Saturday

1st Oct 2022

Barbados PM wants monetary firepower for global south

  • One of the people who listened to Mia Amor Mottley (r) speech was president Joe Biden (l) of the United States (Photo: Twitter)
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The prime minister of Barbados, Mia Amor Mottley, has called on world leaders to back a climate fund that would increase the special drawing rights of developing countries by $500bn annually [€432bn], circumventing climate finance pledges by rich nations, in a push for increased financial self-determination.

Although she garnered praise for the rest of her speech, less attention was paid to this proposal, which she presented at the United Nations Conference for Climate Change (COP26) on Monday.

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To cap global heating to 1.5 degrees Celsius and meet the aspirational goal of the 2015 Paris climate accord, greenhouse gas emissions need to be halved in the next eight years. Low-income countries do not have enough financial firepower to meet this challenge, Mottley told leaders, before proposing a solution.

"I say to you now. There is a sword that can cut through this Gordian Knot. And it has already been used," she said.

"The central banks of the wealthiest countries engaged in $25 trillion of quantitative easing in the last 13 years. Of that, $9 trillion was spent in the last 18 months to fight the pandemic. Had we used that $25 trillion to finance the energy transition we would now be reaching that 1.5 degrees limit that is so vital to us."

Wealthy countries should enable the International Monetary Fund (IMF) to give poorer countries access to the same monetary firepower the United States and Eurozone countries have been able to use for years to fight their crises.

The amount of $500bn should be put into a trust annually for 20 years, backed by member states of the IMF.

This would alleviate the climate financing gap that exists in the global south - "and if $500bn sounds big to you? Guess what: it is just two percent of the $25 trillion. This is the sword we need to wield."

However, this kind of monetary firepower is a long way from the climate aid wealthy countries are currently proposing.

In 2009 wealthy countries agreed to "mobilise" $100bn climate finance per year by 2020 - a target they have not met. Currently, close to $50bn has been pledged to developing countries.

A proportion of this money is private investor money, a sector which is less interested in risky investments in poor countries or countries that already suffer the consequences of climate change, such as Barbados.

"Investment in Pacific nations has actually gone down 25 percent since pledges were made," Mottley reminded US president Joe Biden and other world leaders in Scotland.

The speech laid bare the deep rift that developing countries and wealthy countries will need to close before coming to a new updated climate agreement at this year's summit, which formally opened on Sunday and will run to November 12.

While northern countries remain relatively immune to climate change effects, the threat of climate change to island nations like Barbados already is existential.

"For those who have eyes to see, for those who have ears to listen and for those who have a heart to feel, 1.5 is what we need to survive," Mottley said, adding that even two degrees heating "is a death sentence for the people of Antigua and Barbuda....Kenya and Mozambique, and yes, for the people of Samoa and Barbados."

"We do not want that dreaded death sentence and we have come here today to say: 'try harder'," Mottley said.

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