The green energy transition needs a new kind of global finance

Wind turbines loom over a house in Arigna, Ireland. The world's need for a large-scale energy transition is crucial – and needs to be funded. Getty

Cop 28 in the UAE will be critical as we act against climate change. We fully support the efforts of the UAE presidency to make these international negotiations a success. Urgent action is needed – global warming is already having dramatic effects on societies, the environment, agriculture, water and health.

To tackle climate change, the international community is committed to drastically reducing its gas emissions. This implies the need for a very large-scale energy transition by reducing consumption and massively deploying green energies.

Funding this transition is crucial.

In this regard, the world’s postwar international financial architecture is no longer sufficient. The international community’s responses are fragmented and resources provided by development institutions are not delivering everything that they could. The tightening of finance conditions and a rise in debt are slowing investment in developing countries where needs are greatest.

Cop28, to be held later this year in the UAE, will be a pivotal moment for the international fight against climate change. EPA

We must together drive change in our global financial system to make it more responsive, just and inclusive. We must also fight inequalities, finance climate transition and biodiversity protection, and move closer to achieving the UN Sustainable Development Goals on the road to Cop 28 in the UAE. This is the objective of the Summit for a New Global Financing Pact, which will be held on Thursday and Friday in Paris.

This event, which intends to be inclusive, with it being possible for every opinion and every proposal to be expressed, is part of some positive momentum. This includes the launch of World Bank reform, India’s G20 presidency and that of Brazil right after, the SDG mid-term review, as well as commitments made at previous Cops. These are all reasons for hope. Tangible solutions have already been initiated: the Paris Club and the G20 have launched an initiative for debt treatment, and France plays a pivotal role in implementing co-ordinated solutions under the Common Framework.

We have proposed and obtained the issuance of $100 billion in International Monetary Fund Special Drawing Rights for the most vulnerable countries. This is an important step forward and all countries in a position to do so must take part in this effort.

But we must now go even further, following the example of the Bridgetown Initiative – a set of innovative solutions spearheaded by Barbados to address the climate vulnerability affecting many middle-income developing countries.

Funding this transition is crucial and, in this regard, the world’s postwar international financial architecture is no longer sufficient

We will promote a reform agenda for development banks and the IMF to provide more finance to those countries most in need as well as to meet global challenges. It is also necessary to mobilise private finance to redirect financial flows towards these nations.

To be more inclusive, we must finally give a greater voice to the most vulnerable countries in international forums.

The Paris Summit for a New Global Financing Pact highlights global finance challenges, and the many leaders taking part will give the impetus needed to carry out the transformations our system requires.

International solidarity has never been more critical to help the most exposed countries exit the Covid-19 crisis, deal with the consequences of Russian invasion of Ukraine on food and energy security, and cover the very high cost of climate transition. It is necessary to make a major change.

A number of G7 and G20 countries share this observation with France and wish to promote the same conviction: we have to act fast and join efforts to correct the imbalances and injustices generated by these divides.

We do not have to choose between fighting poverty, tackling climate change and its impact, and protecting biodiversity. A just transition is the only answer.