Opinion Editorial by H.E. Mr. Abraham Tekeste, Minister of Finance and Economic Cooperation of Ethiopia, for the Frankfurter Rundschau
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.
V20 Focus Groups to Convene in Marrakech
V20 Focus Group Meetings
What: The first meetings of the V20 Focus Groups on Climate Accounting, Advocacy and Partnerships, and Risk (Pooling) that were established in the 2nd V20 Ministerial Communique in April 2016.
When: Thursday 17 November 2016
Where: CVF Delegation Space, Blue Zone, UNFCCC COP22, Bab Ighli at Marrakech, Kingdom of Morocco
Ethiopia, V20 Chair
Costa Rica and Nepal, Climate Accounting Co-Leads
Bangladesh and Marshall Islands, Advocacy and Partnerships Co-Leads
Philippines and Barbados, Climate Risk Co-Leads (tbc)
Representatives from the World Resources Institute, Climate Analytics, HSBC, Swiss Re, BMUB, GEF, World Bank, IDF, Munich Re
Provisional Programme (pdf, 0.1mb)
V20 Calls for Clear Finance Roadmap to Excel in Climate Fight
The Vulnerable 20 (V20) Group of Finance Ministers of the Climate Vulnerable Forum (CVF) meet at the World Bank and IMF Fall meetings
Philippines hands over presidency as Ethiopia becomes V20 Chair
WASHINGTON D.C., 06 October 2016 – On the day after the Paris Agreement on climate change became law, finance ministers representing more than 40 emerging economies that form the Vulnerable Twenty (V20) Group met in Washington, DC to discuss how finance is key to driving the urgent action required at home. At the event, on the sideline of the Annual Meetings of the International Monetary Fund and World Bank Group, Ethiopia assumed the Chair of the V20 Group which was founded in 2015.
Carlos Dominguez, the Secretary of Finance of the Philippines called for a clear roadmap towards the mobilization of $100 billion in additional financing flows to help the most vulnerable countries deal protect themselves. He said V20 international cooperation would “provide our domestic economies with vital support and confidence we need to excel in fighting climate change”.
Abdulaziz Mohammed, the Minsiter of Finance and Economic Cooperation of Ethiopia, highlighted devastating effects and “lethal excesses caused by the world’s most gigantic externality”, adding that “we would like to express Ethiopia’s commitment for its candid leadership for the achievement of the V20 vision, and to work towards the fulfilment of the Paris climate agreement at large”.
Speaking at the V20 Ministerial, Helen Clark, UNDP Administrator, recognized the role of the vulnerable countries in the Paris Agreement through convincing the international community that a world where warming does not exceed 1.5 degrees was worth fighting for. She said “UNDP, and the entire UN development system, will work to support you in accomplishing your mission.”
Photo Caption: Philippines handover the V20 Presidency to Ethiopia; Source: The V20 Group of Finance Ministers; License: CC BY-NC 2.0
V20 High-Level Meeting at 2016 Annual Meetings of the World Bank Group and IMF
6 October 2016, Washington, DC
V20 Ministers of Finance will convene in Washington DC for the third V20 Ministerial Dialogue on 6 October 2016. The meeting will mark the transition of presidencies from the founding Chair, Philippines, to Ethiopia, who assumed the Chair of the Climate Vulnerable Forum (CVF) in August 2016. The event will present updates on key initiatives launched by the V20, including the Global Preparedness Partnership. It will also facilitate the sharing of presentations from members on national experiences of climate finance. The Dialogue is expected to conclude with presentations from the three V20 Focus Groups established in the 2nd V20 Ministerial Dialogue in April 2016, outlining next steps in the areas of Advocacy and Partnerships, Climate Accounting and Risk.
Participation in the 3rd V20 Ministerial Dialogue is by invitation only and subject to registration for the World Bank and IMF Spring Meetings. Accredited media will be invited to attend a segment of the meeting.
Philippines Energy Policy Review Sets Green Economy Shift: Purisima: Climate finance integral to a successful transformation
Manila, Philippines – Friday, 3 June, 2016 – Finance Secretary Cesar V. Purisima welcomed President Benigno S. Aquino III’s call for a sweeping review of Philippine energy policy, setting the path for a whole-of-nation approach away from carbon and towards green energy development.
