Are finance ministers the unlikely heroes of climate adaptation?
A new coalition of finance ministers has made a commitment to the Helsinki Principles, taking a bold step to adopt effective climate adaptation strategies that may put them one step ahead of their own governments.
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inance ministers, usually a fairly conservative bunch, may turn out to be the unlikely heroes of climate adaptation. Amid all the news this summer, it would have been easy to miss a quiet but important development in climate adaptation – the finance ministers of more than 20 developed and developing countries formed the Coalition of Finance Ministers for Climate Action and pledged to take more robust collective action on climate issues, including adaptation.
Their collective aim, they said, is to direct additional revenue opportunities to tackle climate issues. They notably endorsed six common principles – known as the “Helsinki Principles” – to promote new fiscal policies on climate change, mitigation and adaptation.
The countries that have endorsed the principles are: Austria, Chile, Costa Rica, Cote d’Ivoire, Denmark, Ecuador, Finland, France, Germany, Iceland, Ireland, Kenya, Luxembourg, Marshall Islands, Mexico, Netherlands, Nigeria, Philippines, Spain, Sweden, Uganda, United Kingdom and Uruguay. The coalition was formally launched at the spring meetings of the World Bank Group and International Monetary Fund in Washington, DC, in April.
“Finance ministries have a crucial role to play in accelerating the global shift to a low-carbon, climate-resilient growth model,” said Kristalina Georgieva, the chief executive of the World Bank, which will act as the group’s secretariat and help provide technical support to the ministers through various partnerships with UN agencies and international organizations.
“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,” she said.
The Helsinki Principles call, firstly, for the ministers to align their policies and practices with their Paris Agreement commitments and share best practices with each other for climate action. The ministers also pledged to work on creating effective carbon pricing, as well as take climate change into account when formulating macroeconomic policies, fiscal planning and budgeting, among other things.
Finally, they agreed to help facilitate private investments and the development of a financial sector that supports climate mitigation and adaptation, as well as actively engage in preparing and implementing their Nationally Determined Contributions (NDCs), which identify the post-2020 national climate targets, including mitigation and adaptation, for countries that signed the Paris Agreement.
The formation of the coalition comes against the backdrop of greater understanding of the scope and scale of financial commitments that will be required for low-carbon and climate-resilient growth, especially for countries to meet their NDCs.
UNDP Administrator Achim Steiner recently suggested that for the world to shift to a low-carbon and climate-resilient economy and for countries to meet their NDCs, it would necessitate at least US$60 trillion in investment by 2050, which would require leveraging public finances.
The Helsinki Principles were conceived in February in Finland at a meeting co-convened by Chile, which will host the UN Climate Change Conference in December 2019.
The ideas presented in this article aim to inspire adaptation action – they are the views of the author and do not necessarily reflect those of the Global Center on Adaptation.
