Summit culminates with pledge of $100 billion for climate finance

The Summit for a New Global Financial Pact in Paris ends with promises of climate finance.

Present at the Summit, IMF Executive Director Kristalina Georgieva and World Bank President Ajay Banga made two important announcements.

The first: the commitment of 100,000 million dollars that would be redirected for the needs of the poorest countries, which would come from the IMF’s international reserve fund.

The second: the commitment to a clause for the most indebted nations, which may activate a suspension of repayments in the event of a natural catastrophe.

These are guidelines supported by US Treasury Secretary Janet Yellen, who said the summit is “an important step in reforming the financial architecture to make it more reactive.”

Yellen also winked at new projects, such as the one announced by the multilateral development banks, so that they can mobilize 200,000 million dollars in lending capacities in the next ten years.

Although during the meeting the failure to fulfill a promise made by developed countries in 2009 was criticized, which expected to release 100,000 million dollars annually from 2020 to help poor countries carry out projects against global warming.

“Total consensus” to finance the fight against poverty and global warming

At the close of the event, French President Emmanuel Macron highlighted a “total consensus” among the participants for the fight against poverty and climate change.

The French president Emmanuel Macron and host of the meeting expressed the need to “reform in depth” the global financial system and announced a follow-up meeting in two years, also in the French capital, to assess whether the objectives are being met.

Macron was emphatic that the participating countries are now in charge of deciding whether to assume their commitments, but he assured that letting the “new consensus” pass is an opportunity that cannot be missed.

“If we fail, we will go to a fragmentation of international institutions,” said the leader of the Elysee, referring to the mistrust that has recently aroused towards international organizations.

Although some leaders had expressed that they wanted to see concrete measures at the end of this summit, their primary objective was to draw up a work path and achieve consensus regarding the positions of the different nations.

“No country should have to choose between fighting poverty and caring for the planet,” Macron said at the start of the Summit.

All the participants agreed that a “financing electroshock” is needed, which aims to unite public and private funds for the protection of the environment, as explained by the French president.

The Summit brought together some forty leaders over two days, including the Brazilian, Luiz Inácio Lula da Silva, the Colombian, Gustavo Petro, and the Cuban, Miguel Díaz-Canel. In addition to leaders of various international organizations, such as Antonio Guterres, Secretary General of the UN.

A maritime transport tax?

In the search for international financing for the projects proposed during the Summit, Macron proposed imposing a tax on maritime transport, one of the sectors that has benefited most from globalization.

A proposal of which he gave more details in this exclusive interview from Paris, carried out by France 24 in the framework of the meeting of world leaders.

However, the International Maritime Organization (IMO) will be in charge of discussing the issue during a meeting with the member countries next July, taking into account their reluctance to have significant interest rates in this area.

The taxes could also be transferred to air transport, since the increase in CO2 emissions by this sector increasingly represents a greater risk for the protection of the environment.

Meanwhile, the participants agreed that it should be reform the International Monetary Fund (IMF) and the World Bank (WB), just as Latin American leftist leaders such as Lula and Petro have mentioned it on different occasions.

“The Bretton Woods institutions no longer work”

Firm with his line of reforming the WB and the IMF, the president of Brazil pointed out that these institutions no longer respond to the aspirations with which they were created and that they do not act in the face of current world interests, assuring that sometimes they make the countries.

The questioning of the progressive president made direct reference to the case of Argentina, after indicating that the IMF “very irresponsibly” gave a loan to the previous government of which, according to him, the consequences are now being seen, with an economy that registers inflation above 100% .

“We cannot continue with the same institutions that work in the wrong way”

The Bretton Woods agreements were signed 78 years ago, on July 1, 1944, in the United States, and their objective was the establishment of a new order based on trade and international financial cooperation, giving way to institutions such as the IMF and the BM.

“We cannot continue with the same institutions that function incorrectly and the same goes for the UN Security Council (…) The representatives of 1945 cannot be the same as today,” said the Brazilian president.

Likewise, Lula took the opportunity to invite leaders to COP30, which will take place in the Amazon city of Belém do Pará in 2025, but before that world leaders will meet in COP 28, scheduled for the end of the year in Dubai.

With EFE and local media