The Paris Pact for People and the Planet, which was affirmed by more than 100 countries and global private sector entities in June, aims to ensure that no country has to choose between fighting poverty and fighting for the planet. The pact reflects the Indo-French partnership and their commitment to finding tangible solutions to global challenges. France has exceeded its climate financing commitment and has provided Euro 7.6 billion in climate financing in 2022. In order to address overlapping challenges such as poverty reduction, climate change, and biodiversity protection, there is a need to shift from billions to trillions in global investments, with a focus on private sector funding.
To unlock more private-sector funding for climate and development crises, several actions are proposed. First, a review of global vertical climate funds is suggested to optimize the use of their resources and increase partnerships. Second, a review of post-2008 financial regulations is needed to lower risk perception for global investors who fund sustainable projects in developing countries. Third, credit-rating agencies should be included in the reform agenda of multilateral development banks. Finally, a “green finance” framework should be established to align the financial sector with the objectives of the Paris Agreement.
India’s G20 Presidency has played a crucial role in making progress on these issues, and joint support for the G20 Brazilian presidency is needed to bring this agenda to completion. Additionally, governments must also address debt vulnerabilities in developing countries, and major creditor countries must fulfill their responsibility in debt restructuring. India’s unique capacity to build bridges within the international community positions it as a crucial player in making the global financial system more efficient and just.
