Macron Calls for ‘Finance Shock’ to Save Planet at Summit for a New Global Financial Pact

In his opening address at the Summit for a New Global Financial Pact in Paris on 22 June 2023, French President Emmanuel Macron called for an overhaul of global financing architecture to meet the challenges of #ClimateChange which were exacerbated by the recent #COVID pandemic.

Several countries are in a state of financial distress. They have either defaulted on loans or have requested for debt restructuring in order to be able to come out of the economic crisis aggravated by the war in Ukraine. Furthermore, countries should not have to choose between development and environment.

World Leaders Debate New Global Financial Pact in Paris

The Summit saw the attendance of over 40 heads or state or government and more than 300 delegates, including from international organizations, captains of industry and NGOs. Without a ‘shock to the system’, it will be quite difficult to attain the UN #SDG.

Under the Just Energy Transition Partnership (#JETP) framework, Senegal inked a EUR 2.5 billion deal to acceleration its #GreenTransition and aims to achieve a 40% of renewables in its energy mix by 2030. The implementation plan will be finalized in the next 12 months.

During the Summit, a deal was reached to restructure the debt of Zambia. In 2020, Zambia defaulted on its USD 18.6 billion foreign debt, mostly held as #EuroBond. The current deal covers a USD 6.3 billion tranche, of which China EXIM Bank held the lion’s share amounting to USD 4.1 billion. Under the new arrangement, Zambia will enjoy a 3-year grace period during which only interest will be due, following which the repayment will be extended over 20 years.

Macron, Li and Hichilema at Paris Financing Summit

One of the new measures being debated is the levying of a Maritime Tax. Ships are responsible for the emission of a significant amount of greenhouse gases and the Maritime Tax will motivate shipping lines to accelerate the transition to #NetZero. Responding to the call, shipping giants Maersk and MSC, to name a few, have initiated programs to trial hydrogen and other greener fuels.

We are calling for a new multilateral climate change action mechanism financed from global carbon taxes on fossil fuel, aviation, marine transport, among other transactions, to fund #decarbonization, adaptation and nature protection and regeneration.”

Kenyan President William Ruto

Kenyan President William Ruto declared that the current global financial architecture as unjust, punitive and inequitable! Presidents Ruto and Ramaphosa pointed out that African countries are not begging for aid but asking to participate in the solution.

The #GlobalSouth deplores that the sums available for #ClimateAction have fallen well short of what was promised. Wishing to end on a positive note, Macron highlighted that the USD 100 billion goal set at the Copenhagen Summit back in 2009 is likely to be finally achieved in 2023.