COP28 – Rising With the Tide: Tracking Reforms in the International Financial Architecture for Accelerated Development-Positive Climate Action

CVF-V20 events at COP28  

Saturday, 2 December 2023

Rising With the Tide: Tracking Reforms in the International Financial Architecture for Accelerated Development-Positive Climate Action 

(High-Level event on the CVF-V20 – Global Stocktake on Climate Finance)

Theme: Finance and Advocacy

Venue: Ghana l CVF Pavilion, Blue Zone B6, Bldg 73

Time: 11:30 am – 1:30 pm

Draft Version 2.12.2023

Background

In 2009, 11 countries from Africa, Asia, the Caribbean, and the Pacific met in Maldives to form an international partnership of developing countries most threatened by the global climate emergency. The Climate Vulnerable Forum (CVF), as it was named, has since grown, and evolved as a platform to help members act together in response to the climate crisis. In October 2015, just two (2) months before the adoption of the Paris Agreement, the CVF launched a dedicated group of its Ministers of Finance, the V20 Finance Ministers, to translate political ambition into real economic outcomes.

The V20 Finance Ministers is a dedicated dialogue and action-oriented platform of Finance Ministers of the Climate Vulnerable Forum (CVF), which represents 68 economies systemically vulnerable to climate change. As of 2023, the V20 Finance Ministers represent 1.74 billion people and USD 3.8 trillion in gross domestic product.

Responding to the urgent need to translate the development-positive climate action agenda into real economy financing, investments, and outcomes, the V20 Finance Ministers was established on 08 October 2015 in Lima, Peru, during the 2015 Annual Meetings of the World Bank Group and the International Monetary Fund.

Over the last two decades (2000-2019), the V20 economies have lost 20% of wealth equivalent to USD 535 billion in aggregate dollar terms because of climate change impacts. Despite this, together, the group aims to promote Climate Prosperity with ambitious economic and financial resilience strategies that advance the Sustainable Development Goals, 30×30 Global Biodiversity, and the 1.5C safety threshold of the Paris Agreement. For climate vulnerable countries, merely surviving the climate crisis is not enough; the aim is to thrive in a rapidly warming climate.

Fit-for-Climate Financial Architecture 

At this critical juncture in the global fight against climate change, it is of paramount importance to track and assess the reforms in the international financial architecture to ensure accelerated global climate action. Building on the momentum from the beginning of the year – World Bank/IMF Spring Meetings, the Summit for a new Financing pact in Paris, the Africa Climate Summit and very recently the Annual Meetings of the World Bank and IMF in Marrakech – and guided by the V20’s Accra-to-Marrakech Agenda, the Bridgetown Initiative 2.0, the Nairobi Declaration, Emergency Coalition on Debt Sustainability and Climate Prosperity as well as recommendations in the Open Society Foundation’s Barometer on Debt, Development, and Climate, which recapped the major issues. This event seeks to provide a comprehensive stocktake on these reforms, evaluating progress, identifying barriers, and strategizing for the resolution of critical outstanding issues in 2024.

Climate Prosperity Plans

The Climate Prosperity program aims to enable sustained climate ambition by supporting the ability of member countries to achieve climate prosperity by increasing resilience and driving a clean energy-powered economy.  CPPs are pathway strategies linking national economic priorities to a climate-positive development agenda. CPPs enable countries to foresee and develop pathways to secure fiscal, economic, and social benefits, with concrete recommendations for overcoming financing hurdles through govt policy, international support and regulatory change. CPPs enable countries to formulate a strategic plan to reconcile challenges of capital cost, debt, privatisation, financial protection and fiscal strategy to unlock finance for climate action.

Climate Prosperity Plans (CPPs) are strategic investment frameworks to mobilise financing, especially through international economic cooperation and trade, for implementing clean energy and resilience projects. They will include an analysis of the benefits for job growth, economic growth, environmental and health benefits that would be realised if the projects in the plans are financed and implemented. They are structured as long-term strategies with medium term investment plans contained within them to enable investment this decade. CPPs are investment plans that allow for the reorientation of climate financing and leveraging of economic cooperation, sovereign resources, domestic capital, carbon financing, and more.

