ED lecture

It is an honor to deliver the Barbara Ward Lecture this year.

Barbara was a woman ahead of her time, a visionary woman who first articulated sustainable development and its vital link to economic progress, laying the groundwork for modern environmental policies. A woman considered radical at the time, Because of ideas such as transferring wealth from developed to developing nations, alleviating poverty as a global good, and linking personal and planetary prosperity.

 To truly honor her, we need to build on the cornerstones she laid down. And that’s my personal calling and commitment.

 Most of us in this room have had moments in our lives when we realize that certain issues are much bigger than ourselves, speak to our essence as human beings, and compel us to act.

Or, as Barbara once put it, moments that “widen our understanding and solidarity”.

One such moment for me was witnessing extreme poverty in refugee camps during Angola's civil war. I saw poverty like never before—in the eyes and bodies of people, people just like us, who had done nothing to deserve their plight.

Meanwhile, just a few kilometers away, others lived in opulence.

The “haves” with materially abundant lifestyles and the “have-nots” digging through garbage to find some food.

I was a master’s student of international development doing primary research for my thesis, but this stark social injustice touched me deeply and drove me to devote my energy and skills to global development—to contribute to a world where everyone has their fundamental needs met and can realize their potential. A world where social justice is honored and acted upon.

A second decisive moment was living in Mozambique, a ‘hotspot’ for climate disasters, and experiencing firsthand the destruction of the massive floods in 2000.

I saw what numbers in reports and the media can never capture: people who lost  loved ones, homes, and livelihoods. People who were unable to access to their farms, markets, schools and health facilities.  

That triggered my interest and curiosity about the linkages between development and environmental phenomena which led me to learn about the science, policy, and economics of climate change.

That pull has remained with me ever since.

I have never looked back. I have focused my professional career on working at the intersection of development, social inclusion and climate change.

I suspect many of you here today share similar experiences and resolve, which is why it’s an honor to be here today.

So where are we today in terms of development and wealth distribution?

• We have seen remarkable reductions in poverty: the number of people living in extreme poverty fell by more than 1 billion from 1990 to 2015; from 1.9 billion to 0.74 billion.
• We have also seen impressive improvements in average life expectancy which has increased from around 35 years post World War II to more than 70 years today; in infant mortality (around 40% in 1900 to less than 4% today); in literacy rates (share of adults with basic skills to read and write); women’s rights to vote; or in cereal yield (a thousand kg per hectare).
• Yet, over 2 billion people are still poor or near-poor, facing persistent threats to their livelihoods.
• Roughly the same number of people lack access to safe drinking water services, and more than 750 million people have no basic drinking-water service at all.
• More than 1.3 billion people live on deteriorating agricultural land, putting them at risk of depleted harvests that can lead to worsening hunger, poverty and displacement.
• Around 760 million people live without electricity, mostly concentrated in rural areas of Africa and South Asia.
• 19.5% of the world’s children (387 million) live in extreme poverty according to UNICEF.
• And speaking about wealth distribution, according to Oxfam, the world’s richest 1% have more than twice as much wealth as almost 7 billion people.
• More than a third of low-income countries have experienced declining wealth per capita since 1995.

And where are we in terms of climate change?

• The amount of CO2 in the atmosphere reached 417 parts per million in May 2020. The last time CO2 levels exceeded 400 parts per million was around four million years ago, during the Pliocene era, when global temperatures were 2-4C warmer and sea levels were 10-25 metres (33-82 feet) higher than they are now.
• The IEA has predicted that with today’s policies the world is set for a 2.5C temperature increase and UNEP estimates indicate a 2.8C rise.
• So we are right there in the 2-4 C range and we have more than 650 million people around the world living in low-lying coastal areas.
• We are emitting carbon at unprecedented scale and speed. We have put 100ppm of CO2 in the atmosphere in the last 60 years which is 100 times faster than previous natural increases. (Martin Siegert, Co-director Grantham Institute, Imperial College London).
• Climate scientists say the world may unavoidably breach the 1.5C limit by 2029, rather than the mid-2030s, and in such a scenario, global emissions of carbon dioxide would have to reach net zero by 2034, not 2050 as is currently expected.

Why does this matter? Because the impacts are clear and they will get much worse.

