Monday

26th Feb 2024

'Key' Macron climate finance plan met with indifference

  • French president Emmanuel Macron, speaking in the Palais Brongniart - the Paris former stock exchange (Photo: New Global Financing Pact)
Listen to article

French president Emmanuel Macron's high-stakes climate financing summit hit a snag early on Thursday (22 June) when sharing the stage with Kenyan president William Ruto.

After years of broken climate financing promises by wealthy countries, leaders from the Global South came to Paris seeking tangible change and, above all, more money.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

In an effort to score an early win Macron — with great fanfare — announced the creation of a new Private Finance Lab led by the World Bank tasked with "better catalysing private investment" in developing countries,

Macron called on others to "commit" to making the lab a success in what he described as a "key announcement" of the summit.

Also on the stage were World Bank president Ajay Banga, and the managing director of the International Monetary Fund, Kristalina Georgieva.

But when given the microphone, Kenya's Ruto sounded less than enthusiastic. "Tokenism will not solve the problem," he told Macron. "If we continue talking this way, we will never solve this problem," he added.

According to the most recent UN estimates, the developing world will need €2.2 trillion annually to meet climate investment targets by 2030. At the same time, low-income countries have to raise €2.5 trillion in the next five years just to pay off creditors.

"We need a transformation of the financial system, not reform," Barbados prime minister Mia Amor Mottley told 50 heads of state and government who had gathered in the Palais Brongniart, the former stock exchange in Paris, in her opening speech.

She also said she privately described the proceedings in Paris as the "how dare you summit", referring to the risk Macron had taken inviting leaders from low-income countries to a palace in one of the world's financial centres to discuss debt and climate finance reform.

For his part, Ruto praised Macron's efforts to bring global leaders together but suggested attracting more private finance to invest in developing "public goods" such as hospitals, education and roads, which would not be enough.

"We need deep reform of our financial architecture where the power is not in the hands of a few people with institutes that are not subject to national politics," he said. "Let us agree to look for $500bn [€450bn] in fresh money."

One example of an idea of this scale floated by Mottley last year was to establish a $500bn [€458bn] trust for low-interest loans, paid for by rechanneling IMF's mostly unused reserve assets — the so-called Special Drawing Rights (SDRs).

The plan was hailed as a breakthrough at last year's climate summit in Egypt and was quickly embraced by Macron. But the plan has since become bogged down — over a technicality at the European Central Bank (ECB), and an unwilling US Congress, respectively.

This points to a familiar struggle. Although the World Bank and the IMF are owned by shareholders around the world, due to how the voting system works, both institutions are dominated by the US and the EU.

This makes the decision-making process vulnerable to domestic political dynamics in those countries.

Pointing to this fact, Ruto called for a new global "organisation of equals because now we don't have control over the outcome."

"I love your view," said Macron. "But let's reform the IMF and the World Bank. Let's not make a new one."

The final results of the summit will be announced on Friday.

Wealthy countries slammed for failing to address debt crisis

The World Bank is expected to find $200bn [€183bn] in extra financing for developing countries by taking on more risk — but critics said promises made did not represent "anything new" and failed to address global debt problems.

Kenya hosts first-ever Africa Climate Summit

Kenyan president William Ruto launched the inaugural Africa Climate Summit in Nairobi and showcased the continent's potential as a clean energy powerhouse. Africa contains 60 percent of the world's solar potential, massive geothermal capacity and CO2-absorbing tropical forests.

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

Opinion

After two years of war, time to hit Putin's LNG exports

Two years of tragedies, with well over 100,000 Russian war crimes now registered, underscore the urgent need to stop international LNG investments in Russia that continue to fund Vladimir Putin's war chest.

Opinion

Blackmailing the Global South on EU carbon border tax won't work

According to the European Commission, CBAM is supposed to prevent "carbon leakage". In other words, it seeks to prevent European industries relocating to jurisdictions with less stringent environmental policies, while also incentivising carbon pricing and industrial decarbonisation abroad.

Latest News

  1. EU rewards Tusk's Poland on rule of law with €137bn
  2. UK-EU relations defrosting ahead of near-certain Labour win
  3. EU paid Russia €420-per-capita for fossil fuels since war began
  4. After two years of war, time to hit Putin's LNG exports
  5. Creating the conditions for just peace in Ukraine
  6. Energy and minerals disputes overshadow new EU-ACP pact
  7. Germany speeds up Georgia and Morocco asylum returns
  8. How Amazon lobbyists could be banned from EU Parliament

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us