Summary
1. Keynote speaker Maria Susana Muhamad Gonzalez, Minister of Environment for Colombia, highlighted the challenges many developing countries face of a vicious cycle of higher debt payments, fiscal constraints exacerbated by the impacts of climate change, and the need to transition sectors but the risk of being downgraded in the financial system for doing so. This exacerbates the challenge of fulfilling commitments to an energy transition and ambitious goals on climate and nature. The Minister called for reform of the global financial system so that developing countries can access capital in a fair way for a new cycle of productivity for the transition. We have to move fast to change the financial system and the rules of the game to step up and help countries address the triple planetary crisis. For the transformative agenda the key issue is transition. She said incremental advancement is important but is not at the scale required to tackle the systemic crisis we are facing. For example, government use of taxonomies is important to guide investment in a country to the sectors that will help to tackle environmental and biodiversity issues and will give a clear signal to the financial sector. Keynote speaker Sean Kidney, CEO of the Climate Bonds Initiative said there are ways to redirect financial flows from USD7 trillion invested in destructive economic activities compared to USD250 billion in nature. The green and sustainable bonds market has grown 100-fold to USD4 trillion in 10 years; 52 countries are issuing green and sustainable bonds with UDS52 bn outstanding. Governments are providing support and subsidies for green industries, renewable energy and the climate transition and green transformation.
2. Germany said governments need to provide the national framework conditions and incentive systems, and we can’t manage the crisis without funds from the private sector. Bangladesh said it is important for public and private financial flows to go to adaptation as part of climate finance, and for governments to provide leadership and incentivize the private sector to invest in adaptation. Indonesia recognized the need to take action right now for significant financing for nature-based solutions, including scaling up sustainable finance from business and the financial sector, encouraging and enabling them to reduce negative and increase positive impacts on the environment to reduce emissions and ensure sustainable production. Canada said we need to turn the financial system on its head to work for us, including phasing out harmful subsidies, whether on climate or nature, or plastics linked to fossil fuels. The UK said collaboration is critical for standards and regulations that interlink, as is mobilization of finance to support sound management of chemicals and waste and nature-positive solutions with an integrated approach. The Netherlands said we should consider finance to deal climate change, biodiversity loss and pollution and governments need to reduce risks to make clean investment more attractive for private finance. Gabon called for transformative changes in the market including environmental standards and incentives to unlock resources to invest climate, biodiversity and nature-positive activities.
3. Overall, there was a call for aligning all financial flows with a green transition to nature-positive, circular economies. Countries called for multilateralism to phase out harmful subsidies and apply standards and interlinked regulation universally across sectors for transformative changes in the market. Governments need to reduce risks to make clean investment more attractive for private finance to draw in private capital. Priorities include integrating financial frameworks that supports mobilizing finance from all sources. Governments should do everything in their power as legislators to create appropriate guidelines and incentives to ensure investment decisions that will shape economic and ecological development for decades to come are in line with climate and biodiversity targets. We have to change priorities.
