14 April 2019: A Coalition of the Willing comprising finance ministers from more than 20 developed and developing countries has pledged to drive stronger collective action on climate change and its impacts. The Coalition will pursue a set of six ‘Helsinki Principles’ that promote national climate action, especially through fiscal policy and the use of public finance.

The formal launch of the Coalition of Finance Ministers for Climate Action took place during the Spring Meetings of the World Bank Group and International Monetary Fund (IMF), held from 12-14 April 2019, in Washington, DC, US.

The World Bank will serve as the secretariat for the Coalition, and will partner with various institutions to provide strategic and technical support to governments, including the IMF, the Organisation for Economic Cooperation and Development (OECD), the UNFCCC Secretariat, and the UN Development Programme (UNDP), as well as other UN agencies and the Nationally Determined Contributions (NDC) Partnership.

Specific support actions to be provided by the Coalition will include: helping countries mobilize and align the finance needed to implement their national climate action plans; establishing best practices such as climate budgeting and strategies for green investment and procurement; and factoring climate risks and vulnerabilities into members’ economic planning.

Designed to support Finance Ministers to share best practices and experiences on macro, fiscal, and public financial management policies for low-carbon and climate-resilient growth, the Helsinki Principles were conceived in February 2019 in Helsinki, Finland. The meeting was co-convened by Chile, which will host the UN Climate Change Conference in December 2019.

NDCs have the potential to transform our development pathways at an unparalleled scale and pace across all societies.

Referring to UN Secretary-General Antonio Guterres’s “mandate” to President Macron to accelerate climate finance in the run-up to the UN Climate Action Summit in September 2019, France’s Finance Minister Bruno Le Maire noted that many countries have already formulated supportive policy initiatives, and called for stepping up such actions to meet the Paris Agreement commitments. Felipe Larraín Bascuñán, Minister of Finance, Chile, called for governments to stimulate the private sector to invest in innovative solutions that go beyond traditional tools like carbon pricing or the phasing out of fossil fuels by incorporating companies’ risks and externalities into the investment decision-making process.

The announcement came amidst calls for greater resolve to achieve the twin World Bank goals of tackling extreme poverty and boosting shared prosperity in the face of “deceleration” in global growth throughout 2018. In his address to the 99th Meeting of the World Bank and IMF’s Development Committee on 13 April, UNDP Administrator Achim Steiner highlighted the potential of NDCs to “transform our development pathways at an unparalleled scale and pace across all societies.” He noted that achieving NDCs and financing the global transition to a low-carbon and climate-resilient economy will require an investment of at least USD 60 trillion by 2050, which will require using public finance strategically to leverage increased volumes of private finance.

A communiqué issued by the Development Committee stresses the importance of adopting growth-enhancing policies while containing risks and protecting the most vulnerable. It calls on both institutions to work jointly with policy makers “to identify the right balance, given country circumstances, between supporting demand and rebuilding fiscal space; to help countries improve debt management capacity, sustainability, and transparency; and to strengthen domestic resource mobilization.”

Welcoming the adoption of the Helsinki Principles, several observers pointed to the involvement of “the non-usual suspects” as an essential element in the emerging “soft architecture” for green and sustainable finance. In a related development, the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) released its first comprehensive report on 17 April titled, ‘A Call for Action: Climate Change as a Source of Financial Risk.’ An initiative of Banque de France, the global network was established at the 2017 One Planet Summit in Paris, France, and currently includes 34 members and five observers.

A series of high-level events planned for September 2019 will further seek to enhance the visibility of global challenges in achieving climate-related targets and the collective action required to address them. These include: the High-level Political Forum on Sustainable Development (HLPF), convened under the auspices of the UN General Assembly (UNGA), also referred to as the ‘SDG Summit’; the High-level Dialogue on Financing for Development (FfD); and the UN Climate Action Summit. [World Bank Press Release] [Helsinki Principles] [World Bank President David Malpass’s Statement] [UNDP Administrator Achim Steiner’s Statement] [Spring Meetings Website] [A Call for Action: Climate Change as a Source of Financial Risk] [Climate Home News Article] [SDG Knowledge Weekly on Public, Private and Blended Finance]