On July 28, the Global South in the World Order network discussed Barbados’ 2022 Bridgetown Initiative for the Reform of the Global Financial Architecture. It is a proposition the island state’s Prime Minister Mia Mottley is actively advocating for on the global stage to unlock climate financing for Global South countries. Experts explored concrete pathways to alleviate these states’ debt burdens and discussed how critical support across the Global South is to advance the Bridgetown Initiative for the benefit of populations from smaller economies. They also debated the importance for Western states to engage with China to ensure cooperation and an efficient transformation of international financial institutions.
Climate financing challenges in the Global South
Verónica Gutman, Researcher at Buenos Aires University and Fundación Torcuato Di Tella, Argentina, @VerónicaGutman
The Global South is currently facing an unprecedented array of interconnected challenges: a cost of living crisis, a debt crisis, fiscal and financial challenges, political and institutional turmoil, and the urgent climate change crisis, which demands trillion-dollar investments in mitigation and adaptation.
There is an urgent need to mobilize climate finance for developing countries to foster their transition towards resilient, low-carbon economies. Developing countries must undertake mitigation efforts despite severe economic and social constraints, which the COVID pandemic, Russia’s war in Ukraine, and the increasing frequency of climate-related disasters have exacerbated. The needed financial resources must account both for losses and damages from climate events now and for adaptation necessities for the future.
However, the international climate financing architecture assesses nations using criteria typically applied to short-term financial investments, overlooking the essential long-term, low-carbon infrastructure investment challenges. The prevailing financial rationale primarily takes into account
the viewpoint and preferences of major international investors, overlooking the worldwide imperative to curtail greenhouse gas emissions (GHG) and the distinct imperatives of developing nations.
What is urgently needed to reshape the trajectory of GHG emissions in developing countries and help the planet confront the inevitable impacts of climate change is the immediate adoption of a disruptive approach to the criteria governing financial flows. In particular, available funds to developing states must triple, grants for losses and damages must become more accessible, and low-cost long-term concessional financing must be provided.
Furthermore, it is crucial to explore innovative financial instruments. Debt-for-climate swaps, for example, could alleviate developing countries’ debt burdens and release funds for addressing climate-related requirements. Sustainability-linked loans are another option since they could reward countries that meet their climate goals through interest rate reductions.
In brief, the financing needs of developing nations in addressing the challenges posed by climate change within the context of current economic and social crises are both urgent and complex. As these countries strive to achieve sustainable development while facing the effects of economic downturns and social unrest, the imperative to secure adequate financial resources for climate action becomes paramount.
Innovative financial mechanisms, collaborative partnerships, and the reprioritization of global agendas are essential in bridging the funding gap for climate adaptation and mitigation initiatives. By effectively mobilizing resources, facilitating debt relief, and promoting the equitable distribution of financial support, the international community can empower these countries to build resilience and mitigate environmental risks. Doing so can pave the way for a more sustainable and inclusive future despite the multifaceted challenges these countries face.
How the Bridgetown Initiative helps reimagine the world order
Brurce M. Mecca, Senior Analyst at Climateworks Centre, @Brurce
I have been working on climate change in Indonesia and Southeast Asia throughout my career, and being in this field has taught me how the Western conventional way of thinking has contributed to the unjust and unfriendly nature of international climate negotiations for the Global South. For example, it was not until recently, during the 2022 United Nations Climate Change Conference (COP27), that states parties to the United Nations Framework Convention on Climate Change (UNFCC) agreed to the establishment of a Loss and Damage Fund for nations most vulnerable to the climate crisis. This came 32 years after the small island state of Vanuatu introduced such an idea in 1991. The long delay reveals how Western powers, including the United States, are, for the most part, reluctant to be held liable for climate crises despite having been responsible for 92 percent of global greenhouse gas emissions.
