Paris: On the first day of the Summit for a New Global Financing Pact in Paris on Thursday, world leaders heard that the failure to reform the global financial system will prevent the international community from addressing the twin problems of poverty and climate change.
The goal of the two-day conference, which was hosted by French President Emmanuel Macron and included Saudi Crown Prince Mohammed bin Salman, was to find ways to strengthen the lending system for developing nations that are threatened by a climate disaster and are mired in poverty.
In his opening remarks, Macron said that the current system was not suited to deal with these issues and that the world needed a "public finance shock"—a global surge of financing.
Macron said at the summit that countries and policymakers should never have to decide between eradicating poverty and preserving the environment.
In fact, the countries most at risk from climate change-related extreme weather are frequently the ones least prepared to take action to safeguard their citizens or implement their own emissions-reduction plans.
According to experts, the battle against climate change and hardship is already lost in the absence of debt relief for developing nations to address environmental issues or new financing strategies that take into account their priorities for reducing poverty.
World leaders discussed the potential for multi-stakeholder partnerships at a roundtable on the first day of the summit with the theme "A new method: green growth partnerships," which was moderated by Catherine Colonna, France's minister for Europe and foreign affairs.
Also Read: Narendra Modi disputes the existence of religious prejudice in India
When Colonna questioned panellist Abdel Fattah El-Sisi about the common problems brought on by rising temperatures, El-Sisi responded, "Climate change threatens all countries worldwide and requires states to work together to face these challenges."
El-Sisi referred to the COP27 UN climate change conference that took place in the Egyptian Red Sea resort town of Sharm El-Sheikh last November, saying: "We have heard many commitments during COP27, but the major problem that persists concerns access to financing both at the national and international levels."
El-Sisi emphasised access to essential resources like water, food, and energy in his call for the implementation of a fair financing system in all sectors that support sustainable development.
These development initiatives necessitate the formation of partnerships, he said. "We must keep funding initiatives that support the goals of the Paris Agreement. We must keep establishing multilateral alliances with clear programmes focused on sustainable development.
El-Sisi also emphasised the need for recommendations and solutions to reduce or eliminate the debts of developing nations as well as the suspension or cancellation of taxes to allow banks to meet current requirements.
"In Egypt, we have put in place a development plan for renewable energy. To help us with project implementation, we require the support of our partners and international financial institutions, he continued.
The European Commission president, Ursula von der Leyen, urged the creation of a "environment conducive to private capital and to encourage investors to be more involved in energy transition projects" during her own speech.
Access to capital markets, according to her, is crucial.
"At the European Commission, we are interested in the most attractive sectors in green growth, particularly in emerging and developing countries that face limited financing, a lack of training, and an increase in interest rates practised by banks," she added.
"We must share our knowledge and reduce investor risks."
Carbon pricing is another strategy for distributing the costs of climate change. Making polluters, such as transport and logistics firms, pay a tax on their emissions is one way to encourage more environmentally friendly behaviour.
They will have the option of adopting more environmentally friendly practises or paying a tax that will fund environmentally friendly and sustainable projects, von der Leyen said at the roundtable.
"Carbon pricing will generate revenue that will be allocated to financing a greener economy," she continued.
The president of Colombia, Gustavo Petro Urrego, said during a panel discussion that countries should change how they produce goods in industry and agriculture and work together to conserve water.
The mobilisation of billions of dollars is necessary for these strategies, he said, adding that we must reorganise territories and adopt new tactics. "We are all aware that capital is crucial to achieving ecological transition and sustainable development objectives."
Petro called for a global Marshall Plan, a post-war reconstruction fund provided to Europe by the US, to address global issues such as climate change and sustainable development in order to make access to financing more just and equitable.
In addition, he demanded that debt be forgiven for developing nations in return for firm commitments to sustainable development.
On Thursday, a different roundtable discussed how to create conditions that will allow the private sector to develop sustainable infrastructure and provide financing for SMEs.
The post-pandemic global environment will make it difficult to meet the UN's Sustainable Development Goals by 2030, according to Yoshimasa Hayashi, Japan's minister of foreign affairs.
Also Read: U.S.-China relations are marked by dysfunction and dissonance
However, when asked about the role the private sector plays in promoting sustainability and the green economy, Hayashi stated that Tokyo had provided incentives for businesses to invest their own money in the creation of green economy initiatives.
In order to achieve our goals for sustainable development and respect for human rights, he said, "we encourage the private sector to get involved."