• The adaptation crisis is already upon is. Today, disasters push 26 million people into poverty each year. And today, low and middle income countries lose some $390 billion a year when disasters knock out power and water and disrupt transport.
• A coalition of 55 of the most climate-vulnerable countries estimated they lost at least $525 billion, equal to one-fifth of their GDP since 2000, due to climate change.
• In 2022, Pakistan suffered record flooding that covered a third of the country, affecting 33 million people and causing 1,739 premature deaths, including more than 550 children. The estimated costs of the damage are above $30 billion.
• But the impacts are not just felt in low and middle-income countries, even if they are being disproportionally hit. According to the National Oceanic and Atmospheric Administration, since 1980 the United States has experienced 338 weather and climate disasters causing damages in excess of $1 billion each (adjusted for inflation) for a total cost of more than $2.295 trillion.
• A total of 17.2 million people around the world are being forced from their homes by shocks like drought, hurricanes and landslides — almost 50,000 people every day.
• Let me tell you the story of a young men I met in Ghana – Kenneth.

As if these impacts weren’t already enough, over the past 5 years we have lived through 2 additional major shocks: the COVID-19 pandemic and Russia’s invasion of Ukraine.

• The unsustainable exploitation of nature, driving devastating biodiversity loss, deforestation and climate change, has created conditions that can accelerate the emergence of new viruses and diseases.
• In fact 60% of known infectious diseases and 75% of emerging infectious diseases are zoonotic. Over the last two decades and before COVID-19, zoonotic diseases caused economic damage of USD 100 billion.
• The drivers of climate change are also drivers of the pandemics, and both constrain capacity of governments to respond and invest in development and climate action, further exacerbating the impacts of not responding to either.
• Russian’s invasion of Ukraine triggered severe price shocks in food, energy and fertilizer markets, causing a global cost-of-living crisis and ultimately a debt crisis.
• But climate extremes were among the compounding factors for food shortages in the immediate aftermath of the war in Ukraine, pushing 57 million people into acute food insecurity and creating a ripple effect felt in food prices across the globe. (WFP 2023).
• Between 2020-2023 alone, the compounding crises of COVID, the Ukraine war, and escalating cost of living saw 165 million people fall into poverty (UNDP). For the first time in decades, we saw a historic reversal in development (World Bank, 2024).

Let me come back to the debt situation caused by the compounding crisis of COVID and the Ukraine war. This year, the average low-income country will:

• Experience inflation of over 8% (IMF 2024).
• Spend over twice as much on debt servicing as they do on social assistance.
• The average total debt burdens among low- and middle-income countries increased by roughly 9 percentage points of GDP during the first year of the pandemic, 2019–20, compared with an average increase of 1.9 percentage points over the previous decade.
• But it is not just the quantity of debt that is disproportionately impacting these countries. It is the terms under which they are forced to borrow.
• As the prime minister of Antigua and Barbuda, Gaston Browne, asked the UN General Assembly following Hurricane Irma, which devastated his country: “Where is the justice in large wealthy countries borrowing on their capital markets at 3 per cent, while so-called ‘high-income’ small island States are forced to borrow commercially at 12%?”
• This is not a one-off episode. It’s structural. On average, developed countries spend 3.5% of their revenues on interest on their debt, versus 14% of revenue in the least developed countries.
• The world’s most climate vulnerable countries are spending more paying off their debts than they are receiving in climate finance (IIED, 2023).
• And these debt burdens are constraining countries from investing in essential measures such as climate resilience and the transition to low-carbon economies.

More than 50 years ago Barbara Ward argued that we needed to tackle poverty and environmental disasters hand-in-hand, through the transfer of wealth from the richer world to the poorer.

“How,” she asked, “can we speak to those who live in villages and slums about keeping the oceans, the rivers and the air clean when their own lives are contaminated at the source?”

I would add this: while national sovereignty may provide rights of self-determination for nations to pursue their own paths, we cannot sever the threads that bind us on a fundamentally human level.

The idea that one person, one community, one nation, living in deprived, poor, and hopeless conditions is isolated from those in affluent countries is an affront to our own humanity.

It's also an affront to the basic understanding that climate change is borderless. We ignore our unity at our collective peril.

Low and middle-income economies are on track to run on 70% of the world’s energy supply, and represent 60% of total GDP.

