The two-day summit held in Paris ended with some progress in favor of poor countries. The hoped-for big bang to reorient global finance in the service of the climate has yet to materialize.
Revolutionizing international finance, saving the planet, eradicating poverty, reconciling North and South… The summit for a new global financial pact ended on Friday, June 23, with the promise of the States and institutions gathered in Paris to carry out the reforms required by the piling up on our planet of climatic, economic and health crises.
>> Summit for a new financial pact: why is it necessary to talk about money to solve the climate crisis?
From the former headquarters of the Paris Stock Exchange, Emmanuel Macron and around forty Heads of State and Government took stock of these two days of discussions. But how to distinguish easy declarations of intent from concrete announcements? Franceinfo takes stock of this great rout, with inevitably disappointing results in the face of the immensity of the tasks.
Old aid promises recycled
The needs are enormous. According to the NGO Oxfam, low- and middle-income countries need $27 trillion by 2030 to meet climate and social spending needs. Faced with these amounts, the 100 billion dollars per year promised since COP15 in Copenhagen in 2009, and finally met for the first time this year, are not enough to claim victory. Similarly, the announcement of the reallocation by rich countries of the equivalent of 100 billion dollars of special drawing rights to the South is only the confirmation of a commitment made in 2021.
Many developing countries are represented, sometimes at the highest level“needed this summit to free up trillions of dollars”reacted the director general of Oxfam France, Cécile Duflot, in a press release. “What they got was a recycling of old broken promises and the prospect of new loans that will push the poorest nations into disastrous debt.”
However, bringing these old promises to Paris was necessary in order to “that the countries of the North renew the dialogue with the developing countries”explained to franceinfo Claire Eschalier, from the think-tank Institut de l’économie pour le climat. “A way, in a way, to get into the nails”after years of broken promises.
Little new money to tackle the climate crisis
Those who hoped that the summit would be an opportunity to take new levies – particularly on polluting activities – left disappointed. The possibility of international taxes on financial transactions, on plane tickets (as has been the case in France since 2008) and on maritime transport, has not come to fruition.
On the other hand, this last option now enjoys increasing political support. So much so that its promoters hope that this track will materialize at the summit of the International Maritime Organization, scheduled for early July. “We have a club of those who think like us and it is at the International Maritime Organization that the negotiation must be held and that we will hold its”, promised Emmanuel Macron, in reference to the small twenty countries likely to sign an agreement.
On these points, this Paris summit made it possible to put these discussions on the agenda of future high-level diplomatic meetings, such as the G7 and, above all, the G20.
The beginning of a reflection to reshape financial institutions
The President of the Republic welcomed Friday a “full consensus” For “in-depth reform” the global financial system. But while waiting for this revolution, the summit gave birth to a series of small steps. The World Bank, for example, has announced its intention to include in its agreements with the most vulnerable countries a new clause suspending debt payment in the event of a natural disaster. This measure, supported by Mia Mottley, the charismatic Prime Minister of Barbados, should allow countries hit by extreme weather events to temporarily pause debt repayment in order to deal with the emergency.
The new president of the World Bank, Ajay Banga, meanwhile expressed his intention to work for a cultural transformation of the institution. At a press conference, he said he was launching a reflection aimed at, “rather than measuring the volumes of financing, measuring the impacts of this financing on greenhouse gas emissions”. In concrete terms, this would amount to apprehending the projects financed with an overall vision and measurable objectives in the fight against global warming and development for the countries concerned.
Moreover, these countries have very clearly called for financial institutions to help States implement their own development strategies. Thus, for the South African President, Cyril Ramaphosa, the nations of the South are waiting “not only a reform of the international financial architecture, but also that they translate into practical projects concerning in particular infrastructures. It is on this condition that we Africans will be convinced that it is worth going to this kind of summit, going to Europe and listening to all these promises”, he warned.
Concrete announcements for Senegal and Zambia
To find concrete announcements from these two days of discussions, we must look to Senegal. The West African country has forged a “partnership for a fair energy transition” with a group of northern countries (including France) and multilateral development banks, with a view to achieving its objective of 40% renewable energies by 2030. These partnerships were born in November 2021 at COP26, at Glasgow, and have since enabled countries such as South Africa and Indonesia to move towards abandoning coal, the fossil fuel that emits the most greenhouse gases.
Finally, while several countries are facing the aggravation of their indebtedness in the face of multiple crises, Zambia’s creditor countries (notably China) have agreed to restructure 6.3 billion dollars of debt (i.e. approximately 5.8 billion euros), more than two years after the country defaulted.
“We now have a method”, welcomed the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, in an interview with AFP. “I look forward to codifying the case of Zambia and then using it as a model for others.” According to her, pSeveral lessons can be drawn from this textbook case.
Encouraging these restructurings is not enough, believes however Fati NOT’zi-Hassanedirector of Oxfam in Africa. “By ignoring obvious solutions like debt cancellation, and raising taxes on the wealthiest people and corporations, the countries of the North gathered at this summit have put the greed of the few ahead of the needs of the greater number”, she denounced.
The establishment of a monitoring mechanism
At the conclusion of a final round table on Friday, Emmanuel Macron announced the creation of a follow-up mechanism for the commitments and discussions launched in Paris. Asking the various actors present to sign, if they so wish, the list of commitments mentioned during these two days and of which “the scribe”, the French president gave them an appointment for a follow-up report “every six months”. Emmanuel Macron also wants to find the interlocutors present “in two years”, just before the COP25 scheduled in the Amazon, in order to see where the progress resulting from this “consensus.”
This hybrid summit model has imposed itself above all as a stage aimed at bringing together the actors of international negotiations in a more flexible framework than UN summits or G20 meetings, and therefore conducive to the emergence of solutions. to respond to these crises. The director ofInstitute for Sustainable Development and International RelationsSébastien Treyer, also noted that the countries of the South had seized this opportunity to multiply strong statements and coordinate their action with a view to future diplomatic meetings. “This summit did not lead to all the elements of transformation of the system hoped for, but it should make it possible to continue to pass the baton and maintain the pressure during the coming months,” he explains.
“I like the spirit of cooperation and partnership that I observed here”supported Kenyan President William Ruto from the podium. “I think that’s the right way to work.” If the financial system has not been overhauled from top to bottom, would the place given to developing countries in these discussions already constitute a form of revolution?