BAKU, Azerbaijan, October 17. Multilateral Development Banks (MDBs) and global financial institutions hold a critical role in accelerating the transition to a green economy, said Simon Stiell, Executive Secretary of UN Climate Change, as he addressed the participants of a virtual event hosted by the Brookings Institution ahead of COP29, Trend reports.
"International climate finance must grow up, step up, and scale up to meet this moment," Stiell said.
He highlighted the upcoming World Bank Annual Meetings, which he sees as a pivotal moment for advancing climate finance. "The World Bank and IMF are at the heart of this transition. Just this week, the World Bank announced more concessional lending for climate, and the IMF is incorporating climate action and risks across their work," he noted. While acknowledging this progress, Stiell warned that incremental changes will not be enough to trigger the exponential surge of green investments needed to protect the global economy.
"The need for speed in climate finance is undeniable," Stiell stressed. "Without much larger-scale funding, all economies will face significant challenges. Many countries are already struggling with crippling debt, making it nearly impossible to invest in climate action".
As the world’s financial leaders convene, Stiell urged further steps to ensure that developing nations, often the most vulnerable to climate impacts, are given the resources and fiscal flexibility necessary to invest in climate resilience. "At the Annuals, we must see clear signals that the World Bank and IMF are committed to ensuring developing countries have the funds and fiscal space for climate action, not devastating debt burdens and soaring capital costs," he stated.
Debt relief, alongside the introduction of climate-related debt clauses and replenishing the World Bank’s International Development Association (IDA), were suggested as immediate measures. Stiell also called on G20 countries, which are the largest shareholders in these institutions, to fully fund MDBs and push for broader reforms in the global financial system. "The G20, under Brazil's leadership, has finally brought climate and finance ministers together. This collaboration must continue and result in concrete outcomes," he said.
Stiell emphasized that progress in climate finance beyond the formal negotiation process at events like COP29 is vital for the success of international climate agreements such as the Paris Accord. "If we fail at either, it could deal a devastating blow to crucial parts of the Paris Agreement," he warned.