Vulnerable countries and partners to climate­-proof economic growth

Press Release (download pdf, 0.2mb)

Vulnerable countries and international partners announce collaboration to climate­-proof economic growth

Washington DC, 11 April 2019 — ­­ Finance Ministers from V20 Group of vulnerable economies today announced new financial instruments in collaboration with international partners at the Spring Meetings of the World Bank Group and International Monetary Fund to ensure continued global economic growth in the face of increasing threats from climate change. The group aims to lower the cost of capital and unlock large capital inflows to climate-­proof the economic development of at least 1 billion people living in some of the fastest­-growing regions, but are exposed to severe climate impacts.

 

“Shortfalls in decisive action persist despite the blueprint provided by the Paris Agreement. We must go far beyond rhetoric. The moment calls for a robust response to protect economic growth from the risks of climate change and secure continued progress,” said Minister Benson Wase, Finance Minister of the Republic of Marshall Islands and current chair of the V20.

 

“Climate change is one of the defining issues of our time, straining the global economy and threatening to reverse development gains and impede future progress,” said World Bank Chief Executive Officer, Kristalina Georgieva.  “The World Bank is committed to supporting V20 countries as they take ambitious action to adopt a low-carbon, climate-resilient growth path.”

 

In the last ten years, climate vulnerability has cost V20 countries an additional US$62 billion in interest payments alone, including US$40 billion in additional interest payments on government debt, according to the Climate Change and the Cost of Capital in Developing Countries report of the UN Environment Programme. Future interest payments due to climate vulnerability are projected to increase to US$168 billion over the next decade. These payments are separate from economic losses directly suffered from climate change, which compound the issue by reducing countries’ ability to invest in climate change mitigation and adaptation measures. For every US $10 paid in interest by V20 countries, an additional dollar will be spent due to climate vulnerability, the report concludes.

 

“The need to accelerate adaptation to make the world more resilient to the realities of climate change is ever more urgent.  There are solutions to tackle this global crisis, and there is concerted action taking place right now to prepare for our future climate reality.  But these efforts must increase and accelerate, and key actors – governments, companies and institutions – must join forces to make a positive difference,” said Patrick Verkooijen, CEO of the Global Center on Adaptation and Managing Partner of the V20 and the Global Commission on Adaptation which is co-chaired by Bill Gates, Ban Ki-moon and Kristalina Georgieva to mobilize strengthened efforts to adapt to climate change.

 

New Investment and Financial Instruments to protect against Climate Risks

 

V20 economies consistently post among the highest economic growth rates worldwide. Yet they do not rank among the countries attracting substantial investment capital. V20 countries face considerable barriers such as higher costs of capital in financing that affect both resilience and renewable energy projects, as well as huge inefficiencies when attempting to access international climate finance.  

 

Responding to the challenge, the V20 has proposed the Accelerated Financing Mechanism (AFM) for Maximal Resilience & a 100% Renewable Energy Transition to upscale existing risk mitigation tools, guarantees and blended finance facilities, and a new menu of instruments within MDBs and other development banks for adaptation, resilience and renewable energy projects.   

 

Another V20 instrument, the Sustainable Insurance Facility (SIF), intends to promote private sector insurance uptake to address climate risks and promote low-carbon development.   It seeks to support the provision of financial protection instruments that strengthen the resilience of micro, small and medium-sized enterprises (MSMEs), including of the various vulnerable groups along the supply chain. The V20 sees SIF as a tool that can crowd in investments in risk reduction, enhance credit access, and better manage public contingent liabilities related to infrastructure and social resilience.

 

In 2018, the V20 formed an initiative with the G20 on the InsuResilience Global Partnership. They introduced the Global Risk Financing Facility (GriF) hosted in the World Bank to help vulnerable countries manage the financial impacts of climate change and natural hazard-induced shocks, and enable resilient debt management.  Through highlighting the need for increased support and ambition for resilient infrastructure investments, the V20 seeks to advance the cost-effectiveness of integrated risk management and financing solutions, and to enhance coherence among the Paris Agreement, the Sendai Framework for Disaster Risk Reduction and the G20’s efforts on adaptation.

 

Formed in 2015, the V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systemically vulnerable to climate change. It is currently chaired by the Republic of Marshall Islands. The V20 membership stands at 48 economies including Afghanistan, Bangladesh, Barbados, Bhutan, Burkina Faso, Cambodia, Colombia, Comoros, Costa Rica, Democratic Republic of the Congo, Dominican Republic, Ethiopia, Fiji, The Gambia, Ghana, Grenada, Guatemala, Haïti, Honduras, Kenya, Kiribati, Lebanon, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Niger, Palau, Palestine, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Samoa, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Vanuatu, Viet Nam and Yemen.

