V20 Chair Appeal to German G20 Presidency on Climate Change

V20 Chair Appeal to German G20 Presidency on Climate Change

Opinion Editorial by H.E. Mr. Abraham Tekeste, Minister of Finance and Economic Cooperation of Ethiopia, for the Frankfurter Rundschau
Read the original article (German, external link)
After the paradigm-shifting year of 2015, with the Agenda 2030 and the Paris Agreement, it is now time for the G20 economies to put their money and action where their mouth is: to limit global warming to 1.5° requires immediate action everywhere. The survival of the most vulnerable countries depends on it.
As a group of 43 vulnerable countries, the V20 under the leadership of Ethiopia is willing to act at home, reducing emissions, investing in resilience and putting a price on carbon. However, we also need the world’s largest and most powerful countries to continue their effort. They can do that by scaling up financial support and improving the accessibility and predictability of international finance for both climate change activities and development assistance. Developed countries’ financial contributions must significantly increase to Funds that are established to support the concrete adaptation and urgent and immediate needs of developing countries such as the Least Developed Countries Funds (LDCF) and the Adaptation Fund, which are focusing on the most vulnerable, and the Green Climate Fund. This would better equip the developing countries who face financial hurdles to implement their NDCs and countries to collectively achieve the sustainable development goals (SDGs). The German G7 presidency has shown great leadership and played a vital role in putting the need to decarbonize the global economy on the global agenda. Now all eyes rest on Angela Merkel who can show the same leadership during the upcoming German G20 presidency.
For vulnerable countries, the 1.5°C limit is a matter of survival. To hold global warming below that threshold, immediate and swift action by the major polluters is needed. It is of utmost importance that the G20 nations, who are responsible for approximately 85% of global CO2 emissions, develop long-term low greenhouse gas development strategies, as soon as possible, to guide a shift of investment from brown to green and avoid a dangerous and costly lock-in. With its own 2050 climate protection plan, Germany has shown the world how such strategies could be developed. Even if the plan will need further strengthening to be compatible with the 1.5°C limit, it provides an important signal to the global community and to companies and investors that Germany is serious about the path to decarbonization. Next year, Chancellor Merkel now should convince as many of her G20 partners as possible to develop and submit their national 2050 strategies by 2018, in order to inform the global stock take and enable a lifting up of ambitions.
Similarly, businesses need to develop decarbonisation plans, and should undergo stress-testing showing how well they are equipped for a 1.5°-world, and the policies leading towards it.
Infrastructure is vital for sustainable development. There is a huge gap in financing infrastructure in both developing and industrialized countries. The world’s energy and transport infrastructure, but also buildings sector has to be developed in a sustainable, climate resilient manner in order to minimize damages from climate change and provide important services to all people without adding more and more emissions. Investments by international financial institutions and multilateral development banks need to be aligned with the 1.5°C limit – criteria need to be developed and applied that fosters green investments and also stops public money from flowing into old technologies that harm the climate when green opportunities for growth and resilience are available.
It is hard for green technologies to compete in a marketplace where climate finance is marginal and subsidies for fossil fuels are hundreds of billions of dollars a year. We need to change that for the green economy to thrive. Carbon pricing mechanisms are one effective way of shifting the market dynamics to work for the green economy by forcing market actors to account for climate externalities not currently affecting corporate decision-making. Such tools could provide revenues that could be used for investments in low-carbon, climate resilient infrastructure both domestically and, for example through a share-of-proceeds approach for financing much-needed sustainable infrastructure in developing countries. However, the vulnerable countries are going to require significant assistance in capacity and institution building support in order to effectively put in place such market-based tools. It would also make great sense to invest in our South South cooperation so that those vulnerable developing countries that are already making heawdway on such topics, can help the others among us who are just starting out with such initiatives. The 20 billion yuan ($3 billion US) contribution of China to support South South to support climate change adaptation and low carbon efforts of developing countries is a vital contribution that other G20 economies can help to complement.
Germany has already announced there will be a particular focus on Africa during its presidency. This is welcome as our continent is particularly vulnerable to the impacts of climate change. We would like to offer a partnership to Germany and its G20 countries to help insure the most vulnerable countries against climate change and to rapidly develop renewable energy in vulnerable countries around the world and across Africa. Under its G7 presidency, Germany has announced support both for climate insurance mechanisms (InsuResilience) and for renewable energy in Africa. The G20 presidency is an opportunity to further develop and grow theses initiatives and make sure they benefit first and foremost the poorest and most vulnerable. We stand ready to discuss these issues with the G20 presidency just as we are moving to invest the resources at our disposal towards advancing climate-resilient and renewable-powered development.
We would encourage the German G20 presidency to start a formal G20-V20 dialogue where we can work on these pressing issues together in the spirit of cooperation.