As chair of the V20 Group, now expanded to 43 countries most systemically vulnerable to the consequences of climate change, Purisima has called for a rethinking of the global economy through V20 initiatives like climate accounting and carbon pricing.
“Apart from its human costs—which ought to be a convincing enough reason for decisive global action in and of itself—climate change is a dead weight to the global economy. Business as usual no longer presents a strong business case for anyone. Shifting to clean, renewable energy is the best investment we can make for our future.
To this end, the V20 Group is developing concrete ways to reorder incentive structures governing human behavior in the global economy. Changing how we value and price the costs of human (in)action to climate change ought to make a green energy shift the only sensible choice to make for everyone,” Purisima said.
Climate change-related disasters have claimed over 1.35 million lives in total and affected an average of 218 million annually over the past 2 decades. Developing countries bear more than half the economic impact of climate change over 80% of its health impact, with annual climate change-related economic costs of $44.9 billion projected to increase ten-fold by 2030.
According to the Global Partnership for Preparedness, a group recently launched by V20 and several UN agencies, the global economic impact of climate change since 2005 has breached $1.3 trillion.
Purisima earlier emphasized this in his keynote address at the Future of Asia Conference in Tokyo, where he cited studies showing how climate change has already held back global development by close to 1% of the world GDP. Purisima also referred to a paper published in the scientific journal Nature estimating that overall economic production would fall by about 23 percent by 2100 if the climate keeps changing under the current models. The study also projected that climate change would reduce average incomes in the poorest 40 percent of countries by 75 percent in 2100, while making 43% of the global population poorer in 2100 than today.
“While we in the V20 Group work with experts and multilaterals on risk pooling mechanisms as well as other mitigation and adaptation measures, it is important for developing economies to get efficient access to financial resources to adapt and shift towards a green economy.” Purisima has been vocal in leading the V20 in advocating for swifter progress towards the achievement of the joint $100 billion developed country commitment for support to developing countries via the Green Climate Fund.
“Transitioning towards a green economy requires a lot of money, we must admit. It costs even more for developing countries. But the cost of saving our planet can never be more than the cost of losing it. This is why we need global collaboration on climate finance to fund a more sustainable future,” Purisima added.
High-Level Leaders’ Roundtable: Natural Disasters & Climate Change: Managing Risks and Crises Differently
24 May 2016 (9:00 am to 11:00 am) Beyazit Hall, B-2 Floor, ICC, Istanbul, Turkey
Hon. Inia Seruiratu, Minister for Agriculture, Rural and Maritime Development and National Disaster Management, Fiji
Fiji is giving enthusiastic support to the Vulnerable 20’s Global Preparedness Partnership, given our recent experience dealing with a severe natural disaster in the form of Tropical Cyclone Winston.
We had been satisfied with our own preparedness and response to the previous event – Cyclone Evan at the end of 2012 – in which no Fijian lives were lost despite the widespread destruction it caused to homes and infrastructure. But we are the first to acknowledge that Cyclone Winston three months ago stretched our resources to breaking point. And while the effectiveness of Fiji’s overall response has been praised by our development partners, we realise that we need to do a lot better next time. And we need the support of the global community through this initiative to do so.
Winston’s crushing strength – a Category 5 event with winds of more than 300 kilometres an hour – made it the most powerful cyclone ever to make landfall in the southern hemisphere. Despite our best efforts, 44 Fijians were killed, 40,000 homes were damaged or destroyed, along with public buildings and infrastructure. And it has left us with a damage bill of 1.4 billion US dollars that will take many years to repair.
We were extremely fortunate to have our own relief effort reinforced so quickly and effectively by our friends in the region and the rest of the world. And especially the hundreds of military personnel from Australia, New Zealand, France and Tonga – backed up by warships and aircraft – who were able to assist Fijian relief workers cope with the vast challenge Winston presented.
We are extremely grateful to these nations and others – notably India, China, Korea and the UAE – that undertook airlifts of relief supplies or gave donations in cash or in kind. But the scale of this disaster has been a sobering lesson to us all of the inadequacy of our current preparedness and the acute need to upgrade our response to future events.
Fiji is now going to the world appealing for access to the finance we need to rebuild our homes and infrastructure to a much higher standard to withstand such events. And we are revaluating our disaster preparedness for a new era in which the scientists tell us that we can expect stronger and more frequent cyclones because of climate change.