 

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4th V20 Ministerial Communique – Bali

V20 Ministerial Dialogue V – Nusa Dua, Bali, Indonesia

14 October 2018

Download the 4th Ministerial Communique (pdf, 0.1mb)

The V20 has renewed its commitment to promote ambitious efforts to address the global threat of climate change that is placing already severe economic and financial risks above all onto the world’s most vulnerable developing economies. Our economies – with rapidly emerging markets for over one billion people – remain high growth engines of the world economy, but the fragility of that growth is increasing due to climate change and associated transition risks.

 

As confirmed by the publication this month of the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on 1.5 °C, limiting global warming to this level would actually provide for higher global aggregated economic growth, due to lower risks. The IPCC also confirmed that keeping global temperatures within this level remains a possibility but would require drastic and urgent emission reductions of about 45% and a 60-80% lower reliance on coal power by 2030 (based on 2010 levels). Warming of 1.5 °Cwould still substantially increase risks compared to today, while limits to adaptation would be reached in some areas.

 

According to a July 2018 UNEP-mandated report, developed further to the V20 Ministers’ focus on the development policy consequences of green financing, climate change risks could severely penalize V20 economies with 1 dollar of additional costs due to climate vulnerability for every 10 dollars paid in interest. That penalty will double within the coming decade due to rising climate risks with concrete negative consequences for our growth and development prospects. While seeking to unlock investment for ambitious climate action, we continue to face barriers to accessing international climate finance and higher financing costs compared with other economies which raises the investment bar for highly capital-intensive projects to increase our resilience and renewable energy. The resulting continued over-reliance in carbon intensive energy systems, and expansion of insufficiently resilient infrastructure, is building accumulated financial risks. In 2016, Ernst and Young indicated that already €86 billion in carbon-intensive utility assets were written off in Europe(2010-2014) – similar write-offs within V20 economies could severely impair economic stability and growth of our economies. There is a need to ensure macroeconomic stability with regard to addressing energy transition risks and opportunities and the stranding of carbon intensive investments.

 

The October 2018 IPCC Special Report on 1.5 °C indicated that annual investment of around 2.5% of the world GDP or 2.4 trillion US dollars (2016-2035) will be needed to keep warming within 1.5 °C, a level consistent with the survival and prosperity of V20 economies. We also confirm the IPCC view that directing finance towards investment to achieve this into infrastructure for climate resiliency and reduced emissions could provide additional resources, including the mobilization of private funds by institutional investors, asset managers and development or investment banks, as well as the provision of public funds. We recognize that government policies that lower the risk of low-emission and adaptation investments, and provide enabling environment for these, can facilitate the mobilization of private funds and enhance the effectiveness of other public policies. Sustainable development also supports, and often enables, ambitious climate action so that the pursuit of climate-resilient development pathways can help to eradicate poverty and reduce inequalities.

 

In order to hasten the urgently-needed acceleration global transition to climate resilient and low carbon development, we need to deepen international collaboration and cooperation. Building on dialogue already begun between the V20 and G20, and collaboration between these two groups in the context of the InsuResilience Global Partnership forClimate and Disaster Risk Finance and Insurance Solutions, the V20 is committed to pursuing stronger international economic and financial cooperation on climate change to further mutual interests. The scale, predictability and accessibility of international climate finance needs to be enhanced in order not to forgo opportunities for ambitious climate action by vulnerable developing countries that would benefit the world economy, and to unlock large-scale finance in support of this. Enhancing the capacities of V20 Ministries of Finance to address and engage in climate change efforts is also an urgent priority of this Group. We express thanks for assistance already provided to the V20 in that regard, and call on our development partners, including donors and Multilateral Development Banks to support our efforts to enhance such capacity particularly through South-South and triangular, as well as conventional technical, cooperation.

V20 Activities

 

  1. We congratulated Ethiopia for its presidency of the V20 Group and the Marshall Islands for assuming the chair.

 

  1. In furtherance of collaboration and cooperation between the V20 and G20, we pursued the following issues:
    • The forging of the InsuResilience Global Partnership as a concrete initiative between V20 and G20, and example of the type of international cooperation that could develop between V20 and G20 economies; and,
    • Convened the 2ndhigh level V20-G20 dialogue today, furthering and deepening discussion and collaboration, and deepened our discussions on the mutually identified interest areas of:
      • Increasing ambition of climate efforts and fostering exchange and capacity in support of this,
      • Alignment of financial flows and Multilateral Development Bank financing with Paris Agreement goals,
      • Implementation of the Financial Stability Board (FSB) Task Force on Climate-Related Financial Disclosures, and
      • Accelerating fossil fuel subsidy reform and support for V20 carbon pricing efforts.

