At the just concluded World Bank Group and International Monetary Fund (IMF) meetings, Finance Ministers from more than 20 countries have launched a new coalition aimed at driving stronger collective action on climate change and its impacts.
The newly formed Coalition of Finance Ministers for Climate Action endorsed a set of six common principles, known as the, “Helsinki Principles,” that promotes national climate action, especially through fiscal policy and the use of public finance.
According to a statement on the World Bank website, the Helsinki Principles were conceived by a group of government represented at a meeting led by Finland and Chile in Helsinki in February. The statement noted that the principles were designed to support Finance Ministers to share best practices and experiences on macro, fiscal, and public financial management policies for low-carbon and climate-resilient growth.
The statement explained the coalition would help countries mobilise and align the finance needed to implement their national climate action plans; establish best practices such as climate budgeting and strategies for, green investment and procurement; and factor climate risks and vulnerabilities into members’ economic planning. The Chief Executive Officer, World Bank, Kristalina Georgieva, noted that finance ministries have a crucial role to play in accelerating the global shift to a low-carbon, climate-resilient growth model.
Georgieva explained that the coalition demonstrates new levels of ambition from decision makers in the fiscal policy arena and provides an important platform for Finance Ministers to share best practice on the jobs and growth benefits of the new climate economy.
In his remarks, the Minister of Finance, Chile, Felipe Larraín Bascuñán, noted that Climate change is a real threat nowadays but we can turn it into an opportunity.
Bascuñán added: “Beyond traditional tools like carbon pricing or the phasing out of fossil fuels we can stimulate and signal the private sector to invest in innovative solutions, incorporate this risk and externalities into the investment decision making process. Economic growth is essential but reducing emissions is also essential. We need more ambition and concrete commitments that translate into action.”
In another reaction, the Finland Minister of Finance, Finland, Petteri Orpo, noted that the Coalition would be successful, if it helps the world to plan concrete, effective policy measures to address the climate crisis nationally, regionally and globally.
Orpo added: “The Coalition must rely on analytical work and sharing of experiences to achieve solutions that work in practice.”
The France Minister of Finance, Bruno Le Maire, said: “I fully support the new Coalition of finance ministers for climate action. The role that finance can and must play in the transition to a low carbon economy is often underestimated.
“Many countries have already developed interesting initiatives at a national or regional level such as green bonds in France or the Emissions Trading System in the EU. Sharing experiences can only be useful. U.N. Secretary-General António Guterres gave President Macron a mandate to accelerate climate finance in the run-up to the Climate Summit in September. In this perspective, we are calling for collectively and urgently step up our actions to meet the Paris Agreement commitment.”