Leaders: Here’s why you must put climate finance at the forefront of COP26

Vladislav Kaim is a 25-year old economics graduate from Moldova. He is currently serving as the UN Secretary General’s Youth Advisor on Climate Change, focused on the issues of green jobs for youth, just transition and climate finance.

Here is his contribution to the Our World in Your Hands project.

Dear global leaders,

While you slash aid budgets and prop up the fossil fuel industry (in 2020 the G20 spent $345 billion on fossil fuel subsidies alone and coal support increased from $14.6bn in 2019 to 17.7bn in 2020) the world is dealing with the financial fallout of the pandemic and the increasingly more catastrophic impacts of the climate crisis.

But, as you know, some countries are faring far worse. Now, more than ever, the most affected countries and territories must be provided with far greater financial support.

Tell me, how do you expect these countries not to ‘default’ on their NDCs or weaken their climate ambition when they are not protected from a sovereign default because of vulture private creditors, the inflexible and unaccountable oligopoly of credit rating agencies, or opaque terms in deals with quasi-statal lenders?

The IMF recognized the need to act on this by agreeing to keep their debt suspension (DSSI) initiative in place until 2022 and urging their shareholders to establish a new trust fund where a share of proceeds from the $650bn new SDR (Special Drawing Rights) issuance would go to.

However, it is important for you to realize that those measures represent only a duct tape solution to a problem that affects the capacity of the most affected countries to fight against climate change.

It’s time that you, especially the biggest lenders, scaled up the working and IMF-endorsed practice of debt-for-nature and debt-for-climate swaps to help your debtors, in the time of their double need, have  more predictable climate and fiscal outlooks.

Without this, and having a strong climate component in the way the SDRs from the new trust fund are disbursed, Paris climate finance target will be further away and will lead to a further dereliction of duty and loss of diplomatic goodwill on behalf of the well-off countries.

You must put it into a binding text at COP26 that scaling up debt-for-climate mechanisms is imperative and use the immediately preceding occasions, such as IMF/World Bank Annual Meetings and the G20 Finance Ministers Meeting in Rome in October, to adopt best practices on implementation, governance standards and how it should be accounted for in the Paris climate finance target.

Climate change is more than a discount factor in the fiscal outlook for the countries who are heavily dependent both on nature and industries that suffered the most from COVID – it is one of the factors that puts in peril their very existence. The tepid action undertaken so far does little to prevent them from sliding into the climate abyss.

To the leaders of the developing countries, including my own, I would like to say: be bold! Show to the world your vision of how you want to transform your communities in order to survive AND thrive post-pandemic and amid continuous and exacerbated climate threats.

When the world will see the scale of your ambition, it will be much harder for those hesitant to not demonstrate their solidarity with you in  practice. You have many allies around the world in this endeavor, and climate advocates of my generation are certainly among them.

Vladislav Kaim