 

  1. We welcomed the holding in Bali of the first V20 Joint Technical Committee on Multi-Country Financing Initiatives, and the development of two V20 initiatives towards applying innovation in climate finance in support of ambitious climate action:
    • The V20 Sustainable Insurance Facility; and
    • A V20 Accelerated Financing Mechanism for Maximal Resilience and 100% Renewable Energy.

We look forward to the further development of these initiatives, including to advance mutually held priorities together with partners, and encourage these to consider support towards their successful development.

 

  1. Building on the work of the V20 Focus Groups, with last meetings in Addis Ababa (August) and Bali (October):
    • V20 plans to step-up its advocacy and engagement to advance efforts on climate change;
    • V20 is developing a collective viewpoint on the status and development of international climate finance as a contribution towards more efficient and improved financial flows in support of climate action;
    • V20 is advancing with implementing domestic carbon pricing mechanisms and will foster exchange and capacity to further this work, with the support of partners;
    • V20 aims to enhance its tracking of climate change public expenditures and co-benefits;
    • Encouraged by the interest shown by V20 members in the Global Preparedness Partnership (GPP), a partnership between V20 and UN system partner agencies, we reiterate our call on international partners to ensure financial support towards the operational implementation and support for V20 members to reach a minimum level of disaster preparedness so that disaster events can be managed locally with reduced need for international assistance;
    • V20 will further study and promote International Financial Institution responses to ensure macroeconomic stability addressing energy transition risks and opportunities and the stranding of carbon intensive investments.

 

  1. We resolved to continue our V20 Regional Consultations towards improved understanding of member challenges and best practices in climate finance, and enhanced capacity to address these, building on Asia-Pacific, with planned 2019 meetings for Africa-Middle East in Addis Ababa, Ethiopia and for Caribbean-Latin America in Bridgetown, Barbados.

 

  1. We endorsed a V20 contribution to our Heads of State and Government towards a successful outcome of the Climate Vulnerable Forum Virtual Summit, and called upon World Leaders to fully engage with this critical activity towards enhanced political momentum for increased national efforts on climate change by all countries in 2020 if not before.

 

Climate Finance

 

  1. We highlighted the continued efforts of V20 member to work as pioneers in financing climate change action, and seeking to apply innovation in climate finance at home.

 

  1. We signalled our concern on the delivery of the US $100 billion 2020 collective commitment of the developed countries and continue to look forward to clarification on these countries’ addressing of the US withdrawal of the Paris Agreement and of related climate finance commitments, in addition to the extent of the Roadmap’s resources being new and additional.

 

  1. We highlighted the significance of the Green Climate Fund (GCF) and the criticality of its further replenishment and effective functioning and delivery on its mandate to promote a paradigm shift to low-emission and climate-resilient development, taking into account the needs of nations that are particularly vulnerable to climate change impacts. We underscored the importance of effective governance of the GCF and a more robust understanding of imbedding climate resilience with respect to long-term development policy and improvement of funding delivery as well as of innovative financing modalities.

 

  1. We signalled ongoing challenges with accessibility, transparency and predictability of international climate finance resources through different funds, channels and mechanisms, and called for continued and increased efforts to render such finance more compatible to the needs and capabilities of vulnerable developing countries and the imperatives of urgent action against climate threats.

 

  1. We reiterated our plea to ensure a 50:50 balance of international climate finance (between adaptation and mitigation) in the national contributions of donors and overall, highlighting the need for continued progress to ensure adequate finance is available to protect vulnerable people and economies from rapidly increasing climate change extremes and risks, enabling adaptation and promoting resilience and progress towards the Sustainable Development Goals.

 

 

We resolved to reconvene at Ministerial level at Washington, DC in April 2019 and to intensify our collaboration and implementation of the V20 Work Plan in the intervening period.

