A herder moves with cattle in the drought-stricken Somali Region of Ethiopia, June 11, 2023. (Xinhua/Michael Tewelde)

 

The Summit for a New Global Financing Pact will be held in Paris on June 22 and 23. Its stated goal is to build a new contract between the countries of the North and the South to address climate change and the global crisis.

Leaders from countries and regions and representatives of international organizations and civil society associations will participate in the upcoming summit to discuss climate change-related financing issues through six round tables. The discussions are expected to jointly lay the foundation for a new global financing system capable of responding to new challenges, particularly those related to fighting inequality, climate change and protecting biodiversity.

RESPOND TO EXISTING CONCERNS

In a policy brief published in May, UN Secretary-General Antonio Guterres said that the existing international financial system, created in 1945 after World War II, has proven "totally unsuitable in the face of a world characterized by relentless climate change" and other challenges, illustrating the urgency of reforms.

For Stephanie Segal, a researcher at the Center for Strategic and International Studies, climate issues became a "catch-all" term during the Spring Meetings of the International Monetary Fund (IMF) and the World Bank in April.

Climate-related issues are "increasingly recognized as central to the evolution of MDBs (multilateral development banks)," she said.

Eight years after adopting the Paris Agreement, France expects to build a new Paris consensus for "a more united international financial system" to combine the efforts of climate action and reforms of the international financial system.

Noting that "there is today a trust that is crumbling, if not more, between the North and the South" at COP27 in Egypt last November, French President Emmanuel Macron called for financial solidarity for climate justice.

Later, while attending the G20 summit in Bali, Macron announced an intention to hold an international conference "on the new financing pact with the South."

"We are entering the era of the climate emergency," he said. "Today, nothing in our international financial rules takes these criteria into account."

CALL FOR ACTION

To jointly address climate-related issues, the summit in Paris covers the following areas: overhauling the international financial architecture, restoring confidence, forging partnerships for strategies, innovating with instruments and financing, ensuring more reliable information and data, and creating a conducive environment for the private sector.

The summit is expected to help outline the steps needed to reform the financial system and combat the high levels of debt that hold governments down when implementing ambitious climate action. It comes before a flurry of international meetings, including the G20 summit in New Delhi in September, the annual meetings of the IMF and the World Bank in Marrakech, Morocco in October and the COP28 scheduled for the end of the year in Dubai.

France's Minister for Europe and Foreign Affairs Catherine Colonna said earlier that the summit would aim to facilitate the access of vulnerable countries to the financing they need to address the consequences of ongoing and future crises.

"We will take a major step, as we will start by establishing a new consensus," Macron was quoted as saying on the official site of the summit. "The fight against poverty, the decarbonization of our economy in order to achieve carbon neutrality by 2050, and the protection of biodiversity, are closely intertwined."

"We, therefore, need to agree together on the best means to address these challenges in the poor and emerging countries of the developing world, when it comes to the amount of investment, to comprehensive reform of infrastructure like the World Bank, the IMF, and public and private funds, and how to set a new process in motion," Macron said.