OPEN LETTER: Recommendations for G7 Leaders Summit — May 19-21, Japan
Dear G7 leaders, we are writing ahead of the May 19-21 G7 Summit to share our key recommendations to defeat extreme poverty and fight climate change now.
As you know, the world is facing multiple economic, social, and environmental crises. The rate of natural disasters has quintupled; extreme poverty is on the rise again after decades of decline; more than 828 million people go to bed hungry every day; and around 60 countries are now in or at risk of debt distress.
Experts estimate we can and must unlock our financial system to deliver significant increases for joint climate and development action reaching an additional 2% of global gross domestic product (GDP).
G7 Leaders must push for this fundamental shift in the scale, urgency, and quality of international financing to tackle the polycrisis now and finance our future.
We specifically urge you to:
1. Unlock financing to end extreme poverty
Deliver on the $100B SDR Promise
All G7 countries should follow Japan’s lead, which increased its Special Drawing Right (SDR) reallocation to 40%, and make significant, additional SDR commitments to ensure that the $100 billion SDR relocation target is achieved in full this year.
Furthermore, the G7 must support efforts to ensure at least five countries reallocate SDRs to multilateral development banks such as the African Development Bank, which stand ready to leverage their assets to provide more development finance and program assistance to vulnerable African countries.
Fulfill long standing ODA commitments
High quality, catalytic Official Development Assistance (ODA) must continue to be a vital bridge that enables the poorest countries to provide basic needs, opportunity, and empowerment for their citizens. G7 governments should commit to meet or exceed their historic promise of committing 0.7% of gross national income (GNI) to ODA and in particular increase aid to the poorest countries.
Tackle the debt crisis
While debt is usually dealt with at the G20, the G7 have a responsibility to act. We call on the G7 to introduce as of now suspensive clauses in any new debt contracts with poorer countries allowing them to suspend the repayments in face of external shocks such as a natural disaster or a pandemic.
2. Act to build climate, hunger, and pandemic resilience
Deliver on the $100B per year promise on climate finance
The G7 should take the lead in filling the $16.7 billion financing gap needed to finally meet the promise made back in 2009 and three years overdue. The missing $16.7B only represents a fraction of what G7 countries spend each year on fossil fuel subsidies. This funding must be new and additional to ODA and be split evenly between mitigation and adaptation.
Phase out fossil fuels
The G7 must take the lead by going beyond the commitment of Climate, Energy, and Environment Ministers’ in Sapporo and agree to a time-bound commitment to phase out all fossil fuels.
The G7 must also commit to publishing concrete plans on how they will meet their commitment to phase out fossil fuel subsidies by 2025 or sooner, and ensure that fossil fuel subsidies are reinvested in clean, just, and sustainable energy systems, and green recoveries to support the poorest and most vulnerable. Prioritizing decarbonisation of the health system and value chain will also help build human resilience.
Tackle the hunger crisis
With 349 million people across 79 countries facing acute food insecurity, this is the worst food crisis in decades and the G7 needs to act and save lives now by meeting the urgent humanitarian financing gaps at the same time as investing in long term solutions.
That means investing in smallholder farmers and traders, and transforming the food system through investments to institutions such as the International Fund for Agricultural Development (IFAD).
Build pandemic and climate resilience into health systems
COVID-19 overwhelmed health systems worldwide, displacing routine and emergency care for non-COVID-19 related health issues. Climate change is also putting extra stress on systems with more climate-related illness and death, as well as the commensurate rise in disease outbreaks and therefore pandemic threats.
This means we need to allocate a significant part of additional World Bank and Multilateral Development Bank concessional loans for investment in pandemic-resilient and climate-resilient health systems.
3. Commit to scaling climate and development financing
Accelerate an ambitious MDB Reform
As major shareholders, the G7 should call on all multilateral development banks (MDBs) to fully implement the CAF review recommendations. The G7 should also maintain pressure on the World Bank to move quickly and ambitiously in implementing the Evolution Roadmap, take on more risk with an equity-to-loan ratio of maximum 18%, and increase access to financing for countries particularly vulnerable to climate change and external shocks such as pandemics, while maintaining the focus on ending extreme poverty, duly incorporating low-income country (LIC) views, and ensuring that there should not be a tradeoff between support for middle-income countries (MICs) and LICs.
The G7 should also support an early and ambitious IDA replenishment, with a commitment to increase their grant contributions.
Publicly endorse the upcoming Paris Summit for a New Global Financial Pact
The world needs to address the converging crises of climate, biodiversity, extreme poverty, energy, inflation, and food insecurity. This will require wealthy countries to commit to a financing shift which addresses urgent needs, while also laying the groundwork for systemic change.
The Paris Summit must provide such a shift. The G7 must therefore publicly commit to supporting the aims of the June Paris Summit and its goal of significantly scaling development and climate financing in order to adequately address converging global crises and get vulnerable countries back on track towards meeting the UN's Global Goals and an end to extreme poverty.
Global Citizen, Pandemic Action Network, E3G