As world leaders convene in Washington this week for the World Bank and IMF Spring meetings, civil society organisations are calling for urgent action to fix the world’s broken financial systems that are responsible for climate breakdown and entrenching inequality.
To solve the climate crisis that is pushing the planet to the brink, they say, the World Bank and IMF need to fix the world’s financial flows. A UN Trade and Development released ahead of the meetings indicated that the climate crisis is likely to push at least 47 developing countries deeper into debt.
Lidy Nacpil, Coordinator of Asian Peoples Movement on Debt and Development, said that while these meetings of the IMF and World Bank are happening, a worsening debt crisis that is crushing developing countries is proof of the flawed and futile debt relief schemes of the G20 that the IMF and World Bank avidly support and promote.
“For eight decades, the IMF-WB has been instrumental in shaping an international financial architecture that systematically extracts the wealth of the Global South, perpetuating a cycle of indebtedness, poverty, and environmental degradation,” Ms Nacpil said.
“Then and now, they are major actors in exacerbating both the climate and debt crisis, as they persist in fossil fuel lending and in pushing more loans for climate action,” she added.
#FixTheFinance
A global week of Climate Justice Finance Mobilisations kicked off on April 16 until April 19 under the banner #FixTheFinance, to hold governments, UN climate talks, private banks, the IMF, the World Bank and multilateral development banks – those that hold the purse strings – to account.
Happy Itros, young climate activist, Global Platform, Tanzania, said that it’s high time financial institutions divested from destruction and started investing renewables.
The young activist called on WB-IMF to focus on funding renewable energy projects and agroecology instead of fossil fuels to empower the next generation to combat the climate crisis head-on.
“Funding fossil fuels is equal to financing our planet’s death and robbing young people of their future. Any bank that prioritises profits over the wellbeing of our planet is funding a disaster that disproportionately affects people in the global South, especially women and youth. As young people, we are witnessing firsthand the toll of the climate crisis on our lives and prospects. When floods and landslides ravage our lands, our livelihoods are swept away, leaving us destitute,” he said.
“Investing in sustainable alternatives for young people is not just a matter of environmental urgency, it’s an investment in the future prosperity of our planet. Young people deserve a present and a future that is far brighter than the one we are currently hurtling towards,” he added.
Tripling of renewable energy by 2030
Last year, the annual UN climate talks in Dubai reached a momentous agreement: a global renewable energy target that called for the tripling of renewable energy capacity and doubling of energy efficiency gains by 2030.
But green energy campaigners say that while the move was significant, more needs to be done, fast.
“The climate crisis is now at a critical juncture. The renewable-powered world has never been closer to our grasp: investment into renewables is at an all-time high. But we need to take it to the next level, and to finally leave fossil fuels firmly behind,” said Andreas Sieber, Associate Director for Global Policy and Campaigns at 350.org.
Mr Sieber emphasised the need to address the immense injustice of the global financial system, with developing countries bearing the brunt of climate impacts without having contributed to it, and rich countries discarding accountability.
“It’s time for rich countries to direct finance into renewable energy in the Global South and to play their part in fixing the system. 2024 is the year to make this happen,” he said.
Eric Njuguna, youth climate justice organiser, Fridays for Future, said: “We must dismantle the neo-colonial and neoliberal dynamics in the World Bank and the IMF. These institutions must stop funding fossil fuels, cancel debts, put an end to austerity and reorient financing towards helping countries achieve a green energy transition rooted in energy and food sovereignty.”
Mr Njuguna added that by imposing conditionalities like privatisation and austerity, Bretton Woods institutions make it impossible for people to access basic human rights like healthcare, education and energy, further exacerbating inequality.
“We call out the hypocrisy of the IMF and World Bank in pushing for debt relief measures when they exempt themselves from participating in those very schemes to protect their credit ratings.
“They have not lifted a finger to compel the participation of commercial and private lenders in public debt reduction, knowing the heavy burden that this represents for developing countries.
“They have also never owed up to their responsibility for the damaging impacts of their loans, from propping up corrupt, repressive regimes and violating human rights to fueling the climate emergency,” he said.
