G20 summit must tackle climate change and financial inclusion
The Urgency of Climate Action
The upcoming G20 summit in India at the weekend needs a concrete plan for scaled-up green financing for the Global South as a crucial strategy to tackle climate change.
As we’re seeing, climate change isn’t a threat anymore. It’s a reality. Rising global temperatures, extreme weather events, melting ice caps, and sea-level rise are already impacting communities, ecosystems, and economies worldwide.
The Global South’s Disproportionate Burden
The Global South – comprised of developing nations with limited resources – bears an unequal burden in this climate crisis, even with a minimal contribution to greenhouse gas emissions.
The G20 leader needs to use this summit to devise a firm plan for scaled-up green financing to help the Global South fight the biggest issue of our time.
If not, this could have devastating consequences for our planet, as I was quoted by London Loves Business, Modern Diplomacy, Top Africa News, Enviro News Nigeria and Energy and Power, amongst other media.
Understanding Green Financing
So, what is green financing? It comprises a series of mechanisms. These are designed to support sustainable, environmentally friendly projects that mitigate climate change and boost resilience.
These include investments in renewable energy, energy efficiency, climate adaptation, sustainable agriculture, and conservation efforts.
Financial Challenges in the Global South
One of the principal challenges facing the Global South is access to financial resources required for climate action. Indeed, developing countries often don’t have the financial capacity to invest in green projects without incurring considerable debt.
The G20 summit must be pivotal in bridging this financial gap by prioritising green financing and devising mechanisms to make it more accessible.
The Role of G20 in Bridging the Gap
G20 countries are the largest economies in the world. They must commit to increasing their financial contributions to international climate finance mechanisms. This is crucial for supporting developing nations to mitigate emissions and adapt to the effects of climate change.
Moreover, the G20 summit should be a platform to boost collaboration between developed and developing countries. This can be via technology transfer, knowledge sharing and capacity building, amongst others.
Engaging the Private Sector
Engaging the private sector is vital. G20 nations can promote public-private partnerships and initiatives that appeal to private sector investment in green projects.
This can be done through guarantees, incentives or risk-sharing mechanisms that make investments in sustainability more attractive to businesses.
Innovation in financial instruments, such as climate insurance and green bonds, can open the door to alternative funding sources for climate projects in developing countries.
The G20 summit needs to, as a matter of urgency, encourage the development and adoption of such instruments to diversify funding options.
Indeed, this weekend presents a vital opportunity to prioritise green financing for the Global South as a key way to tackle climate change.
Tackling Financial Inclusion
The upcoming summit is also a golden opportunity to address financial inclusion and potentially lift hundreds of millions out of poverty.
As I said to Asia Times, International Investment, Financial Express, and United News of Bangladesh, amongst others, it’s astounding that in our ever more globalised world, a significant portion of the world’s population still has inadequate access to banking services or is underserved by them.
As it stands, 1.7 billion adults worldwide lack fundamental financial services, such as banking, credit, insurance, and savings facilities, with the majority living in low- and middle-income nations.
Boosting financial inclusion can be a massive help in the fight against poverty. With access to financial services, people can effectively save, invest, and safeguard themselves from unexpected economic shocks and financial setbacks.
This allows them to move away from the poverty cycle and improve their quality of life.
Financial inclusion is also an economic growth catalyst via encouraging entrepreneurship and nurturing small businesses.
Promoting Gender Equality
Another crucial focus on the upcoming G20 agenda is the global pursuit of gender equality. Financial inclusion can prove decisive in achieving this goal.
Women, particularly in developing countries, often come up against major obstacles when attempting to access financial services. By prioritising financial inclusion, we can strive towards closing the gender gap. Consequently, it promotes economic empowerment for women and other underserved groups.
The G20 leaders contribute to global economic stability and prosperity by acting on this critical issue.