A rare if guarded optimism descended on Paris, along with hundreds of world leaders, bankers and climate activists. They came for a two-day conference called the new Bretton Woods.
The reference is the 1944 gathering in New Hampshire where diplomats hammered the monetary institutions to rebuild the countries after the Second World War – the World Bank and the International Monetary Fund. Now, the goal is to rebuild those systems to cope with a looming crisis: the linked threat of poverty and climate change.
“We don’t have to choose between the fight against poverty and the fight for the climate and biodiversity,” the French president, Emmanuel Macron, argued last year.
Many believe that a new international financial system, one that offers developing countries facing climate crises not crippling debt but financial support, could is in the making.
On Wednesday, on the eve of the conference, 13 world leaders, including President Biden, published a public letter in about 40 newspapers, including Le Monde, saying that they are determined to “make a new global consensus” and that the summit could stand as a “decisive political moment.”
There is also nervousness. Some worry that the conference could prove to be another grandiose summit held by a leader who loves his self-appointed role as a multilateral consensus builder and disrupter – but doesn’t always deliver results.
“The French president has a taste for international initiatives, except that he has been president for more than six years now, and he has run out of energy and confidence,” said Cécile Duflot, director general of the group that fights poverty which is Oxfam in France. The summit, he said, should result in concrete promises of debt relief and not just “chitchatting.”
“When you have 62 countries today that are paying more in debt repayments than in health care, it’s clear that we’re in a bad system,” Ms. Duflot.
The conference grew out of the ideas of Mr. Macron but the prime minister of Barbados, Mia Mottley.
Last November, Ms. Mottley sketched a proposal for financial reform from the stage of the United Nations climate change summit, known as COP27, in Sharm el Sheikh, Egypt. He and his team call it the Bridgetown Initiative.
Described by Ms. Mottley the financial systems that were created three-quarters of a century ago were “imperial,” set up as before in many countries of the world that became independent. He called for a major overhaul so that developing countries that are most vulnerable to climate change – and are already facing debt crises – can access capital to meet the poverty and damage, and will pay for their transition to a green economy.
“Yes, it’s time for us to go back to Bretton Woods,” said Ms. Mottley.
The answer resonated, if unexpectedly: Kristalina Georgieva, the head of the IMF, endorsed the need for reforms. Mr. Biden’s special envoy for climate, John Kerry, has announced that he, too, is on board. So is the chief executive of Bank of America.
Mr. Macron, who has already hosted international summits on biodiversity, protecting the oceans and forests, is also numerous. The project seems a natural fit for the president of the country that hosts the Paris Climate Agreement, and he was soon announced a summit in Paris to advance some proposals.
On the agenda are many things called for by Ms. Mottley: use of public money to leverage large-scale private investment for developing countries; increasing the countries’ access to financial support from the IMF; and allowing countries to stop repaying international loans after climate-related disasters.
The German chancellor, Olaf Scholz, and the Chinese premier, Li Qiang, were among the attendees. So is Janet Yellen, the US Treasury secretary.
“In the eight years that I campaigned, there was nothing like this – these types of heads of state with the political will to make a deep reform of the architecture of international finance,” said Daniel Boese, a campaigner at the advocacy group Avaaz.
Just five years ago, a discussion on the reform of the World Bank would have been prohibited, said Laurence Tubiana, chief executive of the European Climate Foundation and one of the architects of the 2015 Paris agreement. But since then, the economic situation faced by many developing countries in the world has worsened, he said.
“We need political leadership, and he is positioned to do that because he understands all these issues,” Ms. Tell about Macron. “I hope he really finds a legacy in that regard.”
The summit brought together heads of state or prime ministers from about 80 countries, including the world’s leading economies, and smaller, debt-ridden countries already suffering the effects of debt-related of climate change, such as Guinea-Bissau, Haiti and Saint-Vincent and the Grenadines.
Last week, Mr. Macron’s group reminded that the event was not aimed at concrete announcements but to ease the way for agreements in later gatherings, especially the World Bank and IMF annual meetings, the G20 summit, the next United Nations Climate Change Conference. and the general meeting for the International Maritime Organization, which is under pressure to tax emissions from the shipping industry.
“If that gets a lot of support here, and then actually agreed at the IMO summit in July, that would be great,” said Mr. Boese. “Three years ago, we would have celebrated a climate conference for an outcome like that.”
Many of the activists pouring into the city said they were happy to see more seats at the table for leaders from the global south, and President Macron used his powerful office to boost the proposal to a woman of color from a small island nation – Ms. Mottley. But they lobbied for more controversial issues to be put on the agenda, particularly taxes on the fossil fuel industry, as well as the super-rich leading jet-set lives.
“Climate finance is good, but if we don’t stop the fossil fuel industry, then it’s just a Band-Aid solution,” said Mitzi Jonelle Tan, a climate justice campaigner from the Philippines, a country which is often battered by storms. “I grew up afraid of drowning in my own room.”
Patience Nabukalu hails from Uganda, where the French oil company TotalEnergies is financing oil wells and the 870-mile East African Crude Oil Pipeline. The project is considered a “carbon bomb” by its opponents and a potential threat to the drinking water of the 40 million people who live around the basin of Lake Victoria. The Macron government has quietly supported the project.
“Let him prove us wrong in thinking that these are empty promises, but show that they are true by progressing and calling to stop this project,” said Ms. Nabukalu, 25. “There will be no financial reform if you continue to finance fossil fuel projects.”
Aurelien Breeden and Juliette Gueron-Gabrielle contributed reporting.