V20: Climate Fight Essential to Global Recovery
Group of more than 40 economies systemically vulnerable to climate change advance efforts to pioneer financial innovation in responding to climate threats
Finance Ministers insist on a financial system compatible with the new 1.5°C Paris Agreement limit, calling for G7 and G20 to align development priorities with the goal
Swifter progress towards the $100 billion international climate finance commitment and increased concessional financing for climate action urged
Long-term vision to establish carbon pricing regimes adopted by expanded V20 Group
14 April 2016 – Washington, DC: The Vulnerable Twenty (V20) Group of Ministers of Finance today met to collectively address economic and financial responses to climate change as a rapidly growing threat to growth and prosperity. The V20 called for an economic and financial revolution compliant with the new 1.5 degrees Celsius and global adaptation goals as enshrined in the UN Paris Agreement reached in December 2015 that was strongly welcomed by the Group.
The V20 Chair, Cesar Purisima, Secretary of Finance of the Philippines, said: “Our group has now grown to 43 vulnerable, developing countries–simply no longer accepting putting economic growth, and even the lives and livelihoods of our populations at severe risk, amid the slow pace of progress in climate finance mobilization, especially from bigger and richer countries further along in development. We see the financial system as a weapon to fight climate change with tremendous potential. So we are working hard to be pioneers in concrete and innovative economic and fiscal responses to climate change. Our voice and effort has been strengthened here in Washington and we are going to keep pushing other economies, the G7 and the G20 to follow our lead. It’s a fight for our survival.”
“We welcome the new World Bank Climate Change Action Plan and are requesting additional concessional finance in the context of debt sustainability to help realize our ambitions and scale up our own contribution. We are encouraged by the progress we’ve made on climate accounting, risk pooling mechanisms, carbon pricing, and expanding financial access. We likewise expect developed countries to make good on their climate finance mobilization commitments,” added Secretary Purisima speaking at the V20 Ministerial Dialogue held in conjunction with the 2016 Spring Meetings of the International Monetary Fund and World Bank Group. The V20 gathering released a Ministerial Communique calling climate change “a weight on the global recovery” arguing that strengthened climate responses would “restore robust, sustained and balanced growth” while highlighting the “clear compatibility of economic and climate change policies.” The communique also urged the G7 and G20 to undertake urgent efforts to realign development strategies and emission commitments with the new international target of limiting the rise in global temperatures to not more than 1.5 degrees Celsius above pre-industrial levels.
The V20 ministerial recognized new members with the expanded Group now spanning 43 economies systemically vulnerable to climate change and representing a combined population of more than one billion. Speaking as an incoming V20 member, John Silk, Minister of Foreign Affairs of the Marshall Islands, said: “The Marshall Islands is honoured to join the V20. The world needs ambitious action by all countries if we are to decarbonise globally and keep the window open for the 1.5 degree limit needed by vulnerable countries like mine to survive. The V20 is devising solutions to ramp up action. We need climate finance flows to make clean energy available to all.”
The V20 body approved implementation plans to advance its effort to mobilize unprecedented levels of finance from all sources including pioneering innovation in climate finance and fiscal measures to support local actions to the limits of the capabilities of the Group’s members. Decisions included a vision to implement carbon pricing regimes within the decade and calls for a Financial Transaction Tax to meet the urgent finance mobilization needs of climate action. The body also moved to create a platform for collaboration with business acknowledging the significant role of the private sector for achieving transformational change. It additionally established three Focus Groups of V20 members to specifically address the embedding of climate change costs in public and private accounting, to increase advocacy to promote V20 priorities in the international financial system, and to further work towards the creation of a V20 Risk Pooling Mechanism.
The V20 was founded in October 2015 at Lima, Peru as a dedicated cooperation group of the Ministers of Finance of the Climate Vulnerable Forum (CVF), a sister-initiative. Currently chaired by the Philippines, the V20 originally consisted of 20 developing countries from Africa, Asia, the Caribbean, Latin America and the Pacific. The Washington, DC ministerial served to recognize the 23 new members that joined the CVF in 2015 as incoming members in the V20 initiative.
Photo caption: The V20 2nd Ministerial Dialogue at the 2016 Spring Meetings of the International Monetary Fund and the World Bank Group, Board Room, World Bank Main Complex, Washington DC (14 April 2016); Source: CVF/UNDP; Licence: CC
V20 High-Level Events at 2016 Spring Meetings of the IMF and World Bank Group
13-14 April 2016, Washington, DC
Following the 2nd V20 Working Group Meeting held last week, V20 delegates will convene in Washington DC for the 2nd V20 Preparatory Deputies/Senior Officials Meeting and the 2nd V20 Ministerial Dialogue on 13th and 14 April 2016 respectively. The meetings will affirm the V20’s commitment to the Paris Agreement, calling for a path towards the 1.5 degrees Celsius limit and greater financial protection for climate change impacts.
The Ministerial meeting of the V20 is considering a Work Plan and extending commitments to pioneer and deploy financial and fiscal solutions to climate change. The V20 Risk Pooling mechanism will be a focus of discussion, along with progress on the 2020 Action Plan to mobilise unprecedented investment from all sources beginning with national finance dialogues and building partnerships with private sector partners. A V20 Communiqué will be issued at the conclusion of the event.
