“The world has found it easy to make capital move, I don’t know how an inanimate object can have priority over a breathing person,” said Barbados Prime Minister Mia Amor Mottley at an event on reimagining the financial architecture of climate action, calling for humane immigration and just trade policies.
Effective climate action requires investments from both the private and public sectors, yet finance flows remain inadequate, prompting questions about how these flows have been structured to date. Convened by the Scottish Government and the University College London (UCL) Institute for Innovation and Public Purpose, this opening panel of the LGMA Multilevel Action Pavilionfocused on reimagining the financial architecture of climate action, with political and economic leaders calling for just trade policies. The event highlighted the power of equitable international financial structures in addressing global problems.
In her keynote remarks, Barbados Prime Minister Mia Amor Mottley emphasized that progress on climate change is constrained by policies that limit developing countries’ access to concessional funding, create disparities in the cost of capital, and restrict access to goods required to reach net zero. She called for a “just industrial transition” so developing countries can start building electric cars, photovoltaic batteries, and other goods that enable emission reductions.
On the issue of loss and damage, Mottley noted that developing countries face “double jeopardy,” as their “blood, sweat, and tears financed the industrial revolution” but now they face climate disaster. She underscored that refugees from climate-ravaged countries face “xenophobic, racist” immigration policies. She stated “the world has found it easy to make capital move. I don’t know how an inanimate object can have priority over a breathing person.”
During a panel discussion moderated by Mariana Mazzucato, University College London, Hala El-Said, Egyptian Minister of Planning and Economic Development, highlighted key pillars of Egypt’s fiscal approaches to climate resilience. She pointed to structural reforms focusing on infrastructure, agriculture, and information technologies, as well as new financial instruments that enhance the ability of the private sector to problem solve.
Ngozi Okonjo-Iweala, Director-General, World Trade Organization (WTO), underscored that “you can have all the finance in the world, and if the trade policies are not right you will not get anywhere.” Referring to the imminent release of the WTO Annual Report 2022 which centers on the importance of trade policies for solving problems, Okonjo-Iweala noted that COVID-19 vaccines had financing, but restrictive export policies blocked developing countries from accessing those vaccines.
Okonjo-Iweala said global supply chains are too concentrated and that “re-globalization” is needed to diversify manufacturing. Underscoring the “power of trade to help solve problems” such as climate change, Okonjo-Iweala said diversifying supply chains will also enhance inclusivity. “I sing the song of resilience, but resilience also means inclusion,” she concluded.
Nicola Sturgeon, First Minister of Scotland, opened her remarks by noting the panel shined a light on the “moral force” behind arguments to reform financial structures. She outlined three principles going forward: the responsibility of leaders to set the vision and create “mission-oriented institutions… getting finance for a purpose”; using public finance to “crowd in” private finance; and the obligation of private companies, “who will benefit hugely from the solutions,” to financially contribute to those solutions. She emphasized that “all of us want to capture the benefits of the transition for ourselves, but if we all do that we will not maximize the benefit overall.”
Mottley urged conversations around implementation that bring governments and non-state actors together, asking “who is calling the oil and gas companies to the table?” She said that if these companies “want to be able to sustain their profits, then the planet needs to survive.”
El-Said emphasized that environmental challenges facing developing countries need to be “tackled in an integrated approach” that aligns development agendas and efforts to eradicate poverty. “We need just and fair finance, and to realize that’s a win-win situation for developed and developing countries,” she stressed.
ICLEI, focal point of the LGMA Constituency, is convening the Multilevel Action Pavilion with more than 40 other partners during COP 27. The Pavilion’s agenda features sessions highlighting how local and regional entities around the globe can achieve effective action at multiple levels of governance.
The Scottish Government and University College London Institute for Innovation and Public Purpose, in collaboration with ICLEI – Local Governments for Sustainability
Yunus Arikan, ICLEI | email [email protected]
Jessamyn Briers, the Scottish Government | [email protected]
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All ENB photos are free to use with attribution. For photos from this side event, please use: Photo by IISD/ENB | Angeles Estrada.