Vulnerable nations unite under V20 banner to step up calls for climate finance

James Murray
clock

Finance Ministers issue fresh plea for new mechanisms to help mobilise $100bn a year of climate finance

A group of 20 nations deemed most vulnerable to the impacts of climate change held their inaugural meeting yesterday in Lima, Peru in an attempt to step up pressure on richer nations to mobilise climate finance.

Finance Ministers from the group, dubbed the V20, agreed a series of measures designed to make it easier to deploy finance for climate adaptation and emissions reduction measures in those countries most at risk from climate impacts.

In its first official statement, the group said its goal was to "foster a significant increase" of public and private finance for climate related projects from a wide range of sources.

The past few weeks have seen a host of industrialised countries, including China, announce increased climate finance commitments in the run up to the Paris Summit. However, poorer nations have repeatedly warned funding pledges to date are still well short of the internationally agreed goal of mobilising $100bn a year of climate finance from 2020.

"In the absence of an effective global response, annual economic losses due to climate change are projected to exceed $400bn by 2030 for the V20, with impacts far surpassing our local or regional capabilities," said Cesar Purisima, Finance Minister of the Philippines, in a statement. "Here in Lima, we unite for what we believe is the fundamental human rights issue threatening our very own existence today. Global climate action gives us hope that we can still see a future free from the most devastating effects of climate change."

His comments were echoed by Jose Francisco Pacheco, Vice Minister of Finance of Costa Rica, who said the group was "not a typical group of major economies". "Instead we represent countries put at high risk by the economic failures to address climate change," he added. "We have decided to work together to ensure we are not made victims, but do everything we can to contribute to a resolution to this crisis."

In addition to Philippines and Costa Rica, the group includes Afghanistan, Bangladesh, Barbados, Bhutan, Ethiopia, Ghana, Kenya, Kiribati, Madagascar, Maldives, Nepal, Rwanda, Saint Lucia, Tanzania, Timor-Leste, Tuvalu, Vanuatu and Vietnam.

The group called on negotiators at the Paris Summit to provide more detail on how the $100bn funding pledge will be honoured and acknowledge vulnerable nations' calls for a new temperature target of 1.5C of warming.

They also voiced support for proposals for an international financial transaction tax to aid the mobilisation of additional resources for the fight against climate change and agreed plans to establish a sovereign V20 Climate Risk Pooling mechanism to distribute economic and financial risks and improve national financial accounting models and methodologies to better account for climate change costs.

The launch of the group was welcomed by World Bank Group President Jim Yong Kim. "The world needs stronger voices from developing countries to draw more attention to their great needs for investment in fighting the impacts from climate change," he said. "This new group of 20 countries, led by the Philippines, will play an important role in pushing for greater investment in climate resiliency and low carbon growth at home and internationally."

This article is part of BusinessGreen's Road to Paris Hub, hosted in association with PwC

More on Investment

How rising temperatures harm business sales

How rising temperatures harm business sales

Policymakers need to know how climate change will impact the revenues of affected firms, explains Imperial College Business School's Dr Claudia Custodio

Professor Claudia Custodio, Imperial College Business School.
clock 02 December 2021 • 3 min read
The Llawern solar plant, one of the NextPower UK ESG funds 'seed assets' | Credit: NextEnergy Capital

UK Infrastructure Bank commits £250m to solar investment fund in maiden private sector deal

The new fund is aiming to facilitate the development of 1GW of power from around 30 solar farms across the UK

Cecilia Keating
clock 01 December 2021 • 2 min read
Could GFANZ help the global economy reach net zero?

How global business could be the unexpected COP26 solution to climate change

The Glasgow Financial Alliance for Net Zero (GFANZ) offers a potential model for harnessing the financial world to reach net zero, explains Athabasca University's F. Haider Alvi

F. Haider Alvi, Athabasca University
clock 30 November 2021 • 4 min read