook, we show policy tools can pave a road toward net zero emissions by 2050 even as the world seeks to recover from the COVID-19 crisis.
“We show that these policies can be pursued in a manner that supports economic growth, employment and income equality,” Georgieva said.
The IMF boss acknowledged the steps being taken to respond to the coronavirus economic turmoil, adding that countries should prioritize ‘green investments.”
“First , we are seeing unprecedented policy support – some $12 trillion since the start of the crisis – and countries should ensure that stimulus is targeted towards green investments.
“In the first 15 years of the recovery, this green infrastructure push can boost global GDP by about 0.7 percent on average and create millions of jobs.
“Second, carbon pricing should be at the heart of this strategy, as recognized in Helsinki Principle number 3.
“We know the economic rationale, but it is critical to get the implementation right, including to shield vulnerable people and sectors to ensure a just transition,” she said.
Georgieva said she fears the current Paris framework was not going to deliver the needed reduction of emissions by 25-50 percent in the next 10 years.
“So, I am calling for the negotiations to be supported by agreement among the top emitting parties to adopt a carbon price floor .
“With this price floor covering the majority of global emissions, it would provide clear forward guidance and a solid foundation on which to build global consensus on action to achieve the common goal.
“At the same time, we must recognize the climate crisis is already upon us and we ought to adapt and build resilience to climate shocks. At the IMF we are working with our members – especially the most vulnerable countries – to do exactly that,” she said.