President of the European Commission Ursula von der Leyen attended on 22 June in Paris, France, the Summit for a New Global Financing Pact. The summit gathered heads of state and government, representatives of financial institutions, and representatives of the private sector and civil society who examined the interactions between multilateral development bank reform, mobilisation of private capital, climate finance, green infrastructure and solutions related to debt.
President von der Leyen first spoke about the Global Gateway, the EU's investment strategy launched in 2021 that aims to mobilise up to €300 billion of investments for sustainable and high-quality projects all over the world. She stressed that the strategy was not only about funding, but also about transfer of knowledge and upskilling and reskilling of the workforce, and that it created a conducive environment for private investors.
The President expanded on the topic of attracting more private investment in climate finance for the developing countries, highlighting the benefits of the green bonds.
"Green bonds are vital to help any kind of country to push forward the green transition and to invest in the infrastructure needs", she said, recognising at the same time its challenges such as lack of expertise or lack of information about interesting markets. To address that, she offered to share the EU's expertise and know-how on how to develop green bonds markets.
She also said the EU wanted to financially support the de-risking for the investors. "Together with the EIB and the Development Finance Institutions of Member States, we are now committing EUR 1 billion to give private investors the certainty they need to step up their investments. And this could attract around USD 15 to 20 billion of sustainable investment."
She concluded on the topic of carbon pricing as one of 'the most effective tools to cut emissions in a way that nudges the polluters to pay for the pollution or that nudges participants into innovation'.
Since 2005, when the EU started to introduce carbon pricing, the revenues from carbon pricing reached EUR 142 billion, and at the same time, CO2 emissions went down by 35%. The EU is now extending the emissions trading to buildings and road transport sectors.
Following this, the President proposed to the summit participants that we look at global carbon pricing because that could generate much more funding that could then go into the climate finance 'that we so badly need'.
She gave an example of highly developed countries. "For example, if we take the G20, they generate 80% of greenhouse gas emissions. If we only cover for example 60% of the greenhouse gas emissions with carbon pricing, you can imagine what could be generated and how much investment this could liberate to go into climate finance".
Finally, at the summit, the EU and the International Partners Group announced a Just Energy Transition Partnership with Senegal combining climate and development goals. "Together, we are supporting a major energy transition, which will benefit people in Senegal and across the world - with access to affordable and reliable renewable electricity, good local jobs, and a healthier planet," President von der Leyen said in a joint statement.
