Have we already missed the climate opportunity of the year?

We’re only halfway through the year, and I already have my candidate for Climate’s Missed Opportunity 2023.

In fact, I think it will be a multi-category winner, as it’s also in the running for Most Important Thing You’ve Only Vaguely Heard Of.

OK, I’m not great at snappy award titles – but I know a game-changing climate idea when I see one. And the Bridgetown Initiative is just that. 

Last month’s Paris Summit for a New Global Financing Pact (I’m not the only one who struggles with snappy titles!) was supposed to be Bridgetown’s grand entrance into climate policy. But the meeting flopped, the initiative went largely ignored by politicians and media, and plenty of greens seems to have missed the story too.

So what’s going on – and why does it matter?

What is Bridgetown?

The Bridgetown Initiative is a package of reforms created by a coalition of developing nations under the leadership of Mia Mottley, the Prime Minister of Barbados. Its goal is to fix the global financial system so that it works with, not against, those most exposed to the ravages of climate change. 

In brief, the demands of the initiative include climate-focussed debt relief (particularly for disaster-struck countries); loss-and-damage funding; access to climate finance; measures to encourage green private investment; and equitable governance reforms.

Taken together, the Initiative is exactly the kind of transformative global solution the climate world desperately needs. More important even than the reforms themselves, Bridgetown marks the global south demanding their right to shape global institutions in the age of climate. It is a visionary piece of environmental justice politics.

Bridgetown also amounts to a forensic analysis of the rot in the existing system. Those countries most exposed to climate change bear the least historic responsibility and are least able to bear the costs. Finance should mediate that, channelling funds from North to South. But the post-Bretton Woods financial system does the opposite, holding emerging markets down in debt traps and currency crises. The Caribbean, for example, is the most indebted region in the world – and over half of that pre-Covid debt was issued to mop up after [climactic] natural disasters.

Unlocking investment

Bridgetown promises to change all of this. The positive impacts would be too numerous to detail in full, so here is just one: what it would mean for cleantech private capital. Today, rates of 12%+ (together with hedging costs of another 5-6%) leaves large-scale green FDI financially unviable in those nations that need it most.  

The measures in the Initiative designed to equalise this discrepancy in the cost of capital (e.g. with $100bn of currency risk guarantees from the IMF) would be game-changing for clean energy developers, amongst others. There is a growing reservoir money in the global north looking to fund win-win climate investments, if we can only clear away the colonial disincentives baked into the system.

The time is now…

We have known about these global inequalities for years – so why now for Bridgetown?

Firstly, a window for radical change in climate policy is opening at last. When even the stay-in-your-lane climate scientists of the IPCC are calling for political and economic ‘systems change’ and the WEF wants to ‘rethink capitalism’, the winds of change have arrived. This creates the political space for Bridgetown.

Secondly, the Global South is stepping into climate leadership, and by necessity. Last year's floods in Pakistan brought home to the global north what everyone else has known for years – that the devastation of climate change is happening right now. Smaller nations – particularly island states in the Pacific and the Caribbean – are galvanising to build new coalitions, and their undeniable moral suasion is forcing rich countries to listen.

Thirdly (and ironically) Bridgetown is a creation of the failures of the COP process. Ever since Paris 2015, the climate world has been desperate for good news – or at least some inspiration. Each year that COP fails to deliver, it creates the space for alternative leadership. Mia Mottley’s opening speech at COP27 stole the show not just because of her passion, intelligence, and courage; but also because we were looking for an inspirational leader to fill the vacuum.

…or soon after?

So why did it fail at the Paris Summit a few weeks ago? There were a few small wins – debt restructuring for Zambia, the G7-Senegal Just Energy Transition, talk about global shipping taxes and some reshuffling of SDRs at the IMF. But overall it squibbed. 

I believe this is a question of timing again. The climate world is ready; but the shorter, sharper cycles of domestic politics won out. Amid post-Covid stagflation, febrile election cycles and the geopolitics of Ukraine and China, the US and Europe simply don’t have the bandwidth. This is complex and expensive stuff, with plenty of vested interests. When most of the G7’s leaders don’t bother showing up, change has no chance.  

So the message from Paris was: not yet. But we shouldn’t lose hope. The Bridgetown Initiative is the kind of transformational wonder we need to get real on climate; and every year, climate moves up the domestic political agenda in the West. Bridgetown will be back – and soon, I hope.

With inspirational leaders like Mottley tapping her watch, it’s surely only a matter of time.