Lord Nicholas Stern on India’s Leadership as part of G20 on world economy, emissions and climate finance

Lord Stern on how pivotal is climate finance from developed economies to developing ones today

First, climate change is already having an enormous impact on the development possibilities of emerging markets and developing economies (EMDEs) — and indeed, on all countries. We must recognize the magnitude of the threat now. We are already past the temperatures of the Holocene period which followed the last Ice Age and we’re moving to global temperatures which are impacting all countries — the poorest nations are being hit hardest. There is a great injustice to that as they contributed the least to greenhouse gas concentrations. So, this issue is immensely important for the entire world and particularly the developing world. Secondly, it is key to understand that the investments needed for sustainable new technologies and infrastructure, preserving biodiversity and making adaptations for greater resilience are actually real drivers of growth. This is because in large measure, they are lower-cost, focused on resource efficiency which adds to productivity and they will see heavily concentrated future innovation. Raising investment for clean technologies will deepen growth and sustainability. Climate finance is thus fundamental and it means, making climate investments. The numbers could be of the order of around 1 Trillion Dollars per year by 2030 into EMDE’s outside China.

On the developing world saying that the developed world owes it climate finance while developed nations point to high emissions from India and China, he shared his perspective on this debate

First, there is a collective responsibility — we all cause emissions and we all need to act to get to net zero by midcentury. We have a shared responsibility but some countries do have bigger responsibilities than others. Rich countries have a larger responsibility owing to the history of their emissions and their wealth which appeared mostly on the back of dirty growth. The majority of emissions is now in Asia. The future of rich countries also depends on lowering these for all these reasons, rich nations have a bigger responsibility, particularly in the area of finance. The trillion dollars a year needed in external climate finance could see about half coming from the private sector but a very large sum, upto $500 billion, would need to come from the public sector. Within that, Multi-lateral Development Banks (MDB’s) will play a large role these will be a very important route for the public part of those flows while helping the private sector manage risks. The climate for private investments also must be strong people won’t invest unless they can see the revenue possibilities and cost management with confidence. That depends on the host country creating a positive environment. The private sector, Multi-lateral Development Banks (MDB’s), concessional or zero-cost overseas development assistance (ODA), voluntary carbon markets, philanthropy, etc., will be key. ODAs will play a very important part as many countries will require concessional resources. These three markets will be critical to the world’s future

With respect to his recommendations to the G20 now to hasten agreeing on and delivering climate finance in time, he said

This next decade is absolutely decisive — a very large amount of the world’s infrastructure will be constructed. That has got to be clean. So, there is an urgency involved. On the G20, I think India’s leadership has been remarkable. I’ve seen many G20s and India’s G20 is very purposive, well-organised and comprehensive. The leadership of External Affairs Minister S. Jaishankar, Finance Minister Nirmala Sitharaman, Amitabh Kant and the PMO has been outstanding. The G20 flows onto Brazil and South Africa now and India, the biggest democratic emerging market, has set a very good direction of travel. This has also been a difficult time — the Russia Ukraine war has caused divisions. China and the US are having fractious relations. India can be a great convenor, getting people together, despite these fissures. I think the one area where the world will come together with shared enthusiasm is climate India making climate action and finance central is right. The G20 MDB group has come a long way and FM Nirmala Sitharaman should get credit for initiating that. I think it will play a critical part in the Summit. The Triple Agenda Paper outlines key recommendations these include ensuring MDBs have these global challenges as part of their mandate in addition to poverty and shared prosperity goals.The second aspect is a tripling of the overall flows I described. The third involves looking at different ways, like the global challenge funding mechanisms, which could play a part in the necessary expansion. On whether climate finance commitments should be made binding he opined that the enforcement mechanisms can’t come from external police force, but should come; from a mutual recognition of responsibilities, particularly of the richer nations but also all countries. Climate action is to the benefit of all countries through generating a clean new model of growth and inclusive sustainable development.

https://timesofindia.indiatimes.com/g20-is-the-biggest-part-of-the-world-economy-emissions-and-climate-finance-indias-leadership-of-it-is-remarkable/articleshow/103518417.cms