A scene from the 2019 Spring Meetings of the World Bank and IMF, where the coalition was launched | Credit: World Bank / Simone D. McCourtie
Finance ministers from 23 countries pledge to align fiscal policy with Paris Agreement targets
Finance ministers from 23 leading economies have joined forces to promote the use of fiscal policy to drive climate action.
At a meeting of the World Bank Group and International Monetary Fund over the weekend ministers from developed and developing nations officially formed the ‘Colalition of Finance Ministers for Climate Action’.
The coalition jointly endorsed six principles – dubbed the Helsinki Principles – which include a promise to align members’ tax and spend policies with the Paris Agreement.
They also promised to help countries mobilise the cash needed to fulfil climate pledges, as well as forge a blueprint for climate budgeting, green investment, and public procurement.
“The Coalition will be successful, if it helps us plan concrete, effective policy measures to address the climate crisis nationally, regionally and globally,” said Petteri Orpo, Minister of Finance for Finland. “The Coalition must rely on analytical work and sharing of experiences to achieve solutions that work in practice.”
The UK Chancellor Philip Hammond was one of the 23 ministers to join the coalition. He promised ahead of the summit to push for greater cooperation between the UK and other countries to tackle “the world’s most urgent challenges, such as climate change and slower growth”.
Hammond is under domestic political pressure from his opposite number, Shadow Chancellor John McDonnell, who along with Shadow Sustainable Economy Minister Clive Lewis has promised to deliver a “radical shift in Treasury culture” to embed sustainability into UK fiscal policy.
Led by Chile and Finland, other nations taking part in the new initiative include Austria, Costa Rica, Denmark, France, Germany, Ireland, Kenya, Mexico, Netherlands, Nigeria, Philippines, Spain, Sweden, and Uganda.
The CEO of the World Bank Kristalina Georgieva said finance ministries have a vital role in accelerating the low-carbon transition.
“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.
Source: – Business Green