 

 

The Vulnerable Twenty Group of Ministers of Finance

 

Nusa Dua, Bali, Indonesia – 14 October 2018

 

Vulnerable Economies Call for Accelerated Financial Shift

PRESS RELEASE

V20 Group fears carbon-intensive energy systems could impair economic stability

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V20 Ministerial Dialogue V Communique (pdf, 0.1mb)

Bali, 14 Oct 2018–  Finance Ministers from the V20 Group of climate vulnerable countries today sought large-scale changes to global finance flows, saying the funding shift needs to happen sooner, covering far larger amounts that can help protect economies from the worsening impacts of climate change. Convening at the World Bank-IMF Meetings in Bali, V20 countries said “the need to unlock investments for ambitious climate action is not only urgent but an absolute necessity given combined impacts from economic and climatic threats.”

 

In its official communique, the group expressed fear that continued over-reliance on carbon-intensive energy systems is building accumulated financial risks globally.  It highlighted an Ernst and Young report which indicated that €86 billion in carbon-intensive utility assets were already written off in Europebetween 2010 to 2014. Similar write-offs within V20 economies would severely impair economic stability and growth of their economies, it said.

 

The International Panel on Climate Change (IPCC) has recently prescribed USD$2.4 trillion to fund societal changes that could help keep warming within 1.5C, a level consistent with the stability and continued economic progress among climate vulnerable economies.  The IPCC’s  Special Report on 1.5C Degrees also confirmed  limiting global warming to 1.5C would provide for higher global aggregated economic growth due to reduced risks. According to the scientific body, keeping global temperatures within the 1.5C level remains a possibility but would require drastic emission reductions of about 45%, and a 60-80% lower reliance on coal power by 2030 (based on 2010 levels).

 

“Industrialized countries and the global financial community must go beyond rhetoric and urgently tip the balance of global finance towards strong climate action that benefits the world economy. We are facing an existential threat, but we are hopeful the climate challenge will be met with bold ambitious action,” said H.E. Brenson S. Wase, Finance Minister of theRepublic of the Marshall Islands, the new chair of V20. “We need to deepen international collaboration to hasten the world’s transition to climate-resilient and low carbon development.”

 

While in Bali, the World Bank, G20 and V20 announced a joint USD$145 million initiative tohelp vulnerable countries access risk financing and insurance solutions for climate and disaster shocks. This supports the Global InsuResilience Partnership, which was born out of close V20-G20 cooperation in 2017. The V20 is seeking further cooperation with the G20 in accelerating fossil fuel subsidy reform as well as support for V20 carbon pricing efforts.

 

The V20 said it further signaled its concern over delivery of USD$100 billion pledged by industrialized countries for the Paris Agreement, in light of the US withdrawal from the global treaty.

 

The V20 is a grouping of Ministers of Finance within the Climate Vulnerable Forum and is a dedicated cooperation initiative of economies systemically vulnerable to climate change. It is currently chaired by the Republic of Marshall Islands.

 

V20 members include Afghanistan, Bangladesh, Barbados, Bhutan, Burkina Faso, Cambodia, Colombia, Comoros, Costa Rica, Democratic Republic of the Congo, Dominican Republic, Ethiopia, Fiji, The Gambia, Ghana, Grenada, Guatemala, Haïti, Honduras, Kenya, Kiribati, Lebanon, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Niger, Palau, Palestine, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Samoa, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Vanuatu, Viet Nam and Yemen.

2018 V20 High Level Events at Bali

V20 Ministers of Finance will convene in Bali, Indonesia for the V20 Ministerial Dialogue V and related preparatory events during 10–14 October 2018. The meeting advances the work program of the V20 initiative, under the new V20 president, Marshall Islands, will serve as a preparatory event for the 2018 Climate Vulnerable Forum Virtual Summit, and will resume high level dialogue between the V20 and G20.

The V20 serves as a dedicated and regular high-level forum of exchange and action led by the Ministers of Finance of economies systemically vulnerable to climate change.

The V20 High Level Events at Bali (October 2018):

  1. V20 Ministerial Dialogue V and 2nd V20 Dialogue High-Level Representatives of the G20): 9:00am – 10:30am on Sunday October 14 in Pecatu, Ground floor in BNDCC2 (Bali Nusa Dua Convention Center 2) (open to select observers).
  2. V20 Deputies/Senior Officials Meeting: 09:00am – 10:30am on Saturday, October 13 in Bougainville/Orchid, 1st floor, Westin Resort (closed meeting).
  3. V20 Working Group (V20 Focus Groups IV and 1st V20 Joint Technical Committee Meeting): 12:00pm – 2:00pm on Wednesday, 10 October 2018 in Uluwatu 5 Room – BNDC (closed meeting).

