Inclusive approach: A green transition that leaves no one behind

We are working to deliver more for people and the planet. Multiple, overlapping shocks have strained countries’ ability to address hunger, poverty, and inequality; build resilience; and invest in their future. Debt vulnerabilities in low- and middle-income countries present a major hurdle to their economic recovery, and to their ability to make critical long-term investments. We are working to fight poverty and inequalities. An estimated 120 mn people have been pushed into extreme poverty in the last three years and we are still far from achieving our UN Sustainable Development Goals by 2030. We should thus place people at the center of our strategy to increase human welfare everywhere on the globe.

We want a system that better addresses development needs and vulnerabilities, now heightened by climate risks, which could further weaken countries’ ability to eliminate poverty and achieve inclusive economic growth. Climate change will generate more frequent disasters, and disproportionately affect the poorest, most vulnerable populations.

We want our system to deliver more for the planet. The transition to a “net-zero” world and the goals of the Paris agreement on climate change present an opportunity for this generation to unlock a new era of sustainable global economic growth. Just ecological transitions that leave no one behind can be a powerful force for alleviating poverty and supporting inclusive and sustainable development. This requires long-term investment everywhere to ensure that all countries are able to seize this opportunity. Inspired by the historic Kunming-Montreal Global Biodiversity Framework, we need new economic models which recognise the value of nature for humanity.

Poverty reduction and protection of the planet are converging objectives. We must prioritize an inclusive transition to ensure the poor and most vulnerable can fully reap the benefits of this opportunity, rather than disproportionally bearing the cost. Countries may need to pursue diverse transition paths in line with the 1.5° Celsius limit, depending on their national circumstances. There will be no transition if there is no solidarity, economic opportunity, or sustainable growth to finance it.

We, leaders of diverse economies from every corner of the world, are united in our determination to forge a new global consensus. We will use the Paris Summit for a New Global Financing Pact on June 22-23 as a decisive political moment to recover development gains lost in recent years and to accelerate progress toward the SDGs, including just transitions. We are clear on our strategy: development and climate commitments should be fulfilled. Grants and loans at preferential rates (often called “concessional money”) should be prioritised in the fight against poverty; and to strengthen health, education, and food security; and to address climate change and biodiversity loss. Next, long-term loans must be available to middle-income countries to bring forward sustainable investment in economic, social, and physical resilience. In line with the Addis Ababa Action Agenda, we need to leverage all sources of finance, including official development assistance, domestic resources, and private investment.

Delivering on that consensus should start with existing financial commitments. Collective climate finance targets must be met in 2023. Our total global ambition of $100 billion of voluntary contributions for countries most in need, through the rechanneling of special drawing rights or equivalent budget contributions, should also be reached.

No country should have to wait years for debt relief. We need greater and timely cooperation on debt, both for low- and middle-income countries. This starts with a swift conclusion of solutions for debt-distressed countries.

A priority is to continue ambitious reform of our system of multilateral development banks, building on the existing momentum. We are asking development banks to take responsible steps to do much more with existing resources and to increase financing capacity and private capital mobilization based on clear targets and strategies in terms of private finance contribution and domestic resource mobilization. These financial resources are essential, but this reform is about far more than money. It should deliver a more effective operational model, based on a country-led approach. We also need our development banks to work together as an ecosystem, closely with other public agencies and streamlined vertical funds, and, where appropriate, with philanthropists, sovereign wealth funds, private finance, and civil society to deliver the greatest impact. Once this is accomplished, we may consider capital increases where we could generate the most impact and strengthen the institutional capacity of each organization.

Technology, skills, sustainability, and public and private investment will be at the core of our partnerships to promote technology transfer and a free flow of scientific and technological talents, and to contribute to an inclusive, open, fair, and non-discriminatory economy. We will promote an agenda of sustainable and inclusive investment in developing and emerging economies, based on local economic value added and local transformation, such as fertilizer value chains. This comprehensive approach will require new metrics to update our accountability instruments.

Public finance will remain essential to achieving our goals. We should start with strengthening our instruments (the International Development Association, the IMF’s Poverty Reduction and Growth Trust and Resilience and Sustainability Trust, the International Fund for Agricultural Development, the Green Climate Fund, and other concessional windows of our banks, as well as the Global Shield against Climate Risks). Increasing resilience through a comprehensive suite of financial instruments is a priority. We need a stronger global safety net, based on pre-arranged approaches, to adapt to and mitigate the impacts of climate change, especially when disasters hit.

Our work together is about solidarity, collective action, to reduce the challenges facing developing countries and to fulfill our global agenda. We will continue to press for progress, leveraging other important events, including the G20 Summits in India and Brazil, the SDG Summit, and the COPs, starting with COP28 in the UAE this year. In all of our upcoming works and negotiations, we seek to advance concrete actions that deliver on the promise of the SDGs, for our prosperity, people, and planet.

This article was written by world leaders including Emmanuel Macron, Mia Mottley, Luiz Inacio Lula da Silva, Charles Michel, Olaf Scholz, Fumio Kishida, William Ruto, Macky Sall, Cyril Ramaphosa, Mohammed bin Zayed Al Nahyan, Rishi Sunak, and Joe Biden