By Reuters Staff
Countries must collaborate more to boost sustainable finance and follow the European Union’s lead in developing green bond standards, European Council President Charles Michel said on Friday.
Speaking ahead of a meeting of G20 leaders on Saturday, Michel said countries must help mobilise the “massive” investments needed to tackle climate change, including by developing common standards for green bonds.
“The European Union has started to work on this, and we believe that the G20 should urgently address the global issue of green finance,” Michel said.
First, on trade. We firmly support open trade and we need to reform the WTO to make our international trade policies greener. And we are working on making respect for the Paris Agreement an essential part of all future comprehensive trade agreements. And, as you know, we have decided to make Europe the first climate neutral continent by 2050.
We will not accept that substandard goods unfairly compete with European products and damage the planet. We are looking into establishing a carbon border adjustment mechanism to avoid carbon leakage. This mechanism would of course be in line with WTO rules. Climate change is a global challenge. We therefore need to create a “green global level playing field”.
Second, the green transition is a huge opportunity to drive forward our economies, and to make this happen we need massive investments. The private sector will be key to these investments.
There are no global standards for so-called “green bonds” for example, and this, in my opinion, is a missing link and an area where we can make progress. We need to develop common standards for these “green bonds” that mobilise savings for green investments. The European Union has started work on this. And we believe the G20 should urgently address the global issue of green finance.
Finally, how can we make our post-COVID world more inclusive? COVID-19 has hit the most fragile hardest, and G20 finance ministers have done good work: the G20 debt moratorium is a good step in the right direction, and it might have to be extended beyond mid-2021.
But in our opinion it’s not enough. We are convinced that more debt relief is needed. All creditors need to do their share. No country must be perceived as getting a “free ride”. Multilateralism means everyone on board. We need a new model of sustainable financing for development, particularly in Africa, to break the cycle of over-indebtedness.