 

Participation in the fourth V20 Ministerial Dialogue is by invitation only and subject to registration for the World Bank and IMF Fall Meetings. Accredited media will be invited to attend a segment of the meeting.

 

Photo caption: 2018 IMF / World Bank Group Annual Meetings at Bali Indonesia, October 2018 (licence: CC BY-NC-ND 2.0) Photo Credit: World Bank.

 

 

V20 Meetings at Addis Ababa

The V20 held a series of meetings in conjunction with delegates of the Climate Vulnerable Forum meetings on Monday 27 and Tuesday 28 August 2018 in Addis Ababa, Ethiopia.

The meetings included the V20 Focus Group Meetings III, an inception discussion on the V20 Joint Technical Committee Meeting on Multi-Country Financing Initiatives, a joint CVF-V20 Troika Meeting, and a High Level CVF-V20 Presidency Handover Reception. The event saw the participation of V20 Delegates, CVF Delegates, Technical Partners and expert invitees. The presidency handover marked the conclusion of Ethiopia’s two-year presidency of the CVF and V20 and its handover to the Marshall Islands, now new CVF and V20 Chair.

Read the press release regarding the handover of chairmanship from Ethiopia to the Marshall Islands.

The meetings focused on reporting from the V20 Chair on progress on 2017-2018, the V20 Work Plan inclusive of the InsuResilience Global Partnership (IGP) and green finance. The meeting also discussed reporting from the CVF Chair on 2017-2018 activities.

Meeting Outcome Documents

Following the meeting, the following outcomes will be made available to V20 members/partners:

  • Summary Report of the V20 Focus Group Meetings III
  • V20 Focus Groups Key Milestones 2018-19
  • Summary Report of the CVF-V20 Troika Meeting
  • V20 Advocacy and Engagement Plan

 

Marshall Islands New V20 Chair

PRESS RELEASE

Marshall Islands New CVF & V20 Chair

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  • Ethiopia concluded its 2-year term as president of the CVF and V20 Group
  • CVF-V20 Officials met at Addis Ababa

Addis Ababa, Ethiopia–Tuesday 28 August 2018: The Federal Democratic Republic of Ethiopia concluded its chairmanship of the Climate Vulnerable Forum (CVF) and the Vulnerable Twenty (V20) Group of the member states of the CVF with a handover ceremony held at Addis Ababa today transferring presidency responsibilities to the Republic of the Marshall Islands.

Speaking at the event, H.E. Dr. Gemedo Dalle, Minister of Environment, Forest and Climate Change said:

“The Marshall Islands gives us hope. They are very vocal and committed to fighting climate change. The CVF is in safe hands. We strive for 1.5°C to thrive and we can do this together. The dream of a safer world needs the cooperation of all countries, and of every man, woman, and child.”

Accepting the responsibilities of the Forum chairmanship, Mr. Carlsan Heine of the Office of the President of the Marshall Islands said:

“We have come together on climate change and we will continue to fight together on climate change. The Marshall Islands stands on the shoulders of the giants of this Forum who came before us as we seek to implement the CVF Vision and the core priorities of the V20 Finance Ministers. We are proud that a Pacific island nation of less than 100,000 inhabitants under female leadership will take forward this global Forum at this critical moment.”

The Marshall Islands is convening an entirely online Virtual Summit of the Climate Vulnerable Forum on 22 November 2018 and it was indicated that the Summit would be front and center of the Forum’s work for the remainder of 2018.

The handover ceremony took place in conjunction with meetings of the V20 Focus Groups and a CVF-V20 Troika Meeting held at Addis Ababa from 27-28 August 2018, gathering senior CVF and V20 officials from different world regions.

David meets Goliath: First ever V20 – G20 meeting highlights the mutual benefits of climate action

V20- - 1

Blog post by Gerrit Hansen, Germanwatch, April 2017
http://germanwatch.org/en/13801

The climate vulnerable forum (CVF), now uniting 49 of the world’s countries most vulnerable to climate change, has again taken centre-stage in the fight against global warming and for an equitable international climate regime. At the recent IMF and World Bank spring meeting in Washington, the finance ministers of the group, the Vulnerable 20 (V20), met with representatives of its “big brother”, the G20, to discuss issues related to climate finance, effective mitigation policies, support for adaptation and resilience and above all: enhanced cooperation.

