World Leaders, Private Sector Urged to Establish an International Green Bank to Win Climate Change Battle — Global Issues
NAIROBI, February 15 (IPS) – As the impacts of climate change escalate and natural disasters like earthquakes, floods and droughts become more frequent and severe, life-threatening and livelihoods, humanity is losing the climate battle.
Sharp declines in the species and numbers of both wildlife and species, severe food insecurity, high levels of malnutrition, and disappearance of streams, streams and rivers in some areas region, and rising sea levels threaten island nations that are alerting the world to a climate-driven disaster.
Yet even as the world is staring at unprecedented climate catastrophes, experts like Hafez Ghanem warn that current international organizations fail to finance and mitigate climate change. and is now calling for innovation efforts through the establishment of a Green Bank.
Ghanem, former World Bank Group Regional Vice President and currently a non-resident senior fellow in the Global Economic and Development Program at the Brookings Institution, Senior Fellow at the Center for Policy for the South New, and Distinguished Fellow at the Paris School of Economics tells IPS that “the establishment of the Green Bank as a new international organization to address climate change mitigation and adaptation efforts has long overdue.”
“People are looking for ways to finance investments in climate change. It is estimated that countries in the Global South alone need US$2 trillion per year to tackle climate change.”
Development assistance today is about $200 billion a year, he said, “so we need to multiply that 10 times and just use the funds for climate change and forget about the important social sectors.” as important as health and education.”
Choosing the climate agenda over important social sectors or vice versa is a win-win situation because they are both a matter of survival. This has led world leaders to an important turning point.
Ghanem said many developed countries are asking existing multilateral development banks, such as the World Bank, to reform and invest more in climate change to meet financing shortfalls. climate.
Ghanem says reforms in existing institutions will not work, and suggests a different approach: the creation of a single international institution that cares only about climate-related issues. An organization that will be a repository of global knowledge on climate change and advise governments on climate policy.
He said that a Green Bank would also develop green projects across the Southern Hemisphere and finance and implement them. As they are now established, the multilateral development banks have not yet opened up the space for the Global South to be heard on the same level as banks in the North.
At the World Bank, for instance, he said, voting power is so much that the G7 countries control 39.8% of the World Bank’s shares while other donors control another 14.9%.
“Although the World Bank conducts most of its business in Africa, the ten largest countries in Africa control only about 3.5% of the voting power. A development bank controlled by borrowers is not a good idea; Nor is a development bank where the beneficiaries feel they don’t have enough say,” he explains.
Ghanem further emphasized that the absence of the private sector would further limit the much-needed fundraising effort. “I believe the Green Bank should be a public-private partnership where private corporations, foundations and civil society organizations are invited to contribute capital alongside sovereign states. I am calling for a tripartite approach in which the countries of the Southern Hemisphere have the same voice, the same voting rights as the countries of the Northern Hemisphere, and the private sector.”
The need to attract much-needed capital from the private sector cannot be overemphasized today, he said, “the private sector has no say because the owners of the World Bank and The African Development Bank is all sovereign.”
Therefore, Green Bank will mainly support private green investments through equity contributions, loans and guarantees at the national, regional or global level. The new institution will also free up existing multilateral banks to channel scarce resources into social support and development.
This will significantly accelerate progress towards the delivery of vital social services such as health and education, especially in poorer, more vulnerable countries, such as classified as Least Developed Countries.
Therefore, the proposed Green Bank will not compete with or oppose existing multilateral banks but rather as a tool to collaborate with other institutions and complement their projects.
“Climate change is an external threat that all humanity must face and all humanity needs to unite to face it. But a large part of humanity and especially the Southern Hemisphere lacks the necessary resources,” he said.
“There are many international meetings and summits where resources are committed, but those commitments are far less than what is needed to deal with climate change. Furthermore, not all commitments come true as are actual commitments and disbursements.”
As governments in the Northern Hemisphere face tighter budget constraints and competing interests, limiting their ability to provide much-needed financing for climate projects in the Southern Hemisphere even if climate catastrophes on the rise, Ghanem said a new approach in the form of the Green Bank as a public, private partnership would be an important contributor to the solution. You can read his full policy summary on the subject This.
Report of the UN IPS Office
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