- The World Bank and International Monetary Fund (IMF) Annual Meetings (21st -25th October) will bring together Finance and Development Ministers and officials from around the world at a critical juncture for the global financial system.
- To tackle climate change and other crises, the global financial system must evolve further. The Annual Meetings are a chance to drive urgent changes in how the World Bank and IMF operate, shaping the size and capabilities of the key institutions needed to help meet urgent global challenges.
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The severe climate impacts witnessed in 2024 illustrate that the climate crisis is accelerating faster than current efforts to modernise the global financial system. Finance ministers must act swiftly to stay ahead of these challenges. This requires driving more money into the system, creating greater buy-in engagement, strengthening resilience to the climate impacts, and ensuring economies can invest more effectively for the future. Multilateral Development Banks (MDBs) and the IMF are critical in this needed transformation, partnering with countries and the private sector to catalyse action and get money flowing where it’s needed. Identifying new sources of finance for the climate transition and addressing sovereign debt distress are urgent priorities as we approach COP29, which will be dominated by negotiations on a new global climate finance goal.
The scale of financing needed to support the global climate transition requires an expanded role for MDBs. When combined with other efforts, MDBs are the most cost-effective way to support developing countries to mobilise climate finance. This is because by leveraging the funds contributed by their shareholders, MDBs can unlock significantly larger sums of financing. Reforms to evolve the MDB system, alongside recapitalization efforts, could allow for a tripling of MDB lending by 2030 – a major weapon in the battle against climate change. This would also form the bedrock of a high-ambition climate finance goal at COP29. A strong replenishment of IDA, the World Bank’s concessional lending arm which is the world’s biggest provider of finance for climate adaptation, is a critical first step. Many commentators are calling for a record-setting replenishment of $120bn, given increasing needs and wider cuts to aid budgets.
As well as increasing in size, the development system needs to show it is responding to the priorities of vulnerable countries rather than placing burdens on them. Country platforms underpinned by ambitious national transition plans will therefore be key to financing low carbon and climate-resilient development. The global development and financial system must align around this model so that there is a route for finance to get where it is needed.
Success will also require sustained political leadership. In the margins of next week’s meetings, G20 finance and climate ministers will meet to consider how to better mobilise investment for climate action. It will be critical that they send a clear signal of commitment to reform the international financial architecture so that it is fit for purpose for the challenges ahead, including increasing the size of MDBs as well as a range of macro-economic and support measures. With only a few weeks before the G20 Leaders meetings and COP29 climate talks in Baku, it is a critical moment for those in power to show their is both a will and a way to achieve climate safety for all.
Quotes
Rob Moore, Associate Director at E3G said:
“This is the last time those with the levers to mobilise climate and development finance will meet before setting a new global goal on climate finance in Baku. They need to take this opportunity to show climate vulnerable countries that there is both a will and a pathway for implementing the Paris Agreement and the sustainable development goals”
Danny Scull, Senior Policy Advisor, E3G said:
“One year ago, Ajay Banga promised a ‘Better bank,’ and he has largely delivered with new diagnostics, finance innovations, and emergency lending measures. Now on to phase two: A much, much ‘Bigger bank’.”
Laura Sabogal Reyes, Senior Policy Advisor at E3G said:
“This year, Country Platforms and National Transition Plans have been placed at the heart of driving finance to achieve global climate and development goals. From Brazil’s G20 Taskforce Clima to MDBs working better together, and with the upcoming 3.0 NDC round, the time is ripe for action. At the 2024 IMF and World Bank Annual Meetings and in the G20 Finance Ministers’ communique, there must be clear signals of a credible path forward for implementation. We have the principles and tools—now it’s time to move from designing to doing.”
Kate Levick (EN), E3G Associate Director, Co-Head of the Transition Plan Taskforce Secretariat (Macroeconomic issues (inc IMF), financial stability and financial regulation, resilience to climate-related risks, G20 finance)
m: +44 (0) 7860 861225 | [email protected]
Rob Moore (EN), E3G Associate Director, (MDBs/DFIs, financial architecture reform, climate finance geopolitics, G20 finance)
[email protected]
Danny Scull (EN), E3G Senior Policy Advisor, (Evolution Roadmap, World Bank Group, International financial architecture reform)
m: +1 (301) 787 0942 | [email protected]
Franklin Steves (EN, RU, SP, FR), E3G Senior Policy Advisor, (International financial architecture reform, Bridgetown Initiative, CAF reform, climate finance)
m: +44 7484 815434 | [email protected]
Laura Sabogal Reyes (EN, ES, DE), E3G Senior Policy Advisor, (Public development banks, Paris Alignment and E3G Public Bank Climate Tracker Matrix, climate finance, nature finance, innovative financial mechanisms, country platforms)
m: +49 160 96466368 | [email protected]
Erin Landy, E3G Policy Advisor, (MDBs, World Bank and Inter-American Development Bank)
m: +1 (518) 225-6850 | [email protected]
Marc Weissgerber (EN, DE) E3G Executive Director Germany and CEE (German media requests; International Financial Architecture reform, World Bank group, private capital mobilization)
m: +49 175 1974404 | marc.weissgerber@e3g.org
Clarence Edwards (EN), E3G Executive Director, Washington DC
[email protected]
Ronan Palmer, E3G Chief Economist (Economic press; macroeconomic issues, debt, IMF)
m: +353 89 491 7948 | [email protected]
Notes to Editors
- E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G
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