After their vital role in negotiating the landmark Paris climate agreement, and anchoring the 1.5 degree temperature goal the group has repeatedly positioned itself as a global leader in innovation and ambition – despite their limited economic prowess. In their Marrakesh Communique launched 2016 during COP22, the CVF pledged to transition to 100% renewable energy provision as soon as possible, and by mid-century at the latest. A report commissioned by the CVF and UNDP underscores that the quest to stay below 1.5°C global warming represents an opportunity to leap-frog into better, healthier, more stable and independent renewable economies.

The V20 brought that spirit to the table in Washington: urging the worlds’ most powerful economies to follow suit and embrace the opportunity offered by the modernization and greening of their economies. The V20 Ministerial Communique adopted at the 4th Ministerial Dialogue later that day states: “Insufficient resources from climate protection will only create economic instability. Investing in climate action, by contrast, is critical to inclusive development, job security and economic growth. This is an opportunity not just for the V20 economies but for the developed economies as well.”

The V20 called on G20 countries to deliver ambitious climate change action as part of the G20 outcome in July. “For vulnerable countries, the 1.5C limit is a matter of survival. It requires immediate and swift action by the global community, and above all, the major industrial powers,” said H.E. Macaya Hayes, Ambassador of Costa Rica to the USA. “We set our sights towards 2018, the trigger year when all countries, especially the major industrial powers, need to commit to enhance their climate ambition before the end of the decade.”

During the meeting, speakers from Marshall Islands, Ethiopia, Costa Rica, and Barbados urged G20 countries to deliver their long-term low-emissions development strategies before 2020, and join the V20 in leading towards universal coverage of emission through carbon pricing by 2025. A particular emphasis was put on the need to end fossil fuel subsidies. The V20 recognized the need to be rigorously checked whether fossil fuel consumption subsidies provide an actual benefit to the poor, and subsequently design their replacement worldwide without harm to those relying on them for their basic energy needs. However, the group is much stricter when calling for the end of market distorting fossil fuel production subsidies. The latter should be removed immediately and no later than 2020, and the G20 should adopt a clear timeframe for fossil fuel subsidy elimination – which the G20 fails to deliver since 2009.

However the V20 did not only appeal to the major emitters. In keeping with their frontrunner-tradition, the V20 announced it would pioneer innovation in climate finance to help secure continued economic development among its members while tackling the costly economic impacts of climate change. They decided to establish a Task Force of independent experts to assess the financial requirements for climate action consistent with the Paris Agreement, with a view of delivering maximal resilience and a low carbon development consistent with 1.5 degrees Celsius. They also resolved to establish a technical committee to develop multi-country financing initiatives towards the advancement the V20 Action Plan and its aim of attaining a significant increase in climate investment in V20 countries.

While the G20 finance ministers remained strangely silent on the matter, the V20 welcomed the recommendations from the Financial Stability Board Task Force on Climate-related Financial Disclosures, highlighting that the compatibility with the 1.5 degrees limit should be integral part of what these disclosures should assess. V20 pledged its collaboration in the effective implementation of those recommendations, and in further study of the development policy implications of green finance and risk instruments. While reiterating the criticality of the $100 billion commitment and the need to significantly upscale concessional financial means via Multilateral Development Banks for achieving transformational change in line with the Paris Agreement the V20 also stressed the need to increase prioritization of adaptation finance to ensure a 50:50 balance of finance for adaptation and mitigation by 2020, calling for continued scaling up of financial support in a balanced manner.

The value of the V20-G20 dialogue that has now been initiated was clearly recognized by G20 and V20 representatives present at the meeting. It can become an important engagement tool that highlights how climate action is mutually beneficial to different economies. As a next step, this partnership ought to be pursued and deepened with common goals. The V20 Communique concludes that “it is time to act strategically to advance truly transformational programs that redesign nothing less than the investment agenda of the world economy.”

V20 economies announce new climate finance initiatives

Call for strong climate outcome at G20 Summit in July

Download the Press Release (English, PDF, 96 kb)

Photos of the event (Flickr)

Washington, D.C., 23 April 2017 – Climate-vulnerable economies comprising the Vulnerable Twenty (V20) Group today expanded its membership, and announced it would pioneer innovation in climate finance to help secure continued economic development among its members while tackling the costly economic impacts of climate change.  The group said it is seeking ambitious climate action from G20 economies.

V20 officially confirmed the membership of Colombia, Lebanon, The Gambia, Palestine and Samoa, while also announcing the future chairmanship of the Marshall Islands from October 2018.  The group is currently chaired by Ethiopia.

