On April 26, the U.N. Secretary-General and the Prime Minister of Barbados convened in New York to discuss mechanisms to distribute climate aid to poorer countries.
U.N. Secretary-General António Guterres and Barbados Prime Minister Mia Amor Mottley met with academics, civil servants and heads of state, including Dr. Alex Soros and Canadian Prime Minister Justin Trudeau, to "advance immediate game-changing steps and longer-term reform" on climate financing.
"The international financial architecture is short-sighted, crisis-prone, and bears no relation to today's economic reality," said Guterres in a press release.
"Building a fair, equal, and peaceful future, with clean air and clean water for everyone, is at the heart of the United Nations Sustainable Development Goals and reflects the vision of the Global Citizen NOW summit," added Trudeau.
According to the 2023 Financing for Sustainable Development Report, 52 low- and middle-income developing economies are either in debt distress or at high risk of debt distress, accounting for more than 40% of the world's poorest people.
The World Economic Forum (WEF) states poorer countries like Barbados face significant risks from climate change, citing "more frequent and intense" hurricanes, rising sea levels, and coastal erosion.
"If countries cannot access the finance they need at rates they can afford, the world will lose the battle, not simply the countries," added Mottley, who wants to revolutionize how the developing world receives climate aid.
In July 2022, Mottley convened a high-level retreat in Bridgetown, the island nation's capital, which led to the Bridgetown Initiative — a call to action to address the "immediate financial needs" of climate change.
Since then, the United Nations has claimed progress on "multiple fronts," including an agreement to establish a loss and damage fund during the U.N. Climate Change Conference (COP27), with the terms to be agreed upon at COP28 in 2023.
Last November, the island nation's leader told COP27 that Barbados could only fight climate change with access to concessional funding. She claimed wealthier countries can borrow capital between 1% and 4% interest rates, while poorer countries face 14% interest rates because they are considered "riskier investments."
Mottley contends the Initiative provides the groundwork for "needed reform" to "outdated" development banks, like the World Bank and International Monetary Fund.
According to WEF, the Bridgetown Initiative would provide funds — while suspending interest payments — to mitigate a debt crisis when nations rebuild after successive natural disasters. The project is likened to the Marshall Plan of 1948, when the U.S. provided over $13 billion to help Western Europe rebuild after World War II.
The Barbados prime minister asked for $1 trillion to fund "climate resilience" in developing countries with climate-vulnerable countries."
Trudeau met with the Barbados prime minister on February 16, praising Mottley for her "truly exceptional" leadership in the Bridgetown Initiative. Both leaders co-chair the Sustainable Development Goals (SDGs) for the U.N. Secretary-General.
"We have been working together on some very, very big issues around the world – whether it's on climate change, of course, where your voice has been incredibly strong; whether it's on the need to adjust the international financial architecture so that middle-income countries that are extremely vulnerable to climate change or to shocks are better supported in their ability to move forward," said Trudeau, according to Barbados Today.
"It's always good to sit down and talk about some of the issues that bring us down to the Caribbean," he said, "whether it's economic growth, whether it's a challenge in Haiti, whether it's climate change, [there's] always a lot to talk about."
Following their meeting, Trudeau announced $44.8 million to tackle climate change in the Caribbean. He allocated taxpayer funds to improve marine and coastal ecosystem management and increase water security in the region.
It has "re-energized the conversation on International Financial Institutions' reform to the overlapping health, climate [and] debt,'' continued the prime minister.
According to a U.N. release, the April deliberations in New York highlighted "an international financial system that is not fit for purpose, with developing countries facing debt overhangs, higher borrowing costs and limited access to liquidity in times of crisis."
They contend that borrowing rates of up to 14% while paying over 20% of revenue for debt servicing shows why the "status quo" is insufficient to fight climate change.
The items discussed include dramatic increases to reach $500 billion annual stimulus for investment in the SDGs and more than $1.5 trillion of private sector investment in the green transformation annually.
The participants emphasized the importance of continuing dialogue about the Bridgetown Initiative and other related efforts to strengthen its tenets and advance shared goals.
According to WEF, Barbados believes the Global Climate Mitigation Trust could leverage $3-4 trillion in private funding for global economic and development policy.