The world needs to invest $90 trillion by 2030 in sustainable urban, energy, transport, water and other infrastructure assets. 2/3 of these investments will happen in middle and low-income countries.

For our collective good, we need to make sure that low and middle-income countries avoid lock-in and can leapfrog high-carbon infrastructure. Without support for sustainable development, these nations are likely to follow the high-emission pathways of their predecessors, perpetuating the climate crisis – for all people.

And as Barbara rightly said: we need to think about solutions that are all-encompassing; that reflect the connections between observed impacts at micro level with the structural and macro levels.

The recent compounding crises led to the first reversal in development in decades and a massive debt crisis that once again jeopardizes the development and climate aspirations of low and middle-income countries. And the response to these crises brought to light once again the structural problems in our economic and financial systems.

A system of economic growth delivering for few, founded on ecological destruction and persistent social injustice is no foundation for human well-being and prosperity. Prosperity that needs to consider both intra-generational and inter-generational dimensions.

An economic system primarily anchored on a metric – GDP – that fails to reflect the real welfare losses from deep and increasing income inequality; to adjust for the depletion of natural capital; to capture the external costs of pollution and long-term environmental damage; to account for the costs of crime; to account for non-market services such as domestic labor and voluntary care; to correct for defensive expenditures. Human society is an integrated whole. It consists of much more than the economic activity measured by GDP.

Or a financial system that systematically disadvantages low- and middle -income countries by moving investments away from them.

And once again key metrics we use in the finance world such as the ESG system  was designed for the high-income world and fails to accurately and fairly represent the rest of the world.

A World Bank study found that sovereign ESG scores suffer from ingrained income bias. Although these scores were designed to measure a country’s sustainability, they are 90% explained by the country’s level of development. And since investors use these ESG scores to make their investment allocations, this approach often results in a reduction of portfolio allocation or complete exclusion of countries with low ESG scores.

Breaking the debt cycle, responding to climate change and meeting our shared development goals require a transformative socio-economic shift – unprecedented in scope and scale.

The current system no longer meets the demands of 2024, and caters, frankly, primarily to the interests of a few.

Throughout 2023, leaders and institutions have acknowledged that the financial system isn’t fit for purpose. Yet, much like our efforts against climate change – it’s not happening fast enough.

What We need is a 'solidarity pact' between high income and low and middle income countries—a financing package historic in scope and scale, akin to a Marshall Plan.

A pact that offers robust support to countries battling the twin crises of climate change and debt.

A pact that respects the sovereignty of nations and their right to make their own decisions so that they are responsive and accountable to their own people while responding to our global common responsibility to keep temperature increases to below 1.5C.

A pact that recognizes – in its very financing structure – that those least responsible for the climate crisis should bear the least of its debt…

…and that when countries are trapped in poverty, food insecurity and ecological degradation, they need more fit-for-purpose finance terms.

A pact that replaces the heavy chains of high-interest loans with a blend of grants and concessional finance.

A pact ensuring that international financial institutions work together effectively and as a system.

A pact where the private and public sectors work in tandem to ensure that the transition to a low-carbon economy is both affordable and equitable.

A pact that deliberately supports social businesses – the form of enterprise based on human virtue of selflessness – and entrepreneurs  as championed and supported by Muhammad Yunus.  

A pact that recognizes that increasing wealth concentration is dangerous because it threatens human progress, social cohesion, human rights and democracy. And that recognizes that the growing wealth gap deepens mistrust, resentment and anger pushing the world toward social upheaval and increasing the likelihood of conflicts within and among nations.

Countries mobilized significant stimulus packages and the combined power of the public and private sectors to develop and deploy vaccines with historic speed during the recent COVID19 pandemic.

Countries also mobilized significant resources to respond to Russia’s invasion of Ukraine.

But we haven’t been able to respond in a commensurate way to the fiscal and debt burden faced by low- and middle-income countries. That burden means that, increasingly, that these countries are having to scale back on health and education provision and cannot invest to protect their populations from the impacts of the climate crisis.

The lack of the necessary scale in international solidarity has been pervasive for decades and it has decreased trust between developed and developing countries, driven polarization and protectionism throughout the world and is undermining multilateral institutions.

We cannot allow that to continue.

