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French President Emmanuel Macron called on investors to provide a massive increase in financing to the poor countries facing the greatest threats from climate change as he opened a summit in Paris Thursday.
Macron is hosting world leaders including Brazil’s Luiz Inacio Lula da Silva and Cyril Ramaphosa of South Africa, as well as US Treasury Secretary Janet Yellen and the Chinese premier, Li Qiang, to discuss new ways to raise climate financing.
The talks aim to build momentum for an overhaul of the global lending architecture so that multilateral institutions like the World Bank can do more to help developing nations deal with climate change and raise private investment. Bloomberg Philanthropies is one of the summit’s official sponsors.
Key developments:
France, China pledge to expand trade ties with climate focus
Yellen sees urgency in boosting IMF poverty-fighting arsenal
Unlocking trillions for climate in a plan from a sinking island
Melinda French Gates says world debt woes need bold action now
Banga says World Bank to offer debt-repayment pause for crisis-hit countries (11:23 a.m.)
The newly appointed president of the World Bank said the development lender will allow countries hit by catastrophes to pause debt repayments.
The move is part of plans to significantly expand its toolkit to help nations prepare for and respond to crises, Ajay Banga said on a panel at the summit. This will also include providing new types of insurance for development projects and allowing countries to redirect a portion of their funds to tackle emergencies.
The World Bank will “offer a pause in debt repayments so countries can focus on what matters to their leaders when a crisis hits and stop worrying about the bill that’s going to come with that crisis,” he said.
Banga added: “We’re looking to embed catastrophe insurance in our lending products – with the intent to cover insurance premiums and interest through the generosity of others. This would ultimately give countries recovery resources without adding to their debt.”
Barbados’s leader says the global order is starting to change (10:34 a.m.)
Mia Mottley, prime minister of Barbados and co-host of the summit along with Macron, said that change is starting to happen as she described the extreme weather threatening her country. “We come to Paris with a heavy heart but hope,” Mottley said.
She has championed the Bridgetown Agenda, named after her island country’s capital, which proposes currency-exchange guarantees, disaster-linked debt relief clauses, and stretching multilateral development Bank reserves for much greater lending
It’s a “comprehensive and very ambitious” plan, she said, to rewire global capitalism to tackle climate change and enlist the support of multinational corporations.
“We do not ask for the bankruptcy of private companies,” she added. “But we do ask everybody to share the burden so that we can share the bounty.”
Macron appeals to private investors to step up (10:03 a.m.)
The French president called for a massive increase in private-sector funding both to fight poverty and address climate-change issues in developing countries in his speech opening the summit.
To facilitate that shift, he repeated his call for changes in the international financial architecture to remove part of the risk faced by financial institutions and to put in place guarantee mechanisms that would allow them to go into locations where they currently won’t.
“Without the private sector, sovereign funds and philanthropic institutions, we won’t meet this challenge,” Macron said.
Yellen says it’s critical to keep lines open to China (9:10 a.m.)
Treasury Secretary Janet Yellen said she and President Joe Biden both believe it’s critical to maintain communication to manage the US’s relationship with China and to “clear up misperceptions, miscalculations.”
“We need to work together where possible but we have disagreements and we are also forthright in recognising where we do have disagreements,” she said at a press conference in Paris. Yellen was asked whether she agreed with an off-the-cuff remark by Biden this week likening Xi Jinping to a “dictator.”
“I’m certainly pleased to see China participating in this summit,” she added. “I believe it’s important, as President Biden does, that the world’s two largest economies are united in working multilaterally and together in addressing global challenges.”
Le Maire says reform could raise ‘hundreds of billions’ (9:07 a.m.)
France will push delegates to consider the feasibility of new taxes on maritime transport, how to improve debt restructuring and bolster the firepower of international institutions, Finance Minister Bruno Le Maire said on RFI radio ahead of the summit.
The French minister said multilateral development banks could raise around $200 billion to tackle climate change in the coming months by leveraging their balance sheets and taking more risk. He also said countries “can and will” meet their pledge to recycle $100 billion of the International Monetary Fund’s Special Drawing Rights to fund lending to poor countries.
“All together we are looking at hundreds of billions of dollars,” Le Maire said.
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