The Coalition of Finance Ministers for Climate Action - Santiago Meeting
Following its successful launch at the WBG-IMF Spring Meetings in April 2019, the Coalition of Finance Ministers for Climate Action hosted its 2nd Sherpa meeting, from June 4-5, in Santiago, Chile. The Santiago meeting featured technical experts from 18 member countries, as well as representatives from partner institutions such as the NDC Partnership, UNEP, and UNFCCC.
At the meeting, Coalition members initiated the development of a Santiago Action Plan, which would outline the Coalition's efforts in championing and achieving the Helsinki Principles. During the meeting, leading member countries presented their aspirations on carbon pricing, fiscal planning and budgeting, and private finance mobilization.
The Coalition will host Finance Ministers during the WBG-IMF Annual Meetings in October 2019 to report on the progress of its work.
The Launch of the Coalition of Finance Ministers for Climate Action
In April 2019, at the Spring Meetings of the World Bank Group and International Monetary Fund, Finance Ministers from more than twenty countries 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 the Helsinki Principles at the meeting, that promote national climate action, especially through fiscal policy and the use of public finance.
The countries that have endorsed the Helsinki Principles are:
The Coalition will help countries mobilize 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.
“Finance ministries have a crucial role to play in accelerating the global shift to a low-carbon, climate-resilient growth model,” said World Bank CEO, Kristalina Georgieva. “This 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.”
"Climate change is a real threat nowadays but we can turn it into an opportunity,” said Felipe Larraín Bascuñán, Minister of Finance, Chile. “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.”
"The Coalition will be successful, if it helps us plan concrete, effective policy measures to address the climate crisis nationally, regionally and globally,” said Petteri Orpo, Minister of Finance, Finland. “The Coalition must rely on analytical work and sharing of experiences to achieve solutions that work in practice."
“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,” said Bruno Le Maire, Minister of Finance, France. “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.”
The World Bank will serve as secretariat for the Coalition and will partner with various institutions to provide strategic and technical support to governments, including the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), UNFCCC Secretariat, UN Development Programme (UNDP), UNEP Finance Initiative, the NDC Partnership, the Network for Greening the Financial System (NGFS), and other multilateral development banks.
Finance Ministers know most clearly the economic consequences of climate change: both the risks posed by its mounting impacts to their economies, as well as, increasingly, the opportunities of climate action which could unlock $26 trillion globally in investments and create 65 million more jobs through 2030. They can also play a leading role in tackling climate change, incentivizing climate-informed public expenditure, and utilizing climate fiscal tools such as carbon taxes and emissions trading systems to cut emissions and prioritize low-carbon growth.
At the 2018 Annual Meetings of the World Bank Group and the International Monetary Fund in Bali, Indonesia, governments from 39 countries came together to boost their collective engagement on climate action. The group recognized the challenges posed by climate change, the unique capacity of the world's finance ministers to address them, and ways in which these efforts could be strengthened. Several governments expressed strong support for the development of a Coalition of Finance Ministers, which would promote cohesion between domestic and global action on climate change, boost ambitions, reaffirm commitments, and accelerate actions to implement the Paris Agreement.
In December 2018, the Finance Ministers of Finland and Chile, supported by the World Bank's Climate Action Peer Exchange (CAPE) initiative, agreed to co-lead the Coalition and invited other governments to meet and discuss its structure, focus, and goals for the coming 2 years.
The Helsinki Meeting
In February 2019, the Finance Ministry of Finland convened the first technical meeting for Sherpas from 19 countries in Helsinki. The meeting built consensus on key documents that would guide the goals and actions of the Coalition, including a set of common principles – the "Helsinki Principles" – designed to inspire and support ambitious climate action in areas where Finance Ministries have influence.
The Helsinki Meeting also featured a discussion on best practices in areas such as environmental fiscal reform, climate-informed budgeting and planning, public investment management, and mobilization of private finance.