Barbados Prime Minister Mia Mottley made another historic breakthrough during COP27, when she presented the 2022 Bridgetown Initiative for the Reform of the Global Financial Architecture. The Initiative proposes a systemic reform of global finances to better respond to climate crises. Indeed, Global South countries’ needs for climate financing will only increase in the coming years. In addition to unblocking financing flows for these nations, the international community also needs to ensure that it does not come at the expense of Global South countries’ efforts to improve the living standards of their populations. The Bridgetown Initiative urges the International Monetary Fund to increase available emergency liquidity, calls for multilateral development banks to add $1 trillion in lending instruments, and encourages private investments for climate resilience backed by multilateral institutions. In essence, the Initiative provides practical solutions to make sure that climate finance will always be available for developing countries that are impacted by major climate crises and are already burdened by high-interest debt repayment.
The core appeal of the Bridgetown Initiative lies in its pragmatic approach to ensuring that we transform the global financial system to unlock at least $35 trillion to meet the 2030 climate target of keeping global warming below 1.5 degrees Celsius. The Initiative came out of necessity and did not shy away from acknowledging that many of the existing climate solutions are simply not enough. It is relevant for all Global South countries—including Indonesia—that face challenges to accessing the financing critical for climate mitigation, adaptation, and resilience.
More broadly, the Bridgetown Initiative has helped me understand our global financial architecture. I can now reimagine what fair and balanced global climate governance could look like. As much as the world needs pragmatic solutions such as the Bridgetown Initiative to combat climate change, much work still needs to be done to reshape global climate governance—including how we delineate climate responsibilities and rights. If there is today greater consensus on Global South countries’ right to access climate financing, Western powers must also be held accountable for their historical emissions, which represent more than 90% of current greenhouse gases. In other words, Western powers’ responsibilities do not stop at providing access to finance for the Global South. The West also needs to strive to achieve negative emissions—deliberately removing greenhouse gases from the atmosphere before it is too late. Bhutan is currently one of the very few carbon-negative countries in the world. It absorbs roughly seven million tonnes of carbon dioxide annually and only produces around two million tonnes. While Bhutan’s context is obviously different from most Western countries, there is an opportunity for the latter to learn from this nation’s success.
The Case of Barbados in the Fight Against Climate Insecurity
Global South Experts Turn the Tables
By Aude Darnal Lead Author • Verónica Gutman • Brurce M. Mecca • Mir Mohiuddin
Grand Strategy
Every month, The Global South in the World Order Project convenes a meeting of experts from across the Global South to discuss international relations from their perspectives, disrupt conventional thinking, and inject non-Western viewpoints into prominent policy circles in Washington. This publication is part of the Global South Experts Turn the Tables series, which highlights insights from select participants from these discussions.
On July 28, the Global South in the World Order network discussed Barbados’ 2022 Bridgetown Initiative for the Reform of the Global Financial Architecture. It is a proposition the island state’s Prime Minister Mia Mottley is actively advocating for on the global stage to unlock climate financing for Global South countries. Experts explored concrete pathways to alleviate these states’ debt burdens and discussed how critical support across the Global South is to advance the Bridgetown Initiative for the benefit of populations from smaller economies. They also debated the importance for Western states to engage with China to ensure cooperation and an efficient transformation of international financial institutions.
Climate financing challenges in the Global South
Verónica Gutman, Researcher at Buenos Aires University and Fundación Torcuato Di Tella, Argentina, @VerónicaGutman
The Global South is currently facing an unprecedented array of interconnected challenges: a cost of living crisis, a debt crisis, fiscal and financial challenges, political and institutional turmoil, and the urgent climate change crisis, which demands trillion-dollar investments in mitigation and adaptation.
There is an urgent need to mobilize climate finance for developing countries to foster their transition towards resilient, low-carbon economies. Developing countries must undertake mitigation efforts despite severe economic and social constraints, which the COVID pandemic, Russia’s war in Ukraine, and the increasing frequency of climate-related disasters have exacerbated. The needed financial resources must account both for losses and damages from climate events now and for adaptation necessities for the future.
However, the international climate financing architecture assesses nations using criteria typically applied to short-term financial investments, overlooking the essential long-term, low-carbon infrastructure investment challenges. The prevailing financial rationale primarily takes into account
the viewpoint and preferences of major international investors, overlooking the worldwide imperative to curtail greenhouse gas emissions (GHG) and the distinct imperatives of developing nations.
