PRESS RELEASE: Paris summit fails to raise the bar on truly transforming global finance
23 June 2023
Paris, 23 June 2023: The Paris Summit on a New Global Financing Pact concluded today with little to show on the ambition to truly transform the global financial system to boost climate action and drive development. By steering closer to private finance sources and tweaking on the edges of existing multilateral development banks, the summit merely dressed the old in new packaging, such as by suggesting ‘debt pauses’ for poor countries hit by disasters rather than full debt cancellation. As climate impacts escalate, public finance remains critical to address issues such as adaptation and Loss and Damage which are ignored by private sector players.
While the summit made headway in sending strong political signals on taxing the shipping industry, to reform the global financial system and channel public funding towards addressing the most urgent polycrises of climate change, poverty and development, we need far-reaching actions to raise more money from taxing the super wealthy, taxing multinational corporations and making polluters pay.
We don’t need anymore summits to acknowledge a problem exists. We now need actual actions such as undoing outdated Bretton Woods systems and finalising agreements towards full debt cancellation for poor countries to make sure the money that exists reaches those who need it the most when they need it the most- without conditions and with no strings attached.
[Read the CAN Briefing on the Summit ]
Reactions from civil society groups
Harjeet Singh, Head of Global Political Strategy, Climate Action Network International:
“While the roadmap from the Paris Summit acknowledges the urgency for substantial financial resources to bolster climate action, it leans too heavily on private investments and ascribes an outsized role to multilateral development banks. In doing so, it overlooks the pivotal role that public finance must play in driving policy transformation, stimulating research and development, and investing in green infrastructure to mobilise trillions of dollars.”
“Private investments often neglect adaptation efforts in developing countries and are inadequate to address climate-induced loss and damage. Wealthier nations bear the responsibility of urgently funnelling significant public finance towards vulnerable countries. This is at the core of climate justice.”
Teresa Anderson, Global Climate Justice Lead, ActionAid International: “Climate finance is not only about making climate action fair, it’s about making climate action possible. The financial system needs to be totally transformed to help countries drowning in climate-induced debt, to stop fueling our planet’s destruction, and to put us on track to survive this crisis. Unfortunately, the Paris Summit has not provided the breakthrough needed to find the funding for our planet’s survival.”
“Powerful countries in the Global North have simply flexed to suit their own interests, once again. Rich countries are 3 years late in meeting the already-insufficient target of $100bn a year in climate finance. The outrage is that most of this money has come as loans which not only push climate-vulnerable countries deeper into debt, but perversely force them to expand fossil fuels and deforestation to cover the costs of debt repayment. It’s disappointing that while global leaders made nice noises about the need to unlock funds for climate action, they simply proposed more loans and temporary debt relief instead of providing real money or cancelling debts outright.
May Boeve, Executive Director, 350.org: “There has been some progress this week, although still far too limited for what is needed. It’s clear that the true winner this week was civil society, who rose up and made loud and clear their demand that polluters pay. The money needed for financing climate action exists.
The low hanging fruit available to rich government’s right now is a once in a generation opportunity to curtail excess money flowing to fossil fuel companies private bank accounts, and redirect it to communities around the world struggling with the climate and energy price crises. Politicians need to get behind voter sentiment and take this easy first step to tackle the climate and cost of living emergencies, and back the solar and wind energy global revolution that is taking place.”
Rebecca Byrnes, Deputy Director of the Fossil Fuel Non-Proliferation Treaty: “If governments are serious about reforming the current global financial system, they need to move to a truly radical transformation that prioritises a global just transition through new development pathways and tackling climate change at the source – that is, phasing out fossil fuels. The New Global Financing Pact Summit must shift the finance from the industries most responsible for our climate and inequality crises, and commit to mobilising the trillion of new, gran-based financing needed. A Fossil Fuel Non-Proliferation Treaty is the missing legal mechanism that can incentive and enforce the finance needed for a just transition away from destructive fossil fuel production.”
Sanjay Vashist, Director, Climate Action Network South Asia:
“There is an urgent need to increase the liabilities and financial contributions from the sectors most responsible. Every barrel of oil, tonne of coal, cubic litre of gas,and every dollar of profit extracted by fossil fuel companies should be taxed. The tax should take into account climate damages according to a global rate based on CO2e extraction but also the profits made by the company. Polluters must pay. This is climate justice.“
Chiara Martinelli, Director, Climate Action Network Europe:
“There are major opportunities to shape bold policy responses in 2023, to make polluters pay for loss and damage to vulnerable countries and communities in the Global South.
In weeks we expect the EU to support a GHG emissions levy on shipping at the IMO. A forthcoming EU financial transaction tax proposal should assign a portion of revenues to the loss and damage fund. The EU should also be coordinating on re-designing windfall taxes on profits into permanent taxes on fossil fuel companies. And to really align its carbon market with the Paris Agreement, EU member states should be dedicating a significant share of revenues from the re-vamped EU emissions trading system to international climate finance.
There’s a whole menu of options on the table: we expect the EU to lead rich countries onwards from the Summit on this agenda.” CAN Europe briefing on taxes and levies
Mariana Paoli, Global Advocacy Lead, Christian Aid:
“The exclusion of global south voices from this Paris summit is a big missed opportunity to challenge the policies that have led to the climate crisis”
“It is time we all learn that the world’s rich countries, largest polluters, creditors, tax dodgers and former colonial powers are not offering the solutions to the crises they have been key drivers of. We stand in solidarity with those pursuing truly inclusive economic and climate justice.”
