The Investment Imperative: Climate Action and Economic Transformation

Small and economically disadvantaged countries bear the brunt of climate chaos while wealthy nations dither on climate action and delay funding promises. To survive, vulnerable states need to intensify efforts to overhaul the international financial architecture while developing and delivering new funding mechanisms that can secure a resilient future.

The consequences of climate breakdown are strikingly uneven. Affluent nations pour significant funds into maintaining carbon-guzzling affluence while shielding themselves from droughts, floods, and wildfires. In contrast, vulnerable nations that have contributed the least to the crisis are left to confront increasingly catastrophic climatic consequences almost on their own, using scarce domestic resources economic managers desperately need, to secure the long-term well-being of their people. What international funding support is made available is grossly inadequate. There always seems to be ready money available for wars and profligate lifestyles but less and less for countless communities around the world relentlessly hammered by the escalating climate emergency.

The CVF-V20 represents 70 members from Small Island Developing States (SIDS), least developed countries, low-and middle-income countries, and fragile and conflict-affected states, collectively representing 20% of the world’s population while contributing just 6% of global carbon emissions. CVF countries have already lost 20% of their potential GDP growth owing to climate change impacts suffered over the last two decades.

The need for sweeping change is evident. According to the latest V20 estimates, the 70 most climate-vulnerable nations together need approximately USD 490 billion a year in financing by 2030 for climate mitigation, adaptation, and loss and damage. Yet today’s financing systems fall woefully short. Overhauling our financial framework is essential.

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