Katowice, 11 December, 2018 – As the 24th Climate Change Conference of the Parties (COP24) in Katowice is going into its decisive second week, many issues are still at stake – most importantly the development of the Paris Rulebook that details how the landmark Paris Agreement will be implemented.
One crucial component in supporting climate ambitions and fulfilling the objective of keeping global warming below 1.5° Celsius is finance. Global financial flows, public and private, have to be shifted to drive the urgent transformation towards climate resilient and low-carbon economies. This year, the Vulnerable Twenty (V20), a group of finance ministers that represents 48 of the most vulnerable countries, is driving ambitious progress. During policy meetings and panels happening around COP, the V20 have managed to advance financial responses to climate change and succeeded in moving the global debate forward towards solutions that allow vulnerable countries to ensure greater financial protection, like insurance, and de-risk investments. As a technical partner, the Munich Climate Insurance Initiative (MCII), hosted at United Nations University’s Institute for Environment and Human Security (UNU-EHS), has been supporting them with expertise and research
“Climate and disaster risk financing solutions are crucial to help vulnerable countries and communities in dealing with climate risks”, highlights Soenke Kreft, Executive Director at MCII. “To be accessible, solutions have to be context-specific, affordable and sustainable.” To facilitate accessibility, the costs of climate risk solutions must be brought down, including for the lowest income segments, and capacities of the public and private sector must be strengthened.
Vulnerable countries have already initiated some extraordinary measures. The Philippines started transforming its climate finance landscape when members of Congress, through the leadership of Senator Loren Legarda, crossed party lines to pass the People’s Survival Fund (PSF). “The PSF is the only national adaptation fund in the Philippines and sets high ambition of what inclusive climate financing should look like”, said Secretary Emmanuel De Guzman, Climate Change Commission of the Philippines.
An important forum for the V20 is the G20-V20 InsuResilience Global Partnership, a new collaborative platform between countries, private sector, civil society and academia to drive the financial protection and resilience agenda. “By co-chairing the High Level Consultative Group of the Partnership, the V20 demonstrated their leadership role in shaping the paradigm towards systematically employing financial protection instruments. This is crucial for fostering inclusive development and economic resilience for vulnerable communities and countries“, Soenke Kreft explains further.
MCII and the UN Environment’s Principles for Sustainable Insurance Initiative (PSI) have been identified as technical partners to support the development of V20-led initiatives for enhanced financial protection and investments through the Sustainable Insurance Facility (SIF) and the Accelerated Financing Mechanisms for Maximal Resilience and 100% Renewable Energy. Both institutions are also members of the InsuResilience Partnership.
“Vulnerable countries can be effectively encouraged to pursue greater climate action if we have the means to implement our strategies”, says Maybelline Bing, Secretary of the Ministry of Finance, Republic of the Marshall Islands. Vulnerable countries need access to a far broader menu of instruments, and predictable and effective financing options. These support vulnerable countries in accelerating the transformation of key facets of their economies towards resilience and ensure resilient debt management.