New Global Partnership for Preparedness Launched: V20, UN and World Bank Collaboration to help countries get ready for future disasters

 New Global Partnership for Preparedness Launched: V20, UN and World Bank Collaboration to help countries get ready for future disasters

Download the Press Release (English, Pdf, 0.4mb)
PRESS RELEASE
Istanbul, Turkey – Tuesday, May 24, 2016 – A major new partnership to better prepare countries and communities for disasters is being launched today at the World Humanitarian Summit as a united response to a continuing rise in humanitarian emergencies.
The new global partnership for preparedness (GPP) is led by the Vulnerable Twenty (V20) Group of Ministers of Finance of the Climate Vulnerable Forum which represents 43 high risk developing nations in collaboration with UN agencies, including the Food and Agriculture Organization (FAO), the Office for the Coordination of Humanitarian Affairs (UNOCHA), United Nations Development Programme (UNDP) and the World Food Programme (WFP), as well as the World Bank’s Global Facility for Disaster Reduction and Recovery (GFDRR). The partnership will strengthen preparedness capacities initially in 20 countries, so they attain a minimum level of readiness by 2020 for future disaster risks mainly caused by climate change.
Roberto B. Tan, Treasurer of the Philippines, representing the chair of the V20, says that the goal of the partnership with the international community is to make sure that when disasters strike, the mechanisms and support are in place so people can get back on their feet as soon as possible, therefore minimizing the impact on development gains and preventing uncontrolled humanitarian crises. “We know investment in preparedness saves lives and dollars and thus makes financial and economic sense. If we plan ahead, we will create a situation where instead of wave after wave of climate-driven natural disasters destroying what gains communities have made, they can pick up their lives again as soon as possible. Crises such as those from natural disasters and effects of climate change should no longer spin out of control,” Treasurer Tan says.
United Nations Development Program Administrator Helen Clark says: “This partnership will help countries to reach an adequate level of preparedness for disasters and other shocks. The aim is to save lives, safeguard development gains, and reduce the economic impacts of crises. Importantly, this also safeguards development gains, which can otherwise be lost with each disaster, she said. “This new partnership puts at-risk countries in the driver’s seat and brings together the work of development and humanitarian actors in a coherent way.”
Stephen O’Brien, United Nations Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator states: “Extreme weather and other shocks shouldn’t become major humanitarian disasters if we better anticipate and plan for them ahead, and reinforce local response capacity. The global preparedness partnership led by countries most at risk of climate change through the V20 provides a key opportunity to make this happen”.
Laura Tuck, Vice President for Sustainable Development at the World Bank adds: “At the initiative of the Vulnerable Twenty Group of countries, we are joining UN agencies to support a global preparedness partnership to help build strong national and local institutions and ensure that planning and financing for preparedness are integral parts of countries’ disaster management frameworks.”
“The world’s population that depends on farming, livestock, fishing and forests for their food and livelihoods, are highly vulnerable to natural disasters, whether provoked by extreme events such as storms, droughts, floods or earthquakes. Farming remains a key economic activity for millions of people across the developing world and the bedrock of food security,” said FAO Director-General José Graziano da Silva. “This new effort will help build up the resilience of rural communities and boost national capacities to prepare for problems and respond effectively to disasters when they occur,” he added.
“As climate change increases the frequency and intensity of natural disasters, there is a need to shift from a focus on crisis response to taking anticipatory actions to manage risks. The global preparedness partnership recognizes that predictable finance and strengthened government capacity are essential for saving lives and reducing the cost of responding to disasters”, concludes Ertharin Cousin, Executive Director of the UN World Food Programme. 
 The partnership will become operational later this year and seeks to provide the initial 20 countries with support to achieve:
  • better access to risk analysis and early warning;
  • contingency plans with clear lines of responsibility, triggers for action, and pre-committed finance;
  • developing social protection, basic services and delivery systems capable of responding to shocks.
Photo Caption: The V20 Chair (Philippines) and Nepal standing together with UNDP and the World Bank for global preparedness

 

