Olaf Scholz and Rishi Sunak urged to support climate finance reform

The leaders of Britain and Germany have been challenged to throw their weight behind a shake-up of global finance to pay for climate action in developing countries. The call comes as Germany hosts the three-day Petersberg Climate Dialogue, a summit laying the groundwork for Cop28 in the UAE . The developing world is lobbying for funds to deal with climate-related disasters that are already unfolding. German diplomats expect the issue of “loss and damage” — compensation for countries hit by climate change — to feature in this week’s talks. Demands from poorer countries also include debt repayments being suspended when a climate disaster hits. French President Emmanuel Macron is expected to host a summit next month on getting more money to the global south. Germany’s Chancellor Olaf Scholz could use this week’s talks to build high-level support for the reform agenda, said Franklin Steves, a policy adviser at the think tank E3G and a former official at the European Bank for Reconstruction and Development. He said comments by Britain’s Development Minister Andrew Mitchell vowing to “transform international finance” were welcome. But there are doubts whether Prime Minister Rishi Sunak shares the enthusiasm of Mr Mitchell, who has often sparred with his own party’s front bench on development policy. Mr Sunak and Britain’s Chancellor of the Exchequer Jeremy Hunt are “in theory supportive” but have not been visible in championing financial reform, Mr Steves told The National . “It’s still uncertain whether Rishi Sunak will even attend the high-level political event in June,” he said. Mr Scholz’s moves are being closely watched as critics in Germany claim his government has not done enough to tackle climate change. Protesters from a group called The Last Generation brought traffic to a standstill for 10 straight days in Berlin this month. Mr Scholz as a former German finance minister “has shown that he can successfully put financial topics on the international agenda”, said David Ryfisch, head of the international climate politics team at the Germanwatch think tank. “It would be important for him to similarly set priorities at the Petersberg Climate Dialogue.” Mr Steves said the financial reform talks could play out at this month’s G7 summit in Japan and at meetings of the World Bank and International Monetary Fund in the run-up to Cop28, which begins in Dubai in November. The “central goal” of the talks in Berlin is to “strengthen trust in multilateral climate negotiations” and “facilitate the negotiations leading up to Cop28”, the German Foreign Ministry said. “Although many countries share the goal of reducing emissions and expanding renewable energies around the globe, these are not easy negotiations,” it said. “The countries around the table include severely affected island states such as the Marshall Islands, as well as the largest emitters of CO2 such as the United States, China and India.” Cop28 itself is not the place where reforms to financial institutions would be negotiated in detail but the summit could build further political support, Mr Steves said. He said some lenders had doubts about the reform agenda known as the Bridgetown initiative, after it was championed by Barbados’s Prime Minister Mia Mottley. The Bridgetown proposals include redirecting at least $100 billion of unused banking assets to help developing countries meet budget needs. Ms Mottley held talks in Barbados last week with UN Secretary General Antonio Guterres.

Olaf Scholz and Rishi Sunak urged to support climate finance reform

Germany hosts climate summit laying groundwork for Cop28 in UAE