Paris climate summit tries to unlock financing for developing countries

The Paris climate summit convened on Thursday to address the lack of funding for developing countries, with forty heads of state or government in attendance. The priority is to enable those most affected by the climate crisis to alleviate their poverty and fully partake in global economic growth. Despite the French President’s acknowledgment that the country is unable to act alone, he remains optimistic that the global rearrangement of financial policy will have a significant impact. The event will be attended by influential figures, including the UN Chief and representatives of the US, Germany, and China, among others. The summit aims to release a “roadmap” rather than enforce concrete decisions. The central subject of the event is to revitalize 1944’s Bretton Woods agreements by renewing the international financial architecture. The goals include making access to finance more open to developing countries with immense needs in the face of international health hazards and preserving nature. Developing countries, except China, will be required to spend $2.4 trillion per year by 2030, according to UN-led group benchmarks. At the same time, the International Energy Agency claims that non-fossil fuel spending needs to rise from $260 billion to nearly $1.9 trillion per year over the next ten years. One effective idea being discussed is the international taxation of carbon emissions from maritime transport. Other proposals being raised during the event includes institutional reforms, restructuring the debts of poor countries, and strengthening the private sector’s role. The summit aims to address the conspicuous halt to international finance regarding the $100 billion per year promised by rich countries to aid developing countries in managing global warming. The amount may appear small, but “public funding is the seed that will raise trillions,” according to Harjeet Singh of the Climate Action Network. Developing countries need $2.4 trillion a year in funding to combat climate change, support vulnerable populations, and boost sustainable development. Rich countries remain committed to this cause as more than two dozen African leaders and Barbados Prime Minister Mia Mottley notably support the fight for new finance. The event’s success will be measured implicitly over the months following the summit, with bills, institutional policies, and other reform issues being considered. Multilateral development banks will also be obliged to lend more, with the World Bank committing $50 billion over ten years and the IMF’s Managing Director, Kristalina Georgieva, in attendance along with the bank’s new president, Ajay Banga. The event draws significant attention as developed countries will need to deliver on their $100 billion-a-year promise to fund poorer countries.

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