V20 Ministerial Communiqué

2nd Ministerial Communique: Vulnerable Twenty Group of Ministers of Finance

14 April 2016 | Washington DC
2nd Ministerial Dialogue of the Vulnerable Twenty (V20) Group
V20 Communique (English, Pdf, 0.2mb)
Introduction
  1. We met in Washington, DC on this 14th day of April for our second gathering as Finance Ministers of developing economies systemically vulnerable to climate change chaired by Hon. Cesar Purisima, Secretary of Finance of the Philippines with Bangladesh and Costa Rica as Troika Co-Chairs. We reviewed progress in responding to this defining challenge in our time for survival and for the economy, and we advanced our collective work.
  1. We recognized 23 new V20 members considerably strengthening our dedicated cooperation for enhanced economic and financial actions to address climate change while remaining true to the core needs of members most threatened by global warming. Our economies are home to one billion people whose fate hinges on an effective response.
  1. We called for bolder action by the world’s major economies, strengthened international partnership and reaffirmed our intentions to lead, despite our marginal contribution to global emissions, through actions at home to the limits of our capabilities. We take pride in our successful efforts advocating for the landmark new 1.5 degrees Celsius warming target agreed at Paris in December 2015. We now devote our energies to ensuring a financial system consistent with 1.5 degrees and the reinforcing of the resilience of vulnerable groups around the world.
  1. We expressed alarm at the shattering in 2015 of all temperature records and for surpassing a 1 degree Celsius rise in heat above the pre-industrial era norm. Vulnerable countries continue to suffer disproportionately from the fast accelerating rates of the planet’s warming. In past months we have struggled with widespread heavy rainfall, severe drought in Southern Africa, Latin America and the Caribbean, unprecedented cyclones and kingtides in the Pacific and heatwaves in Asia and Latin America. We face coastal flooding and erosion in our low elevation zones, increasingly adverse thermal conditions for much of our workforce, the compounding of regional security challenges and infringements to fundamental human rights. Even at 1.5 degrees, we will experience a considerable progression of impacts and dangers, underscoring the criticality and urgency of investing in increased resilience and adaptation. The impact of climate change, however, affects us all and carries macro-economic repercussions for growth already embedded as a negative weight on the global recovery.
  1. Determined to overcome these challenges, we fight on with renewed hope. Carbon emissions growth stalled for the second year in a row in tandem with global economic expansion. In addition, the past year saw around 90% of new energy production provided by renewables, according to the International Energy Agency, pointing to the clear compatibility of economic and climate change policies and the potential for further change. Strengthening responses to climate change will reinforce global economic recovery and help restore robust, sustained and balanced growth by containing explosive and costly climate change risks that worsen inequalities and harm people, communities and the world economy. Such actions are a humanitarian priority for protecting fundamental human rights.
Our Actions
  1. We presented our Intended Nationally Determined Contributions (INDCs) to reduce emissions under the new Paris Agreement as a first step to action. These INDCs are also the foundations of investment platforms for transformational economic action. Their realization calls for the delivery of additional and concessional international financing that safeguards debt sustainability, as we strive at ambition in communicated national adaptation and mitigation objectives that our Group aims to see realized, if not surpassed.
  1. We are advancing in parallel with the realization of our 2020 Action Plan to foster a significant increase in the level of resources from all sources to support ambition in our national climate actions. In the context of our Work Plan for implementing V20 priorities, we agreed on the commencement of the first phase of our Action Plan with an initial series of National-Regional Consultations to be hosted by Bangladesh and Philippines. We also established Focus Groups of our members to advance our work in the areas of Advocacy and Partnerships, Climate Accounting, and Risk Pooling. We welcomed the support of a wide range of partners and multilateral institutions behind our activities and look forward to building further on our collaborations moving forward with urgency in our response to climate change in the areas of disaster preparedness, financial protection, financial flow analysis, carbon pricing, public-private partnerships and risk pooling.
  1. In the context of our Action Plan, we agreed to enhance financial protection by addressing financial resilience against climate and disaster risks at national and regional levels. This includes a focus on strategies to improve the financial management of climate and disaster risks, and strengthen each country’s ability to recover from climate-related disaster shocks building from core principles of country ownership; sustainability; contingency planning; accountability; and private sector involvement.
  1. We recognize the vital role of the private sector in generating transformation change to the world economy and in our domestic markets. In doing so, we moved to create a platform for collaboration with the private sector focused on investment opportunities associated with responding to the challenges of climate change through innovations in the sectors of energy, transportation, infrastructure, buildings, agriculture, water supplies, well-planned migration, and other areas. The platform will also focus on publics-private partnership best practice, and on policies and initiatives to mobilize investment and other forms of private sector collaboration.
  1. We reiterate our strong support for innovative revenue generating fiscal and financial measures to raise finance, stimulate technological innovation and redirect investment toward climate resilient and low-emissions development. In this respect and with consideration to each country’s respective capabilities, we commit to support carbon pricing by working to establish pricing regimes within the next decade. As a first step towards the realization of that vision, we will begin work with international partners and platforms–including the Carbon Pricing Leadership Coalition and Market Readiness Partnership–to review options and best practices and engage in advocacy to promote similar steps in other markets towards the goal of a greatly increased share of global emissions subject to pricing. We request the Secretariat to prepare a working paper based on these interactions and agree to revisit collective implementation ideas at the next V20 Ministerial Dialogue. We also reaffirm our support for the urgency of carrying out innovative financial measures, including Financial Transaction Tax, as contributions to closing financial gaps between Paris Agreement objectives and the inadequacies of projected flows.
  1. We will continue our work in the area of improving financial accounting including valuation of the costs of climate change and the co-benefits of climate action in order to inform sound and refined economic policy-making domestically and at international level. In particular, we will promote methods and approaches to internalizing the externalities of climate change into finance since the factoring of these costs is essential to altering business-as-usual courses of action and to driving greater ambition. We appreciate and call for further analytical research into the nature of international climate change finance flows with respect to UNFCCC commitments and the independent commitment of developed countries to provide 0.7% GNI in Official Development Assistance. Our work in this domain will continue under the Focus Group on climate accounting.
