The world elite of development finance, climate, biodiversity and infrastructure is meeting in Paris around many heads of state and government in response to the questioning of Mia Mottley, Prime Minister of Barbados. While the discussions that will take place at the summit for a new global financial pact on June 22 and 23, 2023 promise to be of a very high level, their scope risks escaping the public. However, this summit aims for nothing less than a revolution that deserves our support.
First of all, it is necessary to identify the salient points which are the following:
– Evolve the model of multilateral development banks to meet the challenges of the 21st century, ending a system that has come to no longer serve vulnerable populations.
– Initiate a reform of the treatment of the debt of low-income and middle-income countries. Creditor countries must reconsider their debts when these have financed projects that are unfavorable to local development and unsustainable.
– Implement a new method, partnerships for green growth, to coordinate the various public, philanthropic and private actors, to meet the needs expressed by the countries. Recent experiences have shown that partnership approaches are all the more effective if they really take into account the beneficiary countries, which must be able to express their needs and coordinate the funding available on the basis of these.
– Develop innovative insurance instruments to be funded by the industries that are causing the losses and damages suffered, including the oil industry.
– Ensure reliable and comparable information and data. At a time of the ecological accounting battle between Europe and much of the world, an ambitious position of the data summit will be an indication of the real will to put sustainability at the heart of international financing.
– Create an environment conducive to the private sector, distinguishing however between sustainable infrastructure and SMEs when the two subjects are fundamentally linked. Adopting guarantees that might not be counted as debt by the IMF would accelerate the deployment of sustainable infrastructure with minimal fiscal and financial impact.
We must salute the ambition of the summit which, with courage, takes note of the failure of the policies carried out since the 1980s, both in terms of development and sustainability.
The summit will be a success if it allows, by producing concrete and measurable results locally, to quickly make the sustainable transition close to the populations. This will come down to two things:
– on the one hand, it will have to give communities their true place and allow them to invest massively in their sustainable infrastructures, given that local infrastructures are at the crossroads of economic and social development, climate and biodiversity. Moreover, communities are too largely ignored in these discussions. Yet they have the finest knowledge of needs and vulnerabilities, of practical solutions that concretely change the lives of the populations for whom they are responsible in the first place. It is also locally that the human, entrepreneurial and sometimes even financial resources are found which must be mobilized and supported. For example, the use of distributed renewables for subsistence products represents a $50 billion market in rural India alone. In sub-Saharan Africa, an $11 billion investment in solar equipment would provide refrigeration, irrigation and crop processing services in rural areas. These are crucial markets for communities and local authorities to develop their own transition pathways and co-create their path to sustainability.
– on the other hand, the summit will have to take the measure of the prodigious progress of digital technologies and put them at the service of communities. The extreme diversity of situations does not sit well with overly rigid frameworks. The number of sustainable local infrastructures to be deployed – several million projects per year all over the world – does not allow tailor-made solutions. Only advanced digital technologies make it possible to reconcile the two and effectively connect the most local of public services to the most global of financial instruments. Relevant data for the value chain can only be generated by tools deployed in the field at the service of actors.
All this leads to the realization that a new international financial system is inevitable, but that its real revolution must be local and digital in order to complete the linking of a reformed and strengthened international finance of private investors, on the one hand, and local initiative, on the other hand, on terms satisfactory to low-income and middle-income countries.
* Dr Arunabha Ghosh is Chief Executive of the Energy, Environment and Water Council, one of the world’s leading climate think tanks. The French presidency appointed him to the group of economists of the One Planet Lab. He is also Vice-Chair of the UN Committee for Development Policy and Advisor to India’s G20 Presidency;
– Sebastian Kind, is President of RELP (formerly Greenmap), former Undersecretary for Renewable Energy at the Ministry of Energy of Argentina, former Chairman of the Board of the International Renewable Energy Agency (IRENA);
– Wilfrid Lauriano do Rego is a member of the board of directors of Ecobank Cote d’Ivoire, chairman of the board of directors of Finafrica Senegal and in Brazil of the board of directors of Stoa, a subsidiary of CDC and AFD. He is former Chairman of the Supervisory Board of KPMG France and Coordinator of the Presidential Council for Africa;
– Jean-Pascal Pham-Ba is co-founder of Paradigm Partnerships, a law firm specializing in sustainability and innovation. He is a member of the scientific council of Europanova and former secretary general and spokesperson of the Terrawatt Initiative.