Fiji urges the community of nations to embrace the V20’s Global Preparedness Partnership to provide the funding we need to prepare for future disasters. The world must set aside enough resources to deal with the new frightening new era that is dawning on small and vulnerable nations because of extreme weather events and rising sea levels. And I am here to testify that if any example is required of the urgent need to implement this initiative, Fiji’s experience with Winston is it.
High-Level Leaders’ Roundtable: Natural Disasters & Climate Change: Managing Risks and Crises Differently
24 May 2016 (9:00 am to 11:00 am) Beyazit Hall, B-2 Floor, ICC, Istanbul, Turkey
Hon. Roberto B. Tan, Treasurer of the Philippines, Department of Finance, Republic of the Philippines
Part 1: Country Statement
Mr. President, Excellencies, Honourable Colleagues and Partners, Ladies and Gentlemen, good morning!
This year, the rise in the global temperature marks the hottest ever recorded, prompting scientists to declare a climate emergency.
This climate phenomenon exposes humanity, particularly the most vulnerable, to increasing risks caused by weather-related extreme events and sea level rise.
To face the new normal, we acknowledge the need to further act to protect our people and our future.
Under Core Commitment 2, the Philippines is keen on working towards enhancing financial and social protection and further implementing our disaster risk financing and insurance strategy at various levels.
Using our budget, we will further prioritize investments on resiliency and adaptation, including building more resilient structures and using our natural systems. We will also improve the strategic use of our national and local funds on preparedness and prevention.
In sync with our public finance reforms, we will develop or strengthen policies to achieve better planning, including on procurement, and update our DRRM law.
We will continue to improve efforts in DRR such as the Pre-Disaster Risk Assessment (PDRA).
We will build on our experience in tracking our expenditures on climate action. Upholding good governance, the Philippines will continue to improve the accounting of disaster aid and enhance our coordination mechanisms to request and accept international assistance [through the guidelines for the Philippine International Humanitarian Assistance Center (PIHAC)].
Under Core Commitment 5, the Philippines will continue to participate in global platforms to develop common humanitarian civil-military coordination standards by taking a lead role in the UN Civil Military Cooperation.
The Philippines will uphold its commitment as a signatory to the ASEAN Agreement on Disaster Management and Emergency Response (AADMER) in coordinating humanitarian assistance in the region.
We will remain committed to support and actively engage in the Global Platform for Disaster Risk Reduction.
Part 2: Joint V20–CVF Statement at the World Humanitarian Summit
Mr. President, the Philippines chairs the Vulnerable Twenty Group of Finance Ministers (the V20) and its associated initiative, the Climate Vulnerable Forum, representing 1 billion people highly vulnerable to the effects of climate change.
We are highlighting at this Summit that dealing with climate change is now indispensable to dealing with humanitarian crises.
The landmark Paris Agreement and its goal of pursuing efforts to limit warming to 1.5 degrees Celsius must be fully implemented if we are to have hope of containing such escalating risks and their humanitarian repercussions.
Even limiting warming to 1.5 degrees, however, would still lead to approximately a doubling of effects. This is why climate finance flows to help communities adapt is as critical as funds for emission controls.
Achieving this balance by 2020 is not only a major humanitarian priority that will save lives. It also makes financial sense.
Consider that 56 billion dollars have been spent on humanitarian response by international donors in the 43 V20 countries between 1991 and 2010. This equates to 31.7% of total international humanitarian financing, which was $176.8 billion. However, in this same period only $13.5 billion was spent by the international community worldwide on Disaster Risk Reduction and preparedness. Where is the logic?
We are convinced that investing in preparedness is a no regret, cost effective investment for everyone. That is why the V20 is spearheading the launch of a major new initiative: the Global Preparedness Partnership. With the support of the international community, we can put a different, anticipatory and more cost-efficient formula into action.
We urge you to join forces in the Global Preparedness Partnership so that the most at-risk countries can achieve a minimum level of readiness to future shocks.
Part 3: Closing
Mr. President, we have put forward today what the Philippines is willing to invest in for the future of humanity. Our group of 43 countries resonates the call to action and will count on partners to work with us on tangible investments such as on preparedness.
Thank you, Mr. President.
New Global Partnership for Preparedness Launched: V20, UN and World Bank Collaboration to help countries get ready for future disasters
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