Following the announcement of a change in leadership at the World Bank, the Chair of the Vulnerable Twenty Group of Ministers of Finance (V20) asserts that global development needs an international financial system that is fit-for-purpose given the prevailing climate crisis; and urges that the next head of the World Bank puts climate amongst its top priorities.
Reacting to the resignation of the World Bank President, David Malpass, Minister for finance of Ghana and V20 Chair Ken Ofori-Atta, highlighted that “major reforms to the world’s international financial architecture are urgently needed to prevent the escalating climate crisis from overwhelming the global economy.”
He specifically called for change in the areas of debt; the shifting of financial flows to serve climate goals; and the need to mainstream climate risks in institutional surveillance.
He demurred at the continual inequities in keeping to the 1.5 degree Celsius safety limit of the Paris Agreement.
The G7, with 25 per cent of current emissions and the G20 members collectively, have taken the world on track for more than 3 degree Celsius of warming with its members’ NDCs having already fully exhausted its 1.5 degree Celsius carbon budget on a fair shares basis, while the V20 remain fully compliant on a fair shares basis.
A new World Bank leadership must be committed to positive climate action (i.e. achieving a fair and joint transition for vulnerable countries) as a top priority.
“We can only be committed to climate forward leaders. The continued failure of the international financial system to uphold the Paris Agreement has kept our economies and communities on the front lines of the climate crisis. The next World Bank President’s first test of leadership will be her or his ability to act on debt, jobs and climate change, without pitting them against each other,” said Ken Ofori-Atta, Chair of the V20 and the Minister for Finance, Republic of Ghana.
He also said, the V20 is determined to actively support and work with institutions such as the International Monetary Fund (IMF) and the World Bank by contributing its policy experience and insights in serving the 1.5 billion people across our 58 member economies.
He expressed their resolve in helping the new World Bank leadership to facilitate a comprehensive debt reform, jobs, digitalization, in ensuring climate smart financial flows, and in accelerating efforts to drive down the increasingly daunting cost-of-capital.
“We look to the new leadership to bring innovative approaches to unlock the needed transformation in the global financial system, as we all work towards building a climate resilient global economy,” he added.
V20 ministers will meet during the WB and IMF spring meetings in April 2023.
Currently chaired by Finance Minister Ken Ofori-Atta of the Republic of Ghana, V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change.
