Posted on October, 11 2023

The world continues to face the effects of various conflicts, such as the war in Ukraine, along with multiple related crises – for example in energy, food, and water insecurity and the cost of living. Climate impacts are hitting all parts of the globe, especially the most vulnerable countries and regions also least capable of dealing with the effects of the climate crisis. Bringing climate change and energy to the centre of the multilateral system has never been more challenging and more urgent than in 2023. 

We also know we will not be able to limit global warming to 1.5℃ without investments in a transformed energy system based on renewable energies and to protect and strengthen the natural carbon sinks in oceans, soils, and forests. This year we will see the political consolidation of the Paris Agreement - the first Global Stocktake will have its political phase at COP28, set to conclude that we are far off course. It is time for course correction with climate action on all fronts — ‘everything, everywhere, all at once’, including on finance, a key enabling condition for more ambition and implementation.

In WWF's Climate Policy Manifesto, WWF proposes three practical principles to guide multilateral finance institutions to deliver for climate action: 

• Do no harm: stop financing and subsidizing fossil fuels, and significantly scale up finance for renewable energy systems; make climate disclosure mechanisms mandatory and align finance with national implementation plans (such as NDCs and National Adaptation Plans).
• Do more good: Step up climate finance, deliver on existing pledges such as the UNFCCC US$100 billion and G7 pledges; use debt relief as a mechanism to free up fiscal resources that can be redirected to climate action and consider innovative approaches to benefit vulnerable countries, like the Bridgetown Initiative). Governments should channel resources and investments to climate innovation, research, and development.
• Influence for good: Mobilize private investment and unify decarbonization pathways to encourage private sector participation in global development priorities such as the Sustainable Development Goals and the Paris Agreement; adoption of a common climate scenario framework. 

The role of Finance Ministries and Treasuries becomes paramount in this context. Their work and commitment can “make or break” climate policies. We call on you to deliver on existing commitments and policies and work together towards a common end through cooperation and progress in the following areas:
 

• Delivering on the 2010 commitment by developed countries to mobilize $100 billion per year in climate finance by 2020 for climate action in developing countries to restore trust in the multilateral climate regime.. Due to multiple global crises, the goal was not fulfilled in 2020. It is imperative that it's fulfilled by this year and allows for closing the gap by 2025, to reach at least $600 billion in total within the 2020-2025 timeframe.​​
• There is a need to establish an ambitious new collective quantified goal, before 2025 and starting from the floor of $100 billion. It should be determined based on the needs of the developing countries and set up by COP29 in 2024.
• To achieve the Paris Agreement, we need to know whether the financial flows provided through national budgets are aligned with its goals. Assessment and subsequent greening of national budgets will be of immense importance. This should be facilitated by a green national procedure for budget adoption, including tagging green – and non-green – expenditures, as well as providing proper ex-ante assessments for new legislation.
• ​Eventually, all financial flows should be aligned with low-emission pathways, leading to the long term goal of stabilizing the temperature at 1.5°C. This might require cooperation with other ministries to pass proper legislation for private businesses to assess and report their financial flows - for example, through a dedicated taxonomy. This will need to be done hand in hand with a transition to a nature positive model too.
• ​COP27 began the discussion on creating a new Loss and Damage Financial Facility. Such a facility, properly financed, while taking into account the financial constraints of national budgets, will play a key role in the following years for the whole world. This should be finalized by COP28 and be a robust mechanism that will support developing countries fighting the effects of loss and damage, both in the short and long term.
• ​We will also need to fundamentally reform the entire system of Multilateral Development Banks, including the Bretton Woods System. The Special Drawing Rights release was a welcome first step, but it should be followed by creating a system, where affordable capital will be available to developing countries without creating or increasing indebtedness.