WWF calls on Ministers of Finance to meaningfully engage in NDC enhancement processes with the objective of turning climate commitments into actionable investments and projects to be included in green recovery packages.
Attention: Co-Chairs, Coalition of Finance Ministers for Climate Action
Matti Vanhanen, Minister of Finance, Finland
Ignacio Briones Rojas, Ministro de Hacienda de Chile
Economic recovery measures must support and accelerate climate objectives
On the occasion of the Annual Meetings of the International Monetary Fund and the World Bank group this week, we would like to express our solidarity with all the people around the world being affected by the COVID-19 pandemic. We realize this is an unforeseen challenge and hope that it will be overcome in the best way possible, with the support of international cooperation.
The pandemic has shown us that the pathway to systemic change towards sustainable economies is not something for future discussions and decisions; it needs to be set in motion now. We hope that recovery measures will not only support and accelerate changes that do no harm to climate objectives, but also create new opportunities for people, climate and nature. Fiscal stimulus offers multiple opportunities for win-win-win investments in nature-based solutions, energy efficiency, clean energy and sustainable transport infrastructure. Multiple benefits can also be achieved by redirecting perverse subsidies (such as in agriculture and oil and gas) towards sustained job opportunities.
We believe that the enhancement of Nationally Determined Contributions (NDCs) and long term strategies) is a key opportunity to intertwine the agendas of green recovery and fighting climate change. It is our view that 2020 remains a key year for the climate regime and the achievements of the Paris Agreement goals, as countries are expected to submit new and enhanced NDCs and also long term strategies. The postponement of COP 26 to November 2021 should be seen as an opportunity to think about more ambitious climate pledges as well as to use the force of the financial system and the economic stimulus packages for boosting national climate action.
NDCs must be brought to the centre of the discussions of recovery packages, as there is vast common ground between the planning processes and lots to gain from an integrated approach: stimulus to the right sectors; building resilience of nature and people; improving quality of life; creating quality jobs, among others. The recovery from COVID-19 should also take advantage of frameworks that have already been established, such as cross--sectoral arrangements for NDCs planning and implementation.
A recent report by the Coalition of Finance Ministers for Climate Action has highlighted some recommendations for investments that can link climate commitments to recovery packages. Those include clean physical infrastructure such as in renewable energy assets and grid modernization; building efficiency investment in the form of renovations and retrofits; education and training in the skills of the future; research and development in clean technologies; rural support and investment in climate smart agriculture; and of great importance in light of COVID-19, natural capital investment to improve ecosystem resilience and restoration of degraded land and habitats.
Economic recovery packages should not dig further into regressive and harmful investments which will widen the public revenue gap in the future such as fossil fuels subsidies. Last year, the IMF updated their periodic research on fossil fuel subsidies, finding that globally, fossil fuel subsidies were roughly US$5.2 trillion - 6.5% of GDP - in 2017. That report also noted that efficient fossil fuel pricing in 2015 would have: lowered global carbon emissions by 28% and fossil fuel air pollution deaths by 46%, and increased government revenue by 3.8% of GDP.
We call on all Ministers of Finance to meaningfully engage in NDC enhancement processes with the objective of turning climate commitments into actionable investments and projects to be included in green recovery packages.
WWF International Global Lead Climate & Energy
Former Minister of Environment, Peru
President of COP20