ADDIS ABABA, Ethiopia, July 14, 2015 (ENS) – To secure the financial resources for global climate action and for the post-2015 sustainable development agenda, more than 30 heads of state and government, 110 government ministers and over 1,000 business and civil society leaders gathered in Addis Ababa Monday for a four days of meetings.
The Third International Conference on Financing for Development, taking place in the Ethiopian capital from July 13 to 16, is aimed at finding the money to launch a renewed and strengthened partnership for human well-being and the health of the planet.
The main goals of the Addis Ababa conference are to secure the resources to finance the Sustainable Development Goals of the Post-2015 Development Agenda to be agreed in New York in September – as well as the universal, legally-binding climate pact to be defined at the United Nations Climate Change Conference in Paris, COP 21, in December.
Together, these three summits will define the course of international development and cooperation through 2030.
On Friday, ahead of the Addis Ababa conference, the world’s multilateral development banks and the International Monetary Fund signaled plans to extend more than US$400 billion in financing over the next three years to help mobilize the resources needed to achieve the Sustainable Development Goals.
The institutions: the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank and the World Bank Group, said in a joint statement that, “Investment needs in infrastructure alone reach up to $1.5 trillion a year in emerging and developing countries.”
Today, the Inter-American Development Bank announced that it has been approved as an accredited partner of the Green Climate Fund, which will enable it to become a channel through which the Fund will deploy resources for projects in Latin America and the Caribbean, LAC.
“As an entity accredited by the Green Climate Fund, the IDB is boosting even further its commitment to mobilize financial resources for adaptation and mitigation in the LAC region,” said Gloria Visconti, lead climate change specialist in the bank’s Infrastructure and Environment Department.
UN Secretary-General Ban Ki-moon told the opening session in Addis Ababa, “You have recognized that in a world in which both the global population and resource constraints are growing, development finance needs a reboot.”
“But without resources, commitments will amount to little more than promises on paper,” Ban warned.
He said the outcome document from the conference – to be known as the Addis Ababa Action Agenda – will be the starting point of a new path for financing sustainable development.
The draft outcome document, still under negotiation, presents an “ambitious financing framework” that includes commitments in at least six crucial areas, beginning with a new social compact for quality investment.
It includes a package for least developed countries, with a commitment to increase official development assistance, as well as a new Technology Facilitation Mechanism to help facilitate the development, transfer and adoption of technologies to accomplish sustainable development goals.
Ethiopian Prime Minister Hailemariam Desalegn, president of the conference, shrugged off the opinions of those who say the sustainable development agenda is too ambitious.
“Through a renewed global partnership, solidarity and collective action, we can and will mobilize the resources to achieve a prosperous and sustainable future for all,” said Desalegn.
Of the nearly 200 side events at the conference the UN Environment Programme is hosting a side event on sustainable finance and on science and technology, along with a roundtable on ensuring policy coherence and an enabling environment at all levels for sustainable development.
The panel on global finance will be led by UNEP’s Inquiry into the Design of a Sustainable Financial System and UNEP’s Finance Initiative.
Launched in 2014, the Inquiry explores ways to better align the $300+ trillion global financial system with its core purpose of delivering investment into the real economy, creating the conditions for sustainable development and a low-carbon transition.
Conducted in 15 countries so far, the Inquiry has found that developing nations are playing the leading role in this reshaping of the world’s financial systems, particularly those with major economies and rapidly developing financial and capital markets.
* – Brazil’s Central Bank has established environmental risk management requirements for banks.
* – The People’s Bank of China has established a green finance task force, co-convened with the UNEP Inquiry, and has collaborated with dozens of public agencies and market actors to develop 14 sets of proposals for enhancing green financing through policy, regulatory and market innovations.
* – Indonesia’s Financial Services Authority has delivered the world’s first 10-year roadmap for sustainable finance.
* – South Africa’s stock exchange has led globally in requiring listed companies to report on their sustainability performance and the country’s pension fund legislation has led the way in requiring pension fund trustees to take sustainability factors into account while making investment decisions
* – Kenya has the world’s highest penetration of bankless payment transactions, which has allowed it to achieve the most rapid increase of financial inclusion ever recorded, globally.
Christine Lagarde, managing director of the International Monetary Fund, said, “This year marks a once-in-a-generation opportunity for global development. The only way to seize it is through partnership. To go far, we must go together.”
The IMF, with its global membership and mandate to promote economic growth and stability, has just increased access to all concessional loan facilities by a full 50 percent.
The IMF is set to expand its program of support to developing countries in mobilizing domestic tax revenues; and Lagarde said the IMF “will deepen our policy engagement with countries on key development issues such as addressing infrastructure needs and promoting equity and inclusion.”
World Bank Group President Jim Yong Kim said an entirely new approach to financing is needed now.
“We must cast away the stereotypes of aid and think about development differently,” he said. “It’s about creating opportunity for all, giving people an equal chance to succeed in life, and preparing the world to deal with the challenges of climate change and the next pandemic.”
“We need trillions, not billions, of dollars to accomplish these goals,” said Kim, “and the money will come from many sources: developing countries, private sector investment, donors, and international financial institutions.”
“By working together, we can help people build better lives with good education, quality health care, clean water, and proper sanitation,” said Kim. “Those investments in people will help end extreme poverty in just 15 years.”