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Why Finance Ministers Care About Climate Change & Sustainable Development

Rachel Kyte's picture

If you want to fundamentally change how countries use energy, value their natural environments, or combat climate change, you have to talk to the people who hold the purse strings.

That’s what we’re doing this week. Finance ministers from countries around the world are in Washington for the annual World Bank/IMF Spring Meetings. We’re talking with them about these issues and more as we help countries shift to more sustainable development.

Underlying everything: climate change. This isn’t just an environmental challenge – it’s a fundamental threat to economic development and the fight against poverty. I can’t repeat that often enough. If the world does not take bold action now, a disastrously warming planet threatens to put prosperity out of reach for millions and roll back decades of development.

We’ll be talking about climate action in every conversation, including a ministerial dialogue on sustainable development being convened by the leaders of the World Bank, the IMF and the UN.

The good news on climate change is the number of cities, regions, and countries I can point to right now that are making progress, putting in place the policies and systems that will successfully reduce their greenhouse gas emissions. Take carbon markets: China, Chile and more than a dozen other countries are working on market-based solutions and learning from one another through the Partnership for Market Readiness. Networking these markets – something we’re working on at the World Bank – will strengthen them and help to build the architecture, that together with ambitious emissions reduction targets at the national level, can establish a robust price on carbon that can drive clean investment.

Building a network of carbon markets is one way to fight climate change and avoid a 4 degree-warmer world. Another is ending harmful fossil fuel subsidies and shifting that money to support systems that actually help the poor. We have to get prices right and get finance flowing.

Sustainable Energy for All

We’re also committed to expanding renewable energy and energy efficiency and securing the goal of providing energy access for all by 2030.

Our president, Jim Kim, is chairing a meeting this week of the Sustainable Energy for All Advisory Board with UN Secretary-General Ban Ki-moon. SE4All’s three goals: ensure universal access to modern energy services, double the global rate of improvement in energy efficiency, and double the share of renewable energy in the global energy mix.

Natural Capital Accounting

We know it is difficult to get different decisions without different data. Valuing natural resources is another step toward more sustainable growth. We’re meeting with the Wealth Accounting and Valuation of Ecosystem Services Partnership and with many of the 62 countries that stepped up last spring at Rio+20 to support the idea of factoring nature into their national accounts.

The first movers are already demonstrating an impressive array of ideas: water accounts in Botswana; ecosystem accounts in Australia to help manage the Great Barrier Reef; forest accounts in Kenya to see how regulating forest services contributes to the environment. Through natural capital accounting, these countries can see the full extent of their natural assets – an average of 36% of low-income countries’ wealth.

Services for the Poor

Sustainable development must also be inclusive development. Bettering human lives and ending poverty is central to everything we do.

On Friday, you can watch live online as UN Deputy Secretary-General Jan Eliasson and UNICEF Executive Director Tony Lake join me for a conversation about financing and business solutions to close the gap in access to basic sanitation – one of the Millennium Development Goals that lags farthest behind. The UN is calling for an end to open defecation by 2025, and we’re on board to help. That means moving faster to provide access to sanitation for 2.5 million people currently without.

I’m looking forward to all of these conversations and to the progress we can make as forward-thinking finance ministers continue to incorporate sustainable development into their national decisionmaking. No one group alone can make all of this happen– it will take global coalitions of the working, public and private sector, all doing their part to stop climate change and put the world on a sustainable path for a cleaner, more inclusive future.

Rachel Kyte
Vice President for Sustainable Development
www.worldbank.org/sustainabledevelopment
Twitter: @rkyte365

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