  1. Extending insurance coverage, ensuring grass-roots access and expanding risk pooling represent tremendous opportunities for increasing resilience to the wide array of climate-related catastrophes that continue to set back the lives of our people. Having reviewed the V20-mandated study prepared by the Secretariat into options for the creation of a V20 Risk Pooling Mechanism, we note that half the population of V20 countries lack access to external pooling mechanisms of any kind. Recognizing the importance of risk pooling for lowering premiums, extending insurance coverage, increasing pay-out reliability and promoting risk reduction, we agreed to move forward with the initiative. Building on the initial study, the Focus Group for Risk Pooling is tasked with developing a complete proposal for the Mechanism within one year in further consultations with key stakeholders.
Paris Agreement
  1. We strongly welcome the adoption of the Paris Agreement on Climate Change and its enshrining of our key priority to limit warming to not more than 1.5 degrees Celsius, keeping temperatures well below 2 degrees. We also welcome the new global goal on adaptation for enhancing adaptive capacity, strengthening resilience and reducing vulnerability and the new significance the Agreement accords to climate justice, human rights and loss and damage. Early ratification/accession led by the vulnerable countries–Fiji, Palau and Marshall Islands–is an immediate priority for all nations, and essential to give effect to the framework. Efforts should immediately be undertaken to implement and increase the ambition of national commitments to achieve compliance with a 1.5 degrees goal, recognizing that higher levels of warming threatens the very survival of a number of our low-lying island members. It is therefore equally imperative that all countries’ long-term low greenhouse gas emission development strategies for communication in 2020 demonstrate consistency with actions to achieve the 1.5 degrees limit. The international community should take advantage of the 2018 facilitative dialogue to take stock of collective efforts to inform these actions including on the basis of the forthcoming UN Framework Convention (UNFCCC) -mandated Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5 degrees that was agreed to this week in Nairobi during the IPCC’s 43rd session.
  1. International public finance commitments including financial support will be vital to enabling an ambitious global response. Capacity constraints facing developing countries are particularly severe for those most vulnerable to climate change. Swifter progress towards the achievement of the joint US$100 billion developed country commitment for support to developing countries, including as a priority via the Green Climate Fund, will build confidence in global efforts and contribute to raising ambition. Global resource mobilization must go far beyond the US$100 billion. We further appreciate the new UNFCCC post-2025 joint finance commitment from a floor of US$100 billion by developed countries in support of meaningful developing country climate action. Important Paris Agreement provisions include the consistency of financial flows with low-emissions and climate-resilient development and the need for grant-based finance for adaptation, which is vital for actions among the world’s poorest groups and informal or non-market sectors. We also strongly welcome UNFCCC decisions on efficient access to financial resources through simplified approval procedures and enhanced readiness support for developing countries which are urgent priorities right now. We appreciate the Capacity-building Initiative for Transparency to support developing countries to meet the enhanced transparency requirements and frameworks including on finance. We welcome UNFCCC decisions encouraging all parties to voluntarily contribute to climate finance and recognize those V20 members that have already funded the Convention’s Financial Mechanism while encouraging all countries to consider similar actions.
  1. We continue our call for the internationally agreed balance of climate change finance to be achieved as an even 50:50 allocation between adaptation and mitigation by 2020 at the latest. Lives, health, fragile ecosystems, and progress towards the 2030 Sustainable Development Goals depend on greater support for adaptation given the socio-economic dimensions of climate change vulnerability with the poorest groups, women and children among the hardest hit. We expect the instruments to the UNFCCC Financial Mechanism to demonstrate progress towards early achievement of the balance and will focus our collective vigilance in that respect. We also call for the integration and continuation of the Adaptation Fund under the Financial Mechanism of the Paris Agreement. We call for additional support for our countries for the reinforcement of critical enabling climate finance mobilization capabilities.
Multi-Lateral Cooperation
  1. We express alignment with the G7 on the long-term objective of applying effective policies and actions throughout the global economy in the response to climate change, including carbon market-based and regulatory instruments. We extend appreciation to the G7 for its pledge to intensify support for vulnerable countries own efforts to manage climate change related disaster risk and build resilience. We welcomed the Financial Stability Board’s task force on climate-related financial disclosures and the establishment of a new G20 Green Finance Study Group to identify institutional and market barriers to green finance and develop options on how to enhance the ability of the financial system to mobilize private capital for green investment including in collaboration with external initiatives. We look forward to collaborate closely on these initiatives and call on the G7 and G20 to recognize the need for efforts to achieve the new 1.5 degrees limit and global adaptation goal. We urge G7/G20 steps to scale up climate action consistent with these objectives in solidarity with vulnerable groups inclusive of moves to implement and raise the ambition of previously communicated commitments by 2020 at the latest. We also expect the low greenhouse gas emission strategies of the major economies to demonstrate clear contributions to capping warming at 1.5 degrees.
  1. We urge further enhancement of the climate change focus of Multi-Lateral Development Banks and International Financial Institutions (IFIs), in the context of country-led/country-driven development and national partnerships, as aligned with ambitious new Paris Agreement objectives. We call for coordinated actions especially in the areas of infrastructure, energy and forestry, for the integration of climate change considerations in macroeconomic projections and Article IV IMF consultations. We request IFIs for innovative financing structures and solutions that respect our requirements for debt sustainability and for support on project due diligence and pipeline development. Such efforts would help leverage the full extent of investment opportunities embodied by our national commitments under the Paris Agreement and unlock further ambition as contributions towards achieving the 1.5 degrees limit and global adaptation goal. We welcome the World Bank Climate Change Action Plan, which we expect will make a significant contribution in this respect. In highlighting our need for mechanisms to pool risk and recalling our forthcoming work on carbon pricing, we also called for dedicated support to expand risk pooling and for readiness assistance on mechanisms for pricing emissions.
Next Meeting
  1. We agreed to reconvene at Washington, DC in October 2016 for the third V20 Ministerial Dialogue and directed the Working Group to continue its activities in advancing the priorities of the Group.

