Latest news with #developingWorld
The Guardian
5 days ago
- Business
- The Guardian
Bank unveils plan tp unlock trillions for climate finance
An innovative plan to use public money to back renewable energy loans in the developing world could liberate cash from the private sector for urgently needed climate finance. Avinash Persaud, a special adviser on climate change to the president of the Inter-American Development Bank, who developed the proposals, believes the plan could drive tens of billions of new investment in the fledgling green economy in poor countries within a few years, and could provide the bulk of the $1.3tn in annual climate finance promised to the developing world by 2035. 'This could be an engine for green growth, and produce the trillions needed for climate finance in the future,' he told the Guardian. 'It could be a transformation.' His ideas will be set out in detail at a UN meeting in Germany this week, kicking off negotiations for the Cop30 climate summit that will take place in Brazil this November against a worrying global background for the discussions. Having missed a deadline in February, the world's largest economies still need to submit plans for their greenhouse gas emissionsbefore the Brazil summit, but so far only a few have done do so. But research seen by the Guardian, carried out by the campaign group Oil Change International, shows that many developed countries are still planning to expand their extraction of oil and gas, despite promising at Cop28 in 2023 to 'transition away from fossil fuels'. The analysis found that the US, Canada, Norway and Australia were responsible for 70% of projected new oil and gas expansion in 2025-35. Romain Ioualalen, the global policy lead at Oil Change International, said: 'It is sickening that countries with the highest incomes and outsized historical responsibility for causing the climate crisis are planning massive oil and gas expansion with no regard for the lives and livelihoods at stake.' At the two-week meeting in Bonn, which ends on 26 June, the vital issue of finance for developing countries – which they need in order to cut their emissions and cope with the impacts of extreme weather – will also come to the fore. The proposals by Persaud and others to buy up loans to renewable energy projects in the developing world could allow billions of dollars of private sector cash to flood the sector, in a big boost to global climate finance. The plan, which is being pioneered by the IADB, would involve getting taxpayer-funded development banks to buy existing loans to green projects in poor countries, which would free up investment from private sector lenders. Such loans are relatively low risk because they are already performing – but because they are in developing countries, with credit ratings lower than those of rich states, mainstream private sector investors such as pension funds are often forbidden from touching them because of their strict rules on credit-worthiness. But if those loans are backed instead by development banks, which can provide guarantees against default, and which themselves have impeccable credit ratings, the 'repackaged' loan finance can meet private sector criteria. 'The lightbulb moment was realising there was $50bn in performing green loans in Latin America,' said Persaud, a former adviser to Barbados's prime minister, Mia Mottley, who has championed climate finance. 'Why not buy that to enable new projects to be created?' Key to the concept is that when the loans are bought up by the development banks, which pay a small premium to the current private sector creditors that own the loans, the originators of the renewable energy projects must agree to use the finance they gain access to in new projects. This creates a 'virtuous circle', by which when the loans are bought up, developers – who already have expertise in setting up successful renewable energy schemes – seek new opportunities, which leads to further investment. IADB is working on launching the programme now, and is expected to send a request for proposals within the next few months, before Cop30. The initial portfolio of loans is likely to be about $500m to £1bn. Several private and public sector experts said Persaud's ideas could have a big impact. Mattia Romani, a senior partner at Systemiq, a consultancy that is working with Cop30 on climate finance, said: 'It is a very powerful initiative, both pragmatic and innovative. Given the constraints we will inevitably face in the coming years, securitisation is one of the few realistic tools to reach [the sums needed]. 'This initiative is designed to unlock institutional capital by leveraging the balance sheets of domestic commercial banks –securitising their loans so that they can meet the fiduciary needs of institutional investors, and turning them into engines for transition finance. What's new is the direct engagement with local banks – – we are starting with a pilot in Latin America.'
The National
11-06-2025
- General
- The National
An alarming UN report should prompt a rethink about global fertility
A report released on Tuesday by the UN Population Fund (UNFPA) warns of 'tectonic population changes [that] will shape the future of humanity for generations to come'. The cause is a decline in global fertility rates 'at a breathtaking scale and pace'. The UN has, up until now, been loath to give a view on fertility, perhaps because it is such an explosive subject. The issue of whether our species should have fewer children or more is often tangled up in debates about climate change, feminism, resource scarcity and even racism. In his influential 'Essay on the Principle of Population', published in 1798, the demographer Thomas Malthus argued the human population would eventually outgrow the planet's resources. Although our numbers have increased eight-fold since then, Malthusian fears have proved largely unfounded. As countries became richer, their fertility levels fell. While birth rates remained high in much of the developing world over the past century, it was generally accepted that these, too, would fall as these societies became more prosperous. The theory behind this is that because wealthier societies enjoy greater life expectancy, lower child mortality, improved female literacy and independence, and more urbanised lifestyles, their adults are less likely to 'need' many children. Today, birth rates in much of the developing world are indeed falling – but, as the UN report explains, the reasons are complex, and not altogether positive. In many cases, financial difficulty – not prosperity – is the culprit. Moreover, this is the case in some wealthier countries, too. Across the 14 developed and developing countries the UNFPA surveyed, 39 per cent of people cited 'financial limitations' as a reason for not having a child despite wanting one. Today, birth rates in much of the developing world are indeed falling – but the reasons are complex, and not altogether positive Time is another issue. Modern life often demands several hours a day in commute time or employment in a second job. That leaves less time for child-rearing. The result is a kind of dark mirror of the refutation to Malthus. Development and modernity appear to have overcorrected in freeing us from the burden of unsustainably large families – they are now beginning to box us into unsustainably small ones. 'One in four people currently live in a country where the population size is estimated to have already peaked,' the UNFPA points out. 'The result will be societies as we have never seen them before: communities with larger proportions of elderly, smaller shares of young people, and, possibly, smaller workforces.' By the end of the century, the global population could shrink for the first time since the 1300s, when the Black Death ravaged Europe and Asia. In some wealthier countries where birth rates have already plummeted, the debate has become polarised. Some pro-natalists – advocates of more births – warn of native populations being 'replaced' by foreign immigrants, while others predict a collapse in pension systems as the workforce diminishes. Some of Malthus's intellectual descendants, meanwhile, point to climate change as a reason to welcome population decline. According to the UNFPA, however, these concerns are beside the point. The real crisis in this picture, it says, is the growing lack of reproductive agency. Millions of families around the world are unable to have as many children as they'd like, but millions of others are also having more than they intended. The former is fast overtaking the latter as the dominant trend, but in both cases the problem is that a huge number of couples feel they do not have control over the size of their families. This is a reminder that while it is, of course, important to have policy discussions that promote sustainable population growth, ultimately the guiding principle of fertility ought to be freedom – ensuring that couples are fully empowered to build the kind of family that works best for them. That is a very different – and much more fruitful – way of framing the matter.