Tracy Carty, Climate Politics Expert at Greenpeace International, said:
“The Summit ended with mild recognition of the need for new taxes to pay for climate action and identified a role for the G20 and at COP28 to take them forward. Taxing big polluters should be top of the agenda for these global moments, but rich country governments don’t have to wait to act – they already can and must introduce taxes on big polluters, above all the fossil fuel industry, to pay for loss and damage now.
“Silence on the fossil fuel industry paying for the mess they have caused was deafening at this Summit. Fossil fuel companies are racking up obscene profits, while millions in low-income countries pay the price as drought, floods, sea level rise and other climate catastrophes wreak havoc.”
Caroline Brouillette, Executive Director, Climate Action Network Canada:
“Leaders from the Global South have shown up to Paris with a multitude of ideas and solutions to the current converging climate and debt crises. But leaders from the Global North, who still control the rules of the unfair international financial architecture, have not shown much appetite for the most transformational proposals. In the coming weeks and months, we need rich countries like Canada to do more than just recognize the gaping finance hole.
“They must convincingly move towards implementing a maritime shipping emissions levy, a windfall tax on fossil profits, provide immediate debt relief, support MDB transformation and meet their Paris obligations to provide public funding that truly meets the world’s needs for mitigation, adaptation and loss and damage finance.”
Nimra Amjad Chohan, Co-founder, Climate Positive Investing Alliance and Pakistan Sustainability Network:
“Currently 70% of climate finance is in the form of loans. This is deeply unjust. Currently committed public finance and loans are not sufficient to transition the world to a clean, just, energy economy. Climate finance provided as loans further entrench most affected countries into debt, locking them into a downward spiral of economic distress and climate vulnerability – this is unfolding in Pakistan right now. We cannot talk about climate finance justice without talking about climate reparations. Innovation, partnerships and investment in real solutions needs to happen urgently.”
Rachel Cleetus, Policy Director, Climate and Energy Program, Union of Concerned Scientists:
“The Paris Summit, while acknowledging the significant gap in climate finance currently and announcing some new proposals, did not deliver the transformative breakthroughs that are desperately needed. It’s critical for world leaders to quickly build on the steps announced and unlock the scale of funding low- and middle-income countries require to address the climate crisis. The international financial system must undergo long-overdue deep reforms to be fit for purpose in a world where climate change is driving more people into poverty and more countries into unsustainable levels of debt.
Nations hit by extreme weather disasters need immediate debt relief and greater access to grants and concessional funding. The worsening and inequitable impacts of climate change—including mounting climate loss and damage—make the need for ramped-up climate finance even more urgent. Richer nations like the United States, which are responsible for a majority of global heat-trapping emissions to date, have a unique responsibility to contribute their fair share to sharp cuts in emissions and climate finance. Fossil fuel companies, whose products are directly responsible for climate change, must also be held accountable and pay for the harms they are causing.”
Walter Mawere, Advocacy and Communications Coordinator, CARE International in Somalia:
“It’s a disappointment. The summit did not go far enough to deliver for the people who bear the brunt of climate impacts. By 2030, more than 2 trillion dollars a year will be necessary to help Global South countries cope with climate change, for which they are not even responsible… But what did we get at this conference? Rich countries announced that they will eventually fulfill the 14-year old promise to unlock USD100 billion a year. But it is too little, too late. In Somalia, families suffer from the worst drought in 40 years and the harshest impacts of climate change every day. What can I tell them when I get home tomorrow? These international technical conferences must respond to this reality and hear our messages. Rich countries must stop dragging their feet. Vulnerable countries don’t need band-aids, but bold action. If money is lacking, let’s get it from the big polluters -the fossil fuel industry, the maritime and aviation sectors : there’s plenty to choose from! It is a pity that governments did not talk about ending public subsidies to fossil fuel companies. Governments can not pretend to defend the climate while at the same time continuing to fuel the climate emergency.”
Susann Scherbarth, Head of Climate Justice, Friends of the Earth Germany:
“Climate finance plays a pivotal role in mitigating the climate crisis and its devastating impacts on people and the planet. At the recent global finance summit in Paris, German Chancellor Olaf Scholz stressed the importance of shared responsibility in the fight against hunger and poverty as well as climate change. He also stressed the need for a just ecological transition.
Dear German government, let’s walk the talk and embrace your historical responsibility in the climate crisis by significantly scaling up climate finance commitments, turning unjust loans into grants, ensuring adequate funding for reparations, ending financial support for fossil fuels, and cancelling debts.”
Gaïa Febvre International Policy Coordinator Reseau Action Climat France:
“Rebuilding trust between the countries of the North and South won’t be achieved through another summit! We need to listen carefully to the views of the most vulnerable countries in the South. Then, we must have the political courage to propose debt cancellation for all the countries that need it, stop financing fossil fuels and take the money where it is, taxing the richest and fossil fuel companies. It’s our future and that of future generations that’s at stake!“
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For enquiries contact: Dharini Parthasarathy dparthasarathy@climatenetwork.org and media@climatenetwork.org