“Today, the V20 achieved a number of important milestones with our strategic dialogue with the G20, as well as by initiating concrete initiatives to help V20 members finance climate action in their respective countries,” said H.E. Abraham Tekeste, Minister of Finance and Economic Cooperation of Ethiopia.

The V20-G20 dialogue aims to deepen strategic partnership between the two groups to redesign the investment agenda of the world economy. Representatives realized they had much in common in terms of aims to establish financial instruments that boost climate-friendly investments and energy transition. In addition, the V20 urged G20 countries to deliver their long-term low-emissions development strategies before 2020, and to include ambitious climate action as part of the G20 outcomes in July.

The concrete steps pursued by climate-vulnerable countries include low-emission development, shift in financial flows towards achieving 100% renewable energy, and stronger risk financing and insurance for vulnerable economies.

In its recent Communique, the V20 warned the G20 that pulling resources from the Paris Agreement will create economic instability. The V20 said investing in climate action is necessary and critical for inclusive development and economic growth.

“For vulnerable countries, the 1.5C limit is a matter of survival. It requires immediate and swift action by the global community, and above all, the major industrial powers,” said H.E. Macaya Hayes, Ambassador of Costa Rica to the USA.  “We set our sights towards 2018, the trigger year when all countries, especially the major industrial powers, need to commit to enhance their climate ambition before the end of the decade.

Developed economies have pledged $100 billion per year to finance steps enshrined in the Paris Agreement to limit global warming to no more than, if not well below, 1.5 degrees. The V20 welcomed the Roadmap presented by developed countries, outlining a pathway towards achieving their finance mobilization target.

 

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V20 Ministerial Communiqué: Ministerial Dialogue IV

Ministerial Dialogue IV of the Vulnerable Twenty (V20) Group

23 April 2017 – Washington, DC

Download the Communiqué (English, PDF, 0.5mb)

Photos of the event (Flickr)

 

The V20 countries are both the world’s most vulnerable economies and the most promising ones in terms of growth potential. That potential, along with our and other countries’ very existence, is threatened by climate change. Faced with this challenge and a tremendous urgency for climate action, all financial flows, including those of multilateral development banks, should be aligned with the Paris Agreement, the 1.5 degrees Celsius temperature limit, and our members economies’ 100% renewable energy vision in support of sustainable development.

Insufficient resources for climate protection will only create economic instability. Investing in climate action, by contrast, is critical to inclusive development, job security and economic growth. This is an opportunity not just for the V20 economies but for the global economy as well.

The V20-G20 dialogue, initiated today, is an important engagement tool in that regard; one that highlights how climate action is mutually beneficial to different economies. We need to pursue and deepen this engagement with a spirit of international partnership along commonly held goals. It is time to act strategically to advance truly transformational programs that redesign nothing less than the investment agenda of the world economy.

V20 Activities

  1. We welcomed and confirmed five new V20 members and designated the Marshall Islands as the future Group Chair from October 2018.
  1. Towards the realization of the V20 Action Plan, members have begun efforts to mobilize a significantly higher level of financial resources for member climate action by 2020, commencing with a first Regional Consultation for the Asia-Pacific, held at Manila, Philippines on 8-10 March 2017. Further consultation efforts are planned, including the V20 Regional Consultations for the Caribbean and Latin America (July 2017) and Africa and the Middle East (September 2017).
  1. We have decided to establish a Task Force of independent experts to assess the financial requirements for climate action consistent with the Paris Agreement, with a view of delivering maximal resilience and low carbon development consistent with the 1.5 Celsius limit.
  1. The V20 Focus Groups on Advocacy and Partnerships, Climate Accounting and Risk convened in November 2016 at Marrakech, Morocco and in March 2017 at Manila, Philippines.
  1. We thank the Asian Development Bank, the United Nations Development Programme and the World Bank Group for its involvement in the V20 Regional Consultations to-date and encourage broad cooperation with Regional Multilateral Development Banks in the V20 Action Plan.
  1. Further to the 2017 V20 Disaster Risk Financing Workshops, we request the World Bank to provide V20 members with capacity building and financial support to develop their institutional capacity as a part of their broader fiscal risk management agenda and to provide financial and technical support to implement the activities of the V20 Focus Group on Risk.
  1. We endorsed the Framework Document for the Global Preparedness Partnership, and resolved to form a sub-committee to oversee its operationalization together with key partners.

