SIDS need $2 trillion annually to address climate change

The University of the West Indies’ virtual Vice-Chancellor’s Forum on The Bridgetown Initiative held on Thursday, March 30, placed expert stakeholder voices and Caribbean citizens at the table.

Referencing the 2022 report of an independent high-level expert group on climate finance, cochaired by Vera Songwe and Professor Nicholas Stern, panellist, Professor Avinash Persaud, special envoy to the prime minister of Barbados for investment and financial services revealed that annually $2 trillion is required for developing countries to respond to the effects of climate change. “That number is bigger than any developing country’s balance sheet. It’s beyond all the philanthropists. It’s a big number. Bridgetown is a system of finance that gets us to $2 trillion a year,” he said.

Host of the forum, UWI Vice-Chancellor Professor Sir Hilary Beckles, convened an impressive team to discuss the matter. In addition to Professor Persaud, on the panel were Malgorzata Wasilewska, head, European Union Delegation to Barbados; Kerrie Symmonds, minister of foreign affairs and foreign trade, Barbados; and Kevin Bender, director Greening Sovereign Debt, The Nature Conservancy.

Giving a historical context for the conversation, Beckles reflected on the 1944 United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire which convened to create a global foreign exchange system. The resulting Bretton Woods Agreement and system birthed the International Monetary Fund (IMF) and the World Bank. He said, “At that time, as Prime Minister Mottley has argued so eloquently, most of the nations in the world were not at the table. Are the Bretton Woods institutions coming to the rescue of these nations, who through no fault of their own have found themselves at the bottom end of the global recovery process? There is undoubtedly a moral crisis.”

BRIDGE-BUILDING ROLE

Speaking on multilateral cooperation in financing climate adaptation, Wasilewska acknowledged the EU’s bridge-building role as new funding arrangements were established at COP 27 (Convention on Climate Change). She, however, also called for funding beyond public purses. “I have to stress that the EU and its member states are the largest providers of climate finance in the world. We will be no less ambitious as we move towards 2027. However public finance will never be enough to respond to the scale of the climate and environment challenge. All actors will need to be onboard and align financial flows with the Paris Agreement goals. This includes the private sector and multilateral development banks,” she said.

Commenting on behalf of Prime Minister Mottley, Symmonds called to the conversation stakeholders of the private sector where egregious profits are made; “the simple moral message really is that if there is no planet then there can be no profits; so, it is well within the interest of some of these companies to also be involved in the conversation”.

The Nature Conservancy representative, Kevin Bender, confirmed that as they have worked with SIDS funding conservation, biodiversity and climate projects, they have found what that Bridgetown Initiative laments. “We have found, similar to the Bridgetown Initiative, that there’s not enough donor money, just like there’s not enough public-sector funding to cover all the needs of climate adaptation and climate mitigatin, so our group is tasked with finding new solutions for coming up with the cash flow for climate protection. The mitigation world is much more conducive to commercial financing. Getting as much commercial financing into that public sector space as possible; I think that is the real opportunity of the Bridgetown Initiative.”

SIGNIFICANT REFORM

Forum moderator, Justin Robinson, professor of finance and pro vice-chancellor board for undergraduate studies, The UWI, said The Bridgetown Initiative proposes significant reform of the global finance architecture in favour of climate-vulnerable countries.

Professor Robinson reiterated the urgent need for the success of the Bridgetown Initiative “It is a critical piece of the pie if we are to attract the significant amount of funding we need for mitigation and adaptation across climate vulnerable nations,” he said.

Persaud was positive, commenting on the likelihood of success he explained, “We’ve thought very carefully about the design of the Bridgetown Initiative. Other efforts have been unsuccessful because they have relied heavily on one set of countries writing very large cheques for others. The Bridgetown Initiative recognises that is not going to happen in the short term.” According to Persaud, Bridgetown calls for $1.7 trillion not to be funded by any government, but by the private sector with the multilateral development banks playing a catalytic role.