World economic leaders meet

Growth, climate change in focus

GMT 08:01 2015 Friday ,09 October

Arab Today, arab today Growth, climate change in focus

World Bank President Jim Yong Kim
Lima - Arab Today

The search for billions of dollars still needed to fight climate change topped the agenda Thursday as world economic leaders met seeking to kick-start growth while tackling global warming.

Two months away from a key UN conference in Paris to strike a comprehensive climate deal, finance ministers and central bank chiefs from 188 countries have put funding to fight global warming atop the agenda along with traditional economic issues as they meet in the Peruvian capital Lima this week.

Wealthy nations have pledged to come up with $100 billion a year by 2020 to help poorer nations fight the impacts of climate change, but a report released on the eve of the annual meetings of the International Monetary Fund and World Bank found the world was still $38 billion short of that target last year.

The issue has been a major sticking point in previous UN climate talks.

"If we want the Paris conference to be a success, the question of funding has to be nine-tenths settled, if not 100 percent," French Finance Minister Michel Sapin told journalists.

He called on development banks to do more, warning that governments have given nearly all they can.

The World Bank and other multilateral institutions "haven't done a lot," said Sapin.

World Bank chief Jim Yong Kim said his institution "stands ready to scale up its support" in the climate change fight, but did not give a figure.

The head of the Inter-American Development Bank (IDB), Alberto Moreno, said it could also step up.

"I'm not sure exactly how much we can take out of our pockets. Twenty-five percent of the IDB's loans are already designated for issues linked to climate change. But yes, we can do more," he said.

- China slowdown hits recovery -

Coming up with new cash is tricky with the world economy set to register its weakest growth this year since the global recession of 2009, according to a new IMF forecast.

The slowdown in China, which is on track for its lowest growth in 25 years next year, is having an impact worldwide.

After decades of break-neck expansion, the world's second-largest economy is losing its voracious appetite for fuel, metals and other commodities, sending prices slumping and hurting the fellow emerging markets that export them.

The pain is particularly acute in Latin America, which had not hosted the IMF annual meeting since the 1967 edition in Rio de Janeiro.

Kicking off the meetings, IMF chief Christine Lagarde sought to turn a page on the Fund's thorny relations with the region, where it has faced accusations of demanding budget-tightening from governments at the expense of programs for the poor.

"We're partners, we're not the drastic, horrible prescribers," she said.

But international charity Oxfam criticized her for not speaking out on inequality in the world's most unequal region, calling it "a missed opportunity."

Lagarde insisted the world economy was in recovery, despite its recent turbulence. But she warned that current growth was "just not enough to respond to the demand of 200 million unemployed" worldwide.

On the climate funding issue, Lagarde called for countries to impose taxes on carbon emissions to both slow climate change and help fund the fight against it.

Tapping new climate funding will also be on the agenda as finance ministers from the leading industrialized and emerging economies gather for a G20 meeting.

- V20 or G20? -

Twenty of the countries most vulnerable to climate change held the inaugural meeting of the "V20," a counterpoint to the G20 that will exert pressure for more climate financing and manage the funds.

"Climate change is not only an environmental issue, it is a fundamental economic issue and needs financial solutions," said UN climate chief Christiana Figueres at the group's launch.

The G20 will also discuss a new plan from the OECD to crack down on tax avoidance by multinational corporations that are estimated to stiff countries on more than $100 billion a year.

An entire neighborhood of Lima has been closed off with military checkpoints for the events, leaving the streets bizarrely empty in the normally traffic-jammed city and creating headaches for commuters.

Protesters have vowed to try to march on the meeting venue Friday.
Source: AFP

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