Mahmoud Mohieldin, the UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, has stated that the world needs a new financial system that relies more on investments and reduces dependence on debt to finance development and climate action, especially in developing countries.
During a television interview with “Al Arabiya” on the sidelines of the Paris Summit for a New Global Financial Pact, Mohieldin explained that achieving the sustainable development goals requires huge annual funding. The goal of confronting climate change alone requires funding of about $2.5 trillion annually, half of which should come from developing countries, and $1 trillion from IFIs, MDBs, and the private sector.
Mohieldin stressed the necessity of developing a new global financial system that increases the capital of MDBs, reduces the cost of debt in developing countries, and relies more on investment than borrowing to finance development and climate action.
He stated that there are ambitions to find a new financial pact that relieves the debt burdens of developing countries and helps them face climate change. Currently, there is an unjustified over-reliance on debt to finance climate action, with up to 65% of funding coming from debt globally and 75% at the level of developing countries.
Mohieldin emphasized that climate finance should focus on the renewable energy sector, as well as adaptation activities related to agriculture, food security, water resources management, countering desertification, protecting forests, and developing infrastructure. He also criticized the fact that developing countries, which contribute the least to the climate crisis, are asked to borrow to finance their climate action, which he believes is unfair.
