climate-finance-stalls-at-world-bank-and-imf-meetings

The annual World Bank and IMF meetings have concluded without a concrete plan to mobilize the trillions of dollars needed to combat climate change.

Despite promises by developed nations to raise over $100 billion annually from 2020 onwards to support climate action in developing countries, progress has been sluggish.

A recent analysis revealed that financial flows into developing countries turned negative in 2023, exacerbating the challenges faced by these nations.

Discussions between G7 and G20 finance ministers, held on the sidelines of the spring meetings, touched on providing finance to developing countries for both climate and development objectives. However, concrete measures were not agreed upon.

The Vulnerable Group of Twenty Countries (V20) has called for increased concessional finance for climate-vulnerable nations and urged wealthier nations to uphold the 1.5 degrees Celsius limit.

Similarly, the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G24) has advocated for reforms to ensure timely assistance to vulnerable nations and urged reform of the G20 Common Framework to support countries in debt distress.

World Bank president Ajay Banga expressed hope that donor contributions could add up to an additional $100 billion to the poorest countries through its lending arm, the International Development Association (IDA).

The Bank has initiated efforts to add more financing to its portfolios to support low-income countries with very low-cost financing and grants.

While committing to ramp up climate-aligned finance, Banga stated that the Bank has no plans to halt investments in gas projects, raising concerns among environmental advocates.

IMF chief Kristalina Georgieva highlighted the growing debt burden on the global economy, with the poorest countries spending over 14 percent of their budgets on debt payments.

A new report by the Debt Relief for Green and Inclusive Recovery Project (DRGR) warned that 47 emerging and developing market economies may face default without adequate climate adaptation funding.

On the sidelines, discussions on international taxation for climate action took place, with the International Tax Task Force launching the first phase of its work to assist countries in fulfilling Paris Agreement commitments.

Proposals such as a wealth tax of at least 2 percent of billionaires' wealth annually gained traction, with endorsement from the IMF.