The V20 2nd Ministerial Dialogue will also see confirmation of new CVF member countries as V20 members.
Participation in the 2nd Preparatory Deputies/Senior Officials Meeting and the 2ndMinisterial 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 2ndMinisterial Dialogue meeting. Admission to the V20 with Business reception is by invitation only.
2nd V20 Working Group Meeting
29-30 March 2016, Washington, DC
V20 delegates will meet at Washington DC on 29-30 March for the first time since the foundation of the V20 Group in October last year. This 2nd meeting of the V20 Working Group, hosted by the Department of Finance of the Philippines, aims to prepare and advance the full range of the V20’s work ahead of the 2nd V20 Ministerial Dialogue on 14 April 2016. Items for discussion include the V20 Action Plan and plans for the creation of a V20 Risk Pooling Mechanism. V20 delegates will also engage in a structured dialogue with key V20 stakeholders, including representatives of multi-lateral institutions, think tanks, the G20 Green Finance Study Group and leading private sector actors.
V20: Twenty Ministers of Finance agree on financial mechanisms to foster greater investment in climate resiliency
8 October 2015, Lima – Finance Ministers of the Vulnerable Twenty (V20), representing close to 700 million people threatened by climate change and spanning world regions, held their inaugural meeting on 8 October 2015 in Lima, Peru. They announced a series of actions to foster greater investment in climate resiliency and low emissions development at home and internationally.
In its first statement the group called the response to climate change a “foremost humanitarian priority”, with the V20 committing to act collectively to “foster a significant increase” of public and private finance for climate action from wide-ranging sources, including international, regional and domestic mobilization.
“In the absence of an effective global response, annual economic losses due to climate change are projected to exceed US$400 billion by 2030 for the V20, with impacts far surpassing our local or regional capabilities,” said Cesar Purisima, Finance Minister of the Philippines. “Here in Lima, we unite for what we believe is the fundamental human rights issue threatening our very own existence today. Global climate action gives us hope that we can still see a future free from the most devastating effects of climate change.”
Finance Ministers decided to develop and apply innovative fiscal measures. They voiced support for an international financial transaction tax to aid the mobilization of additional resources for the fight against climate change. They also called for improved access to international climate change finance for adaptation and mitigation action, the fulfillment of the $100 billion commitment to the Green Climate Fund, and acceleration towards a 50:50 balance in resources mobilized given prevailing shortfalls for initiatives to adapt to climate change.
“This is not a typical group of major economies. Instead we represent countries put at high risk by the economic failures to address climate change,” said Jose Francisco Pacheco, Vice Minister of Finance of Costa Rica, calling the event today in Lima “historic”. “We have decided to work together to ensure we are not made victims, but do everything we can to contribute to a resolution to this crisis.”
Dr. Atiur Rahman, Governor of the Bangladesh Bank, added: “We want to the world to know that we will not overlook the perils that our economies have been placed at due to the shortcomings, particularly of action by major economies. The world also needs to know that working together our vulnerable countries are doing everything in our power to bring the climate crisis under control, and we won’t relent until we’ve succeeded in our ambition.”
Additionally, Finance Ministers agreed to establish a sovereign V20 Climate Risk Pooling mechanism to distribute economic and financial risks, enabling participating economies to improve recovery from climate-induced extreme weather events and disasters and to ensure enhanced security for jobs, livelihoods, businesses and investors. Modeled on similar regional facilities, the trans-regional mechanism would increase access to dependable and cost-efficient insurance while incentivizing scaled-up adaptation measures.
Finally, V20 countries committed to develop or improve their financial accounting models and methodologies to enhance accounting of climate change costs, risks and response co-benefits in all their forms, while seeking a new international partnership to help realize the group’s aims.
“Financial constraints put up serious barriers for climate action and expose millions to disaster and hardship. We believe the V20’s vision to deploy innovation in finance, based on shared experiences, has great potential to knock down such barriers” said Helen Clark, UN Development Programme (UNDP) Administrator.
“The world needs stronger voices from developing countries to draw more attention to their great needs for investment in fighting the impacts from climate change,” said World Bank Group President Jim Yong Kim. “This new group of 20 countries, led by the Philippines, will play an important role in pushing for greater investment in climate resiliency and low carbon growth at home and internationally.”
The V20 was created to promote climate finance mobilization; to share and exchange best practices on economic and financial aspects of climate action; to develop and implement improved and innovative approaches; and to engage in advocacy and other joint actions.
A Working Group of the V20 commenced immediate follow-up to begin implementation of the first Action Plan, progress on which will be presented at the UN Climate Change Conference at Paris (COP21) later this year. The V20 statement said COP21 must deliver “an agreement entirely consistent with the non-negotiable survival of our kind,” while highlighting the significance of a strengthened below 1.5°C temperature goal.
Afghanistan, Bangladesh, Barbados, Bhutan, Costa Rica, Ethiopia, Ghana, Kenya, Kiribati, Madagascar, Maldives, Nepal, Philippines, Rwanda, Saint Lucia, Tanzania, Timor-Leste, Tuvalu, Vanuatu and Vietnam are part of the V20 and the associated Climate Vulnerable Forum (CVF) that mandated the group’s formation.