The World Bank must take a “quantum leap” to provide new finance to tackle the climate crisis or face “climate-driven economic catastrophe” that would bring all the world’s economies to a halt, the UN climate chief has said.
Simon Stiell warned that there were just two years left to draw up an international plan for the climate that would cut greenhouse gas emissions in line with the goal of limiting temperature rises to 1.5C above preindustrial levels.
“There’s no room now for half measures,” he warned, referring to the global heat that has surpassed records for the past 10 months. “Averting a climate-driven economic catastrophe is core business.”
But Stiell held out a promise of global economic renewal, for the developed and developing world, if countries shift to a low-carbon economy.
“Bold new national climate plans will be a jobs jackpot and economic springboard, to boost countries up that global ladder of living standards,” he said. “[They will] increase food security and lessen hunger. Cutting fossil fuel pollution will mean better health and huge savings, for governments and households alike.”
Governments will meet next week for the annual spring meetings of the World Bank, with its fellow taxpayer-funded development banks from around the world and the International Monetary Fund. These institutions will play a key role in determining whether developing countries gain access to the finance they need to cut emissions and adapt to the effect of the climate crisis.
“For many countries, they will only be able to implement strong new climate plans if we see a quantum leap in climate finance this year,” Stiell said.
He called for reform at the development banks that would enable the governments that fund them to provide much more climate finance to the developing world. This would involve greater pledges of overseas aid and debt relief for those labouring under the heaviest burdens, but most importantly changes to the banks’ lending practices that would give poor countries greater access to finance.
Leaders of developing countries, including Mia Mottley of Barbados and William Ruto of Kenya, have said such reforms could unlock hundreds of billions of dollars of finance. At present, lending practices are rooted in conservative estimates of developing countries’ economic capabilities and are not geared towards tackling the climate crisis.
“We can’t afford a talkfest [at the spring meetings] without clear steps forward, when there is an opportunity to make real progress on every part of the new climate finance deal all nations need,” Stiell told an audience of geopolitical experts at the Chatham House thinktank in London on Wednesday afternoon.
Ajay Banga, the new president of the World Bank, was installed last June after the resignation of the Donald Trump appointee David Malpass, after a series of gaffes that suggested he did not take the climate crisis seriously. Banga will be under pressure at the spring meetings, the core business of which takes place next week in Washington DC, to show that he is willing to address the climate crisis.
Stiell called for the World Bank and governments to “step up the pace” on climate finance, including by addressing new sources of funds. These could include a frequent flyer levy and taxes on the carbon emissions from shipping.
Stiell also warned of the impacts of the “global cancer of inequality”, which he said was worsening and was impeding efforts to make the deep cuts in emissions, and the investments in adapting to the impacts of extreme weather, that are necessary to avoid catastrophe.
“Business as usual will further entrench the gross inequalities between the world’s richest and poorest countries and communities that unchecked climate impacts are making much worse,” he said. “These inequalities are kryptonite for cooperative global climate action, and every economy, every country and its people pays the price of that.”
Stiell is executive secretary of the UN Framework Convention on Climate Change, the 1992 parent treaty to the 2015 Paris agreement. Under the Paris terms, countries have until early next year to present new national plans – called nationally determined contributions, or NDCs – to cut greenhouse gas emissions in line with the target of holding temperature rises to “well below 2C” above preindustrial levels, while “pursuing efforts” to limit them to 1.5C.
Current NDCs, most of which run to 2030, are inadequate to cut emissions to the extent needed. The UN is pinning its hopes on a revision of NDCs, to run beyond 2030, that would require much deeper cuts. At the Cop29 UN climate summit in Azerbaijan this November, countries are expected to set a new finance goal to enable the new rounds of NDCs due to be submitted next spring.
Many scientists believe that the 1.5C limit is already well beyond reach, pointing to the past 10 months of record temperatures on land and at sea.
However, the Paris agreement cannot be said to be breached based on the temperatures of one year alone, and many other scientists, heads of global institutions, political leaders and experts argue that the world must keep aiming for a 1.5C limit in order to galvanise action. The Intergovernmental Panel on Climate Change, the gold standard of global climate science, has found that 1.5C is still possible, though an overshoot of temperatures is likely and some form of removal of carbon dioxide from the atmosphere is also likely to be needed.
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