FINANCE Secretary Carlos G. Dominguez III urged multilateral development banks (MDBs) to set up a harmonized set of guidelines in vetting climate mitigation projects of developing countries in a bid to encourage the flow of private sector capital to these initiatives.
In a letter jointly addressed to the presidents of the World Bank Group (WBG), Manila-based Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank (AIIB), Dominguez said these multilateral lenders are in the best position to provide the “seal of good housekeeping” that would prompt the private sector to invest in these projects.
The letter dated November 7, 2021 was addressed to WBG President David Malpass, ADB President Masatsugu Asakawa and AIIB President Jin Liqun.
“With the public and private sectors resting their trust and confidence in MDBs, I propose that the WBG, ADB, and AIIB collaborate in setting up a harmonized set of guidelines to determine the viability and sustainability of climate projects,” said Dominguez, who is also the chairman-designate of the Philippines’s Climate Change Commission (CCC).
Dominguez said his proposal will allow the MDBs to “play a pivotal role in mobilizing the trillions of dollars in private sector financing available for climate adaptation and mitigation projects.”
The finance chief also said MDBs can set the standards for transparency and accountability in monitoring the climate-change initiatives of developing countries to further assure private investors of the prudent use of the funds they have invested in these projects.
He said the three MDBs can also work together with other development banks around the world in ensuring that such standards and guidelines are adopted.
Dominguez broached the proposal to the MDBs after observing that the series of meetings in the 26th United Nations Climate Change Conference of Parties (COP 26) in Glasgow, Scotland, have largely focused “on consensus regarding certain principles and parameters on climate change without a clear understanding of how global finance can play a significant part in moving the climate agenda along.”
In his letter, the DOF chief said: “Combating climate change should move beyond conducting annual meetings that, unfortunately, often yield unfulfilled commitments. We should now all focus on applied solutions and workable programs to quickly reduce greenhouse-gas emissions. We have a planet to save and do not have much time to do it.”
The Philippines had demanded at the start of COP 26 that the world’s wealthiest economies, which are responsible for most greenhouse-gas emissions, make good on their 2009 commitment to channel US$100 billion per year by 2020 to the climate adaptation and mitigation initiatives of developing countries.
Dominguez pointed out that “it may be impossible to achieve the US$100-billion goal, much less come out with a higher achievable target” without resolving the critical question of how global finance can serve as a catalyst for climate action.
Dominguez has since said climate finance should constitute a “blended approach” of sustainable orchestration of grants, investments, and subsidies.
As its Nationally Determined Contribution (NDC) to the Paris Agreement, the Philippines has committed to a projected GHG emission reduction and avoidance of 75 percent from 2020 to 2030 for the sectors of agriculture, wastes, industry, transport, and energy despite being among the countries with the smallest carbon footprints.
This, despite the Philippines contributing only 0.3 percent of the world’s total GHG emissions but landing on the list of the countries most vulnerable to the destructive impact of erratic weather patterns resulting from climate change.
DOF tells MDBs: Harmonize rules on climate-project funds
Source: News Paper Radio
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