Global finance leaders gathered in Paris for a summit aimed at addressing the debt crisis faced by poorer nations and addressing the pressing need for climate action, The Guardian reports.
While some progress was made, particularly regarding reforms and discussions on global taxes, the summit fell short of expectations regarding debt forgiveness. Poorer countries struggling with debt, driven by rising interest rates and a strong dollar, expressed disappointment that concrete measures to alleviate their situation were lacking.
The World Bank announced a temporary pause on debt repayments for countries facing climate disasters, but only for new loans. The UK extended this support to 12 countries in Africa and the Caribbean. Additionally, approximately $100bn through special drawing rights (SDRs) was pledged to help poorer nations.
France, Japan, and the UK committed varying proportions of their SDRs, totaling around $80bn. If a global shipping tax, estimated to raise $5bn annually, is implemented, some of the revenue could contribute to a loss and damage fund aimed at assisting countries affected by climate disasters.
The summit emphasized the need for a transformation in the approach to investment for poverty alleviation, overseas aid, and climate crisis mitigation. The finance required would be in the trillions, and it was agreed that the private sector, supported by public funding, would play a crucial role. Institutions like the World Bank were urged to reduce investment risks in developing countries, facilitating greater financial flows to those in need.
However, divisions between rich and poor nations remained, and uncertainties persisted regarding future policies, including potential global taxes on shipping, aviation, fossil fuels, and wealth. Youth campaigners, including Greta Thunberg and Vanessa Nakate, criticized the summit for its insufficient focus on addressing the root cause of the climate crisis: fossil fuels. They stressed the urgency of transitioning away from fossil fuels and the responsibility of wealthier nations to support this global shift.
Thunberg likened the situation to a burning house, urging immediate action to stop pouring oil and gas onto the flames. The summit's limited attention to fossil fuels disappointed campaigners who believe that addressing this issue is paramount to tackling the climate emergency effectively.
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