Mia Mottley says conversations on climate finance for developing nations must move from commitments to action.
Prime Minister of Barbados Mia Mottley plans to convene actors from the private and public sector to create viable contractual frameworks for blended finance deals ahead of COP28 in Dubai.
Speaking at the Clinton Global Initiative 2023 meeting, on a panel with Noel Quinn, Group CEO of HSBC, and Ilan Goldfajn, President of the Inter-American Development Bank (IADB), Mottley said there was a risk that COP28 could result in “further commitments […] providing copy for journalists, rather than providing development for people”.
Earlier in the meeting, Neelam Chhiber, Co-Founding and Managing Trustee at India-based Industree Foundation, said estimates suggested that the capital required to meet net zero by 2050 would total US$150 trillion, with at least two-thirds of having to be allocated outside of North America and Europe.
“Our actions cannot be localised,” he said. “The home country bias that has traditionally characterised capital flows globally must be broken down.”
He added that at the G20 Summit in New Delhi this month, it was noted that between US$5.8 trillion and US$5.9 trillion was needed in the pre-2030 period for developing countries, particularly to implement their climate pledges or nationally determined contributions (NDCs).
“There is the need for US$4 trillion invested in energy technologies by 2030 to reach net zero emissions by 2050,” he continued, noting that the level of fossil fuel subsidies made in 2020 totalled US$5.9 trillion.
Mottley, who last year devised the Bridgetown Initiative, a political agenda for reform of the global financial and development finance architecture, complained that many finance initiatives designed to catalyse capital flows to the Global South weren’t “really innovative”.
She said short-term debt was not able to deal with small island states or middle-income countries that were on the verge of crisis and on the frontline.
“Loss and damage cannot be on the basis of loans, it has to be on the basis of grants, because we’re already taking out loans and higher indebtedness with respect to adaptation and resilience building,” she said.
When asked how to catalyse public-private partnerships, HSBC’s Quinn noted that different financing structures within blended finance initiatives was a key issue to address.
According to Quinn, leaders in the developed world must exert pressure over public sector finance and multilateral development banks to standardise contract templates that can be used to meet different needs. He added that this would include concessional finance, or soft loans, where necessary.
“At the moment [blended finance] is too slow because it’s all being done project by project, or item and item, and there isn’t a holistic, pre-negotiated template for different technologies or different deployment,” he said.
Mottley said she had been in talks with the UN to begin convening meetings with UK markets, financial institutions and credit rating agencies, but noted that such discussions should have happened sooner.
“We’ve taken too long to convene these meetings,” she said, adding that developing countries needed to be at the table.
“Unless we’re there, you’re not willing to give us something that is appropriate to our circumstances, and we’re tired of having a one-size-fits all prescription that does not bear any relationship to our reality.”
She offered an invitation to Quinn, that in the weeks up to COP28, she would put in place an “urgent team” to bring together member states in the Caribbean to meet with members from the development finance world and his banking colleagues, to come up with a contractual framework that would work for all parties.
“We think we can move the needle fast, because in our part of the world, if we don’t cooperate and have functional cooperation, we die,” she said. “We cannot go to COP with continued promises.””
Also at the event, Prime Minister of the Bahamas Philip Davis announced the Bahamas Sustainable Investment Programme, a blended finance platform seeking to raise US$500m applying the Triple B Framework designed by Resilience Capital Ventures.