Finance ministers demand more ambition in climate coalition

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Meeting on the virtual sidelines of the annual meetings this week, members of the Coalition of Finance Ministers on Climate Change pushed for greater ambition, including making the Helsinki Principles binding.

Finance ministers of 52 countries have begun talking about whether to set themselves binding targets for integrating climate change into their stewardship of national economies.

The Coalition of Finance Ministers on Climate Change met virtually on Monday on the sidelines of the annual meetings. It includes most European countries, nine from Latin America, as well as Indonesia, Bangladesh, Nigeria, Ethiopia and Canada — but not the US, China, India, Japan or Brazil.

Members agree to the six Helsinki Principles, striving to align policies with the Paris Agreement, promote carbon pricing, take climate into account in policymaking and budgeting and mobilise private climate finance.

“The Coalition is only a year old and was born as a non-binding coalition, but part of today’s discussion was about whether it could become binding and start to establish targets,” said Gabriel Yorio, deputy finance minister of Mexico.

This will not mean specific targets on how fast to decarbonise, as the Coalition allows each country to act according to its needs. But Pekka Morén, special representative of Finland’s finance minister said: “Some ministers raised the point that the Helsinki principles are aspirational — we should increase the level of ambition and make the principles binding. It was not something concluded, but it was very useful to know they want the level of ambition to be higher. It’s a very important signal for the co-chairs.”

Chile and Finland have co-chaired the group since it began in April 2019, but Chile will step down after next year’s spring meeting, leaving a vacancy. Finland is willing to keep serving if the group wants it to.

Some ministers said they wanted the group to push further in developing common approaches to policies, such as on green budgeting and climate-related financial disclosures.

Ministers agreed a statement saying the $12tr of fiscal recovery measures announced globally “creates a unique window for aligning our economies and policies to the challenge of climate change”.

“The climate agenda is in some ways aligned with the fundamental changes we are going through,” said Yorio. “One of the lessons from Covid-19 has been to look at our work and consumption habits and to question them. This is why the green and sustainability agenda has received such an impetus.”

To outsiders, the Coalition’s progress can seem slow. Dileimy Orozco, senior policy adviser at E3G, the climate change thinktank, in London said. “This Coalition was created to try to have a frank conversation among ministers of finance outside the G20 — there were high hopes of deliverables, but we haven’t seen that.”

She had hoped it would make a much clearer call for the recovery from Covid to be green — particularly because, unlike in the 2008 financial crisis, the multilateral development banks “don’t have the G20 giving them a clear mandate for how they should support countries to recover. That leadership is completely absent.”

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