 

Climate Finance

  1. V20 Members continue to pursue ambitious climate action and to pioneer innovation in climate change financing with leading global examples in renewable energy access, ecosystem services and micro-insurance solutions that have changed lives and expanded sustainability at scale.
  1. We urge the G20 countries to deliver their long-term low-emissions development strategies before 2020, and call on them to deliver ambitious climate change action as part of the G20 outcome in July. Pulling resources from climate protection will create economic instability. Investing in climate action is necessary and critical to inclusive development and economic growth.
  1. In a significant step, we have resolved to establish a technical committee to develop multi-country financing initiatives towards the advancement the V20 Action Plan and its aim of attaining a significant increase in climate investment in V20 countries through the member driven application of financial innovations in collaboration with our wide-ranging partners while leveraging finance in all its forms.
  1. Challenges and difficulties in accessing international climate change finance persist and continue to hold back the realization of national climate actions in vulnerable developing countries. Delivering the Paris Agreement will require financial flows to increase in both scale and predictability.
  1. We welcome the Roadmap presented by developed countries outlining a pathway to achieving their $100 billion per year joint climate finance mobilization target, which is the collective responsibility of all the developed countries to deliver on. We look forward to further clarification on the extent to which the Roadmap’s contributions will provide new and additional resources.
  1. We emphasize the criticality of the $100 billion commitment and the need to significantly upscale concessional financial means via Multilateral Development Banks for achieving transformational change in line with the Paris Agreement and its objective of limiting warming to no more than, if not well below, 1.5 Celsius.
  1. We reaffirm the need to increase prioritization of adaptation finance to ensure a 50:50 balance of finance for adaptation and mitigation by 2020, calling for continued scaling up of financial support in a balanced manner. We welcome those developed countries that have already achieved, or are nearly at, a 50:50 balance in their international climate change finance contributions between adaptation and mitigation. Today, these countries include Belgium, Germany, Ireland, Netherlands, Sweden and Switzerland, but we believe more can join them and we will celebrate those who do.

 

Financial System

  1. We welcome the recommendations from the Financial Stability Board Task Force on Climate-related Financial Disclosures, while highlighting that the compatibility with the 1.5 Celsius limit should be an integral part of what these disclosures address.
  1. We reaffirm the V20’s interest to engage in discussion and collaborate towards the effective implementation of the Task Force recommendations, as well as to work with UNEP Inquiry to further study the development policy implications of green finance and the Task Force’s recommendations.
  1. We call for market distorting fossil fuel production subsidies to be removed immediately and no later than 2020, and urge the G20 to set such a clear timeframe for fossil fuel subsidy elimination. Fossil fuel consumption subsidies need to be checked rigorously whether they provide an actual benefit to the poor, and subsequently should be replaced worldwide without harm to those relying on them for their basic energy needs.
  1. We call on the G20 to lead with the V20 in a drive towards ensuring all emissions are subjected to carbon pricing.
  1. Further to the V20 commitment to work to put in place carbon pricing mechanisms by 2025, we highlight the progress made by a number of members towards this end, and call for additional support from International Financial Institutions to assist the efforts of members in this respect.
  1. We agreed to continue to expand the dialogue with the G20 and our advocacy with international financial institutions. We shall reconvene in an expanded format in October 2017 in conjunction with the Annual Meetings of the International Monetary Fund and World Bank Group and will assure the economic and financial preparation of the 2018 Summit of the member states of the Climate Vulnerable Forum in conjunction with relevant government and other partners.

The Vulnerable Twenty Group of Ministers of Finance

Washington, DC – 23 April 2017

Spring 2017 V20 High Level Events

V20 Ministers of Finance Activities at Washington, DC – 22-23 April 2017

The Vulnerable Twenty (V20) Group of Ministers of Finance will reconvene during the 2017 Spring Meetings of the International Monetary Fund and World Bank Group to advance the climate change finance agenda of economies systemically vulnerable to climate change. The V20 Group will progress its 2020 Action Plan following the Regional Consultation for the Asia-Pacific at the Asian Development Bank, Manila, Philippines and the meetings of its Focus Groups on Advocacy and Partnerships, Climate Accounting and Risk.

Key meetings

V20 Ministerial Dialogue IV: Sunday 23 April, 8:30am–10:30am, Board Room MC13-121, World Bank Main Complex
Statements and documents available here.

[VIEW FULL AGENDA]

V20 Deputies/Senior Officials Meeting: Saturday 22 April, 9:30am–11:00am, Board Room MC4-800, World Bank Main Complex
For more information, please contact: secretariat@V-20.org
Photo caption: V20 Ministerial Dialogue III, Oct 2016; Source: CVF/V20; License: CC BY-NC 2.0