Did we get any money in Paris?

The Paris climate finance summit was a new point on Presidents’ calendars, hosted by President Macron of France on 22 and 23 June. Did anything good come out of it?

Well, yes it did. We saw more than one good thing, but they were all quite small and not many were new. 

My favourite was an agreement to pause national debt payments to the World Bank when a country is hit by a climate disaster - this is a good way to free up some government money in a crisis, it’s obviously fair, people have been calling for it for years and it will be great to have it at last. 

Many of the countries most at risk of storms, floods and droughts as the climate changes are also heavily indebted, like Pakistan which was nearly a third under water in their recent floods, and of course the disasters make it hard to pay. But this is a small step really and much less useful than actual debt cancellation.

The World Bank’s cousin, the International Monetary Fund, will try to find some more Special Drawing Rights for poor countries at most risk from the climate crisis; Special Drawing Rights are a kind of money the IMF creates for governments, and it’s a good idea to find some more for climate finance - though it won’t be on the same scale as they found for wealthier countries to help when Covid struck and may come to nothing anyway.

The last announcement was a €2.7 billion Just Energy Transition Partnership for Senegal (from the EU, France, Germany, the UK and Canada), to help Senegal switch to renewable energy; they hope it will be enough to get from 10% to 40% renewable power by 2030. This is good, though I wonder why Senegal is getting this special treatment.

The summit hoped that this year, rich countries will finally meet their target of transferring $100 billion of climate finance to poorer countries - it was meant to be every year from 2020-2025. They hope so, and we hope so too. But nobody announced anything new at this summit.

When the ship comes in

The summit gave a boost to the idea of a shipping levy has been around for a long time - put a small tax on international shipping so high emitting ships pay more and cleaner ones pay less, so there’s an incentive to clean up shipping and move away from fossil fuels, possibly to green hydrogen or ammonia for that can be produced with renewable electricity, or possibly batteries for shorter voyages and smaller ships. When ships travel within a country, the emissions from that journey are part of that nation’s emissions, but like flights, international voyages don’t get counted anywhere. 

Then use the money from the tax as a new source of climate finance. Set it low enough not to mess about with international trade, but high enough to encourage shipping to decarbonise. There’s a UN body called the International Maritime Organisation (IMO) that could run the scheme, but the bad news is they’re dominated by shipping companies not by governments and have always seen their job as protecting the shipping industry from having to do anything about climate change at all. So it was very good for the summit to agree that the IMO should get on with work on a shipping levy - they need this push, and they’ll need more.

Fuller speed ahead

It was also good to hear Vanessa Nakate send a clear message to the assembled leaders and some of them send great messages too, such as President Hichilema of Zambia.  The Bridgetown Agenda for how to adapt the global financial system and lever out the climate finance that people on the climate frontlines need to get some more momentum on the global stage. But only 39 world leaders showed up, so it was only a limited extra push.

Climate finance is urgent and vital for people hit by the climate crisis, it’s a matter of justice, and it’s also very important that rich countries finally keep these promises to build trust in the climate negotiations. 

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