A Word from the V20 Chair

purisimaSpring Message from  H.E. Cesar V. Purisima, Secretary of Finance of the Philippines

The V20 Finance Ministers will gather for the second time this week in Washington, DC. Our attentions will again focus on economic and financial responses to climate change as we follow-up on the landmark Paris Agreement of last December. With temperatures still on the rise, climate change remains a primary threat to our prosperity and to global development.
Addressing the challenges of our climate reality presents enormous opportunities. As the first group of finance ministers dedicated to responding to climate change, we are increasing our level of activity to pioneer innovative responses from across our enlarged membership of more than 40 economies, while remaining true to the core needs of members most threatened by global warming. We are also actively strengthening our partnerships with finance and development institutions and groups, as well as the private sector. We are working for a financial system consistent with the new 1.5 degrees Celsius Paris Agreement target and the reinforcing of the resilience of vulnerable groups around the world.
Without pushing a concrete and viable financial roadmap forward, we risk turning this forum into another talk shop that fails the most vulnerable of our populations. This is a risk we refuse to take. Having worked as an accountant for a large part of my adult life, I know very well that only what gets measured gets done. I do believe however, that there is indeed strength in numbers. Together, we are determined to find clear, definitive solutions for our countries to mitigate and adapt to climate change.
We are very optimistic on the progress of our work. Stay tuned to this week’s events and the outcomes of the 2nd V20 Ministerial Dialogue on Thursday. Join the conversation; help collaborate on global action towards a climate-resilient future.