Under the CPP agenda an estimated $10 trillion investment inflow is needed in V20 countries to deliver on clean energy development goals by 2030. However, unsustainable debt burdens and a high cost of capital are currently slowing this effort. At COP28 the V20 will work towards a multi-stakeholder partnership, comprising V20 governments, MDBs, investment banks and sovereign wealth funds with a view to announcing a new strategy which would package de-risked clean energy, grid, storage, natural capital and critical minerals investment opportunities in multiple countries as newly structured assets. These assets, backed by MDBs and structured, underwritten and sold by an investment bank partner, would leverage significant capital flows and be tradeable on bond markets, as well as attracting carbon financing and exchange opportunities.

Operational Updates to the CVF-V20 Inter-Government Independent Institution

An independent Secretariat was established on April 2023 V20 Ministerial Communique X and the July 2023 CVF High-Level Communique. The September 2023 CVF Leaders’ Declaration confirmed that Ghana will host the independent Secretariat and received an expression of interest from Barbados to be the next Chair. The independent Secretariat assumes all the previous functions of the CVF and the V20 Finance Ministers inclusive of all the bodies operating thereunder. It provides technical expertise and all support services to fulfil the vision of the membership.

Further strengthening the institutional support basis, the V20 Finance Ministers are  advancing their Climate Prosperity Plans (CPPs) to transform the development trajectory of member states from climate vulnerability to one of climate prosperity. To leverage new financing to pursue CPPs, the October 2023 V20 Ministerial Communique XI called for comprehensive reforms to the international financial architecture to further support the most vulnerable economies. The V20 Finance Ministers stressed the need to urgently align it with climate science and climate policy through frameworks such as the Accra-to-Marrakech (A2M) Agenda which represents longer-term reform with immediate application, while advancing other critical reform solutions, including those identified in the New Global Financing Pact, Nairobi Declaration and Bridgetown Initiative.

Event Objectives 

The high-level event will serve the following objectives:

• Presentation of Climate Prosperity Plans including Ghana, Sri Lanka, Bangladesh
• Deliver mandate for new V20 $10 trillion investment bonds multi-stakeholder initiative 
• Operational Updates of the CVF-V20 inter-governmental institution and announcement of the incoming Chair, Barbados and appointment of Secretary General of the CVF-V20
• Stocktake of Financial Architecture Reform
• Comprehensive Assessment: Evaluate the steps taken and progress made in implementing financial reforms for fit for climate global financial architecture.
• Barrier Identification: Understand and analyse the challenges and obstacles hindering the progress of financial reforms and climate finance mobilisation.
• Strategic Planning: Develop a clear and collaborative strategy to overcome identified barriers and ensure the realisation of the set of outstanding objectives by 2024.
• Stakeholder Engagement: Foster a space for dialogue, partnership building, and knowledge exchange among finance ministers, international organisations, civil society, and experts in climate finance.

Expected Outcomes

The high-level objectives include:

1. Progress Report: A detailed assessment of the achievements, challenges, and gaps in the implementation of financial reforms for climate action.
2. Dubai Action Plan: A collaborative and action-oriented plan for addressing outstanding issues and accelerating climate finance mobilisation in 2024 and beyond.
3. Strengthened Partnerships: Enhanced cooperation and partnerships among V20 countries, international financial institutions, civil society, and other key stakeholders.
4. Knowledge Exchange: A rich repository of insights, best practices, and innovative solutions for climate finance reforms.

Format & Participation

Two hours high-level, on record event chaired by Dr. Eugene Owusu, Sherpa to the President of Ghana.

Participation in the meeting is open to the following delegations and representatives:

• Representatives from CVF-V20 Member States;
• Representatives from G7/G21 Member States;
• Intergovernmental Organisations;
• Independent High-Level Expert Group on Climate Finance (IHLEG);
• Non-Governmental Organisations and other relevant stakeholders;
• Task Force on Climate, Development and the IMF
• Philanthropies (Children’s Investment Family Fund, Open Society Foundations, Quadrature Climate Foundation, Rockefeller Foundation, Sequoia Climate Foundation)
• World Bank
• International Monetary Fund
• CVF-V20 Joint Multi-Donor Fund hosted in UNOPS

Detailed program

Key contacts

V20 Secretariat, [email protected]

RSVP

https://forms.gle/UBASwU1Ptk5RcyvJ9