Finance and Investments for a Green Recovery

Over 400 viewers tuned in to the special virtual event on “Finance and Investments for a Sustainable Recovery” as part of the opening day of the June Momentum for Climate Change on 1 June 2020. Moderated by Mr. Amar Bhattacharya, Senior Fellow in Global Economy and Development at Brookings Institution, the event offered an opportunity to highlight actions government, public and private financial institutions can take to integrate climate considerations in response to the current health and economic crisis caused by the COVID-19 pandemic.

Mr. Selwin Hart, Special Adviser to the United Nations Secretary-General and Assistant Secretary-General for Climate Action, said: “The COVID-19 pandemic has not changed our objective – that is to accelerate the transition to a low-carbon and resilient world, which limits global temperature rise to 1.5 degrees Celsius. But what the pandemic has changed, is the way we will meet this objective.” He further said: “The six climate-related actions to shape the recovery set out by UN Secretary-General can help seize the opportunity and support countries in aligning their economic recovery packages with the Paris Agreement.”

Lord Nicolas Stern asserted: “To finance sustainable recovery, the whole of the financial system has to move. Development finance institutions have to be at center stage in scaling-up finance for rebuilding economies back better, given the scale of the debt crisis, particularly in developing countries and the limitations of national budgets.”

Adopting economic recovery measures that are consistent with low greenhouse gas emissions and climate-resilient development will not only help make the goals of the Paris Agreement a reality, it will also help build resilience to future shocks.

Senior officials and representatives of Ministries of Finance and Central Banks communities used the event to outline actions on sustainable recovery. 

Mr. Pekka Morén, Special Representative of Finance Minister, on behalf of H.E. Ms. Katri Kulmuni, Minister of Finance of Finland, exemplified efforts of the Coalition of Finance Ministers for Climate Action in supporting the development of long-term strategic plans, investment policies and financial incentives to create societal benefits and economic growth.

H.E. Ms. Pilar Garrido, Minister of National Planning and Economic Policy of Costa Rica stated: “While the COVID-19 pandemic causes devastating socio-economic impacts, it also provides an opportunity to anchor green recovery in long-term decarbonization strategies, including through accelerating investment in low-emission technologies, reducing inequalities and prioritizing green investments.”

H.E. Ms. Paola Alvarez, Assistant Secretary, Department of Finance of the Philippines, emphasized “While the rapid response to COVID-19 needs to address vulnerable groups that have been most effected by the crisis, in the longer term it is important to create sustainable economic recovery plans and strategies, introduce tax reforms to help enterprises recover, and create a framework for recovery of the rural economy by diversifying people’s livelihoods to provide high-impact revenues and high-impact multipliers.”

Mr. Frank Elderson, Chairman of the Network of Central Banks and Supervisors for Greening the Financial System, Member of the Governing Board of De Nederlandsche Bank and Member of the Supervisory Board of the European Central Bank, asserted that central banks and supervisors can use their leverage to emphasize the importance of financial risk management and to help financial firms develop forward-looking techniques for scenario planning, while aligning investments that are consistent with low greenhouse gas emissions and climate-resilient development.

Mr. Luiz A. Pereira da Silva, Deputy General Manager, Bank for International Settlements, stated that the current pandemic, climate crisis, and other extreme events require rethinking of the trade-offs between the efficiency and resilience of our socio-economic systems. He further pointed to the need for international coordination and fiscal and monetary policy coherence, consideration of human capital and societal impacts, and the potential benefits of some form of insurance against impacts caused by pandemics, climate change and other extreme events.

As the world combats the COVID-19 pandemic and its economic repercussions, climate action offers a compelling opportunity for governments and public and private financial institutions to focus on reinforcing their economies, realigning fiscal and financial policies, and taking the necessary actions to achieve long-term sustainable growth towards recovery.

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