What is urgently needed to reshape the trajectory of GHG emissions in developing countries and help the planet confront the inevitable impacts of climate change is the immediate adoption of a disruptive approach to the criteria governing financial flows. In particular, available funds to developing states must triple, grants for losses and damages must become more accessible, and low-cost long-term concessional financing must be provided.
Furthermore, it is crucial to explore innovative financial instruments. Debt-for-climate swaps, for example, could alleviate developing countries’ debt burdens and release funds for addressing climate-related requirements. Sustainability-linked loans are another option since they could reward countries that meet their climate goals through interest rate reductions.
In brief, the financing needs of developing nations in addressing the challenges posed by climate change within the context of current economic and social crises are both urgent and complex. As these countries strive to achieve sustainable development while facing the effects of economic downturns and social unrest, the imperative to secure adequate financial resources for climate action becomes paramount.
Innovative financial mechanisms, collaborative partnerships, and the reprioritization of global agendas are essential in bridging the funding gap for climate adaptation and mitigation initiatives. By effectively mobilizing resources, facilitating debt relief, and promoting the equitable distribution of financial support, the international community can empower these countries to build resilience and mitigate environmental risks. Doing so can pave the way for a more sustainable and inclusive future despite the multifaceted challenges these countries face.
How the Bridgetown Initiative helps reimagine the world order
Brurce M. Mecca, Senior Analyst at Climateworks Centre, @Brurce
I have been working on climate change in Indonesia and Southeast Asia throughout my career, and being in this field has taught me how the Western conventional way of thinking has contributed to the unjust and unfriendly nature of international climate negotiations for the Global South. For example, it was not until recently, during the 2022 United Nations Climate Change Conference (COP27), that states parties to the United Nations Framework Convention on Climate Change (UNFCC) agreed to the establishment of a Loss and Damage Fund for nations most vulnerable to the climate crisis. This came 32 years after the small island state of Vanuatu introduced such an idea in 1991. The long delay reveals how Western powers, including the United States, are, for the most part, reluctant to be held liable for climate crises despite having been responsible for 92 percent of global greenhouse gas emissions.
Barbados Prime Minister Mia Mottley made another historic breakthrough during COP27, when she presented the 2022 Bridgetown Initiative for the Reform of the Global Financial Architecture. The Initiative proposes a systemic reform of global finances to better respond to climate crises. Indeed, Global South countries’ needs for climate financing will only increase in the coming years. In addition to unblocking financing flows for these nations, the international community also needs to ensure that it does not come at the expense of Global South countries’ efforts to improve the living standards of their populations. The Bridgetown Initiative urges the International Monetary Fund to increase available emergency liquidity, calls for multilateral development banks to add $1 trillion in lending instruments, and encourages private investments for climate resilience backed by multilateral institutions. In essence, the Initiative provides practical solutions to make sure that climate finance will always be available for developing countries that are impacted by major climate crises and are already burdened by high-interest debt repayment.
The core appeal of the Bridgetown Initiative lies in its pragmatic approach to ensuring that we transform the global financial system to unlock at least $35 trillion to meet the 2030 climate target of keeping global warming below 1.5 degrees Celsius. The Initiative came out of necessity and did not shy away from acknowledging that many of the existing climate solutions are simply not enough. It is relevant for all Global South countries—including Indonesia—that face challenges to accessing the financing critical for climate mitigation, adaptation, and resilience.
More broadly, the Bridgetown Initiative has helped me understand our global financial architecture. I can now reimagine what fair and balanced global climate governance could look like. As much as the world needs pragmatic solutions such as the Bridgetown Initiative to combat climate change, much work still needs to be done to reshape global climate governance—including how we delineate climate responsibilities and rights. If there is today greater consensus on Global South countries’ right to access climate financing, Western powers must also be held accountable for their historical emissions, which represent more than 90% of current greenhouse gases. In other words, Western powers’ responsibilities do not stop at providing access to finance for the Global South. The West also needs to strive to achieve negative emissions—deliberately removing greenhouse gases from the atmosphere before it is too late. Bhutan is currently one of the very few carbon-negative countries in the world. It absorbs roughly seven million tonnes of carbon dioxide annually and only produces around two million tonnes. While Bhutan’s context is obviously different from most Western countries, there is an opportunity for the latter to learn from this nation’s success.
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