Topic 1: Accelerating the transition to a climate resilient global economy with climate-smart finance

Topic 2: Increasing financial integrity and transparency

 

Under-Secretary General: Eerika Karstila

Difficulty Level: Intermediate

Countries: Bangladesh, Brazil, Bulgaria, Cambodia, China, Colombia, Democratic Republic of the Congo, Denmark, Egypt, Ethiopia, Fiji, France, Gambia (Republic of the), Germany, India, Indonesia, Japan, Kenya, Liberia, Panama, Saudi Arabia, Senegal, Sierra Leone, Romania, Russian Federation, United States of America, United Kingdom of Great Britain and Northern Ireland, Bolivarian Republic of Venezuela

Topic 1: Accelerating the transition to a climate resilient global economy with climate-smart finance

Climate change is affecting every country on all continents and disrupting the environment, national economics and affecting lives everywhere. Without urgent action, climate change could push an additional 100 million people into poverty by 2030 and thus World Bank’s two goals of ending extreme poverty and promoting shared prosperity cannot be reached without tackling climate change.

 

The Paris agreement that aims to strengthen the global response to climate change by keeping a global temperature rise this century below 2 degrees Celsius above pre-industrial was entered in on 4th November 2016. Yet a more global response is needed. A specific challenge is the financing needed for the transition to a climate-friendly, low carbon global economy that will be counted in trillions. For example, over the next 15 years, the world will require about $90 trillion in new infrastructure to limit the rising of the temperature. Climate change harms the poorest regions and people the most and even a substantial part of the financing is needed in developing and middle-income countries.

 

The world needs a greener financial sector and initiative from both private and public sectors to unlock the opportunities of sustainable development. Climate action provides a great opportunity for sustainable development with investment potential and opportunity to create innovation, green industry, and new jobs. In the last years, we have seen a rising amount of initiatives towards a greener world economy from e.g. the financial sector in form of initiating the green bonds and green loans but new ways to motivate all parts to get engaged in this area are needed. An essential part of reaching the Goal 13 of Agenda 2030: Take urgent action to combat climate change and its impact is increasing climate finance. UN and the member countries need to find new ways to encourage the financial and private sector to work for an increase in investments for sustainable development.

 

 

Topic 2: Increasing financial integrity and transparency

Financial integrity is essential for economic and social development. In order to ensure the right circumstances for development, countries’ financial systems must be transparent, inclusive and function with integrity. Money laundering, corruption, and transnational organized crime create illicit financial flows that undermine good governance, financial stability and economic development. Every year more money flows out of the developing and emerging countries than they receive in foreign direct investment and foreign aid combined. Many developing countries have failed to grow to the point where foreign aid is no longer needed. A potential explanation is the illicit financial flows disrupting the development.

The problem is two-sided: proceeds of crime are laundered to be used for legal purposes along with legally obtained resources being used for criminal purposes such as financing terrorists and transnational crime. The secrecy of the global financial system and tax havens are further contributing to these illicit financial flows. Increasing financial integrity and transparency as well as stopping the illicit financial flows would be a considerable boost for reaching the sustainability goals. Consequently, more transnational action is needed.

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