Earth Today | ‘International financial reform a must’
SIDS want better access to money, support to build resilience
SMALL ISLAND developing states continue to champion the comprehensive reform of the international financial architecture in order to address the mounting challenges, including climate change and debt, with which they are faced.
“Transformational change is needed in the governance structures of the international financial institutions to ensure SIDS can effectively participate where decisions are taken,” reads the 2023 Declaration of the leaders from the Alliance of Small Island Developing States (AOSIS), issued on the margins of the 78th session of the United Nations General Assembly held in New York on September 22.
“We recognise that improving SIDS’ access to finance is critical for economic recovery, building resilience and sustainable development. We call for the establishment of a dedicated debt treatment mechanism for SIDS to enable sound debt management. This mechanism will aim to foster all state-contingent instruments, debt financing, reprofiling, debt relief, including cancellation, restructuring and swaps, as well as utilising blue and green bonds,” it added.
At the same time, SIDS leaders reminded the world that there is “urgent need for substantial, scaled up action” to deal with climate change and to meet the 1.5 degrees temperature goal in order to “safeguard our planet, its people and its biodiversity, and to prevent us surpassing planetary boundaries, in line with the 2030 Agenda and Paris Agreement”.
RISKS AND IMPACTS OF CLIMATE CHANGE
The Paris Agreement sees countries committing to “holding the increase in the global average temperature to well below two degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change”.
The 1.5 target is especially important for Caribbean and other SIDs who have a high vulnerability to climate change impacts, including sea level rise and the associated compromised freshwater resources; extreme hurricanes and droughts, the likes of which have significantly challenged island nations over recent years; and undermined public health.
“In order to avoid breaching further irreversible tipping points, urgent actions are needed to bridge the wide emissions gap and fulfil the international community’s commitment to limit global temperature rise to 1.5 degrees above pre-industrial levels, while recognising that even with limiting global warming to 1.5, SIDS will continue to incur severe loss and damage, and exceeding this limit will be catastrophic for our future,” the SIDS leaders noted.
Also required, they insisted, is attention to sustainable energy sources.
“We must collectively ensure a global accelerated just transition to more sustainable energy sources and systems toward a net zero world by 2050, through promoting the development of low emission technologies, and removing barriers for the transboundary flows of clean and renewable energy,” they explained.
“We remain concerned that SIDS continue to face high transaction costs for attaining renewable energy and call on the international community, including regional and international development banks, international financial institutions, development partners and other relevant stakeholders to enhance and scale up adequate and predictable support, capacity building, technology transfer and financial assistance to SIDS to enable just energy transition,” they added.