Jakarta – Finance Ministers from the V20 Group of climate vulnerable economies expressed concern that ongoing impacts of the Covid-19 pandemic will hinder opportunities to slow down global temperature rise, expressed during the UNFCCC COP26 in Glasgow last year, officials said Thursday in Washington, DC.
In a communiqué adopted by the V20, the group called for “inclusivity of decision-making processes and to include V20 in the G7, G20, and the IMF, and collaborative engagement with most vulnerable economies building on successful examples such as the InsuResilience Global Partnership.”
InsuResilience Global Partnership is an investment fund aimed to provide greater protection for people particularly susceptible to the impact of climate change and natural disasters.
The V20 held its Eighth Ministerial Dialogue in the World Bank headquarters on April 21, alongside the World Bank and IMF Spring Meetings.
The Group further expressed their concern of funding and liquidity to deal with the climate change induced crises, pointing out the unsupportive “global financial system, where many developing countries are forced into situations of fiscal distress or even default, not because of long-term insolvency, but due to a lack of cash on hand,” adding that this is where the international public finance community and key central banks can help with.
Fijian attorney general and the Minister for Economy, Civil Service and Communications Aiyaz Sayed-Khaiyum said that there is “a need to have a more nuanced approach to assessing debt sustainability that takes into account specific country characteristics and vulnerabilities. Debt sustainability can’t be measured solely with crude, simplistic tools of debt-GDP ratio.”
Amid the challenges in keeping 1.5ºC alive, the V20 saw new opportunities to build on the Glasgow COP26 UN climate summit decisions, including “mandating dialogue on international financing for loss and damage, and doubling adaptation finance”. The current surge in fossil fuel costs presents an opportunity to invest in renewable energy and storage.
Sayed-Khaiyum welcomed the V20’s push for “the IMF and World Bank to explore, propose well structured debts for nature swaps, with other changes so vulnerable countries can finance adaptation without endangering debt sustainability or market access.”
The V20 calls for “major emitters – the G20 and the G7 – need to further upgrade their near-term NDC emission targets for 2030 this year to ensure the survival warming threshold of 1.5ºC under the Paris Agreement is not exceeded in the coming decade.”
Formed in 2015, the V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change. The group welcomed seven new Ministers of Finance as members of the V20: Benin, Eswatini, Guinea, Guyana, Liberia, Nicaragua and Uganda and confirmed Ghana as the next president of the Climate Vulnerable Forum and future V20 Chair following the conclusion of the tenure of Bangladesh in 2022. (nsh)