Failure by nations to achieve on time the previous goal of mobilizing $100 billion annually for climate investments in low and middle income countries – a tiny figure compared to what is actually needed – begs the question: if it was already so difficult to mobilize $100 billion how will the international community be able to mobilize even more?

It’s not for lack of ideas or opportunities.

Many experts and high level panels have made several suggestions and estimated the impact of such recommendations:

1. From taxes on financial transactions
2. To taxes on fossil fuels; the super-rich
3. Taxes on air transport
4. To phasing out fossil fuel subsidies

What we need is the determination, political will and public support.

As the Prime Minister of Barbados Mia Motley as stated “We must act with unprecedented urgency. We have the solutions – from levies on heavy emitting sectors to innovative financing mechanisms. What we need more than ever is the courage to implement them for global prosperity. The time for bold action is NOW. We must work together to forge a future where economic justice and environmental sustainability are not mere goals but realities for our people.’

I have seen myself the power of solidarity at the two large multilateral climate funds I have had the privilege to lead for a decade now.

Boldness from more affluent economies that made available several billion dollars of concessional finance – the scarcest and most vital source of financing—has empowered champions in government, private sector, and civil society to make bold investment decisions themselves.

We have on our side important levers that we should pull:

• When confronting a threat to their health or well-being, citizens will press for change. In fact we have barely harnessed the linkages between climate change and health to propel people to act and demand action from others.
• Abundant Data for Decision Making: New sensing technology such as satellite imaging, drone mapping, and ocean sensors provide a view of our planet at extraordinary resolution. This ability to track consumption, production, and weather patterns at new scales are making previously invisible impacts of climate change visible and enabling enhanced decision making.
• New Authorities, New Power Dynamics: Old power, held by a few and jealously guarded, closed, inaccessible, and leader-driven, is giving way to new power, which is made by the many – power that is open, participatory, and peer-driven. This new power dynamic creates opportunities for climate action at all levels—local, global and institutional and we should empower them.
• Technologies of Decentralization such as blockchain and crowdsourcing—that cut out unnecessary middlemen and empower new networks also offer important opportunities. Blockchain is being used for “smart” peer-to-peer and peer-to-market contracts, and will fuel new experiments in secure identity, distributed ownership, and financial transactions. These tools push us to rethink scale, enable investment and insurance for more local, less mainstream climate projects.
  • For example, a peer-to-peer solar microgrid in Bangladesh called ME SOLshare lets citizens independently generate solar PV power and then buy and sell it to one another using plug-and-play blockchain-powered electricity meters.
  • Blockchain Climate Risk Crop Insurance is a digital platform wherein crop insurance policies are plugged into smart contracts on a blockchain and indexed to local weather. During an extreme weather event, the policies are automatically triggered, which facilitates fair, transparent and timely payouts.
• Climate growth: the compelling business case for climate action. Think about this: wind turbine service technicians and solar photovoltaic installers are the fastest-growing jobs in the United States. China now has 35% more people working in clean energy than in oil and gas. Corporations that actively manage and plan for climate change secure an 18% higher return on investment than companies that don’t — and 67% higher than companies that refuse to disclose their emissions.
• Empowering women: we already know that women’s economic empowerment benefits communities, businesses and economies. But we also know communities and frameworks that tap into the organizing ability and knowledge capital of women will succeed better at climate action efforts than those that continue the status quo of under-representation. Women are critical agents of change and that is what we need.
• Empowering youth: 42% of the global population is under 25. Youth movements have been at the heart of some of the most earth-shattering global change over the last century, and in the age of viral communications and mobile phone culture, young people are taking to the Internet and social media at greater and greater speeds to build new movements and enact social change.

By tapping into these levers with the appropriate quantum of finance as well as quality in the delivery of this finance through

• improved agility and simplification of access,
• a shift from a from a do-it-alone approach to co-creation of investment opportunities bringing the public sector, private sector and development finance institutions together.
• empowering the private sector and
• a focus on the poor and most vulnerable

We can rise to the historic moment in front of us.

This is precisely the vision I laid out for the Green Climate Fund shortly after becoming its new Executive Director in August last year. And that is precisely the reform agenda we are implementing.

The socio-economic transitions required to meet our development goals and respond to the climate crisis are unprecedented and we can only deliver with social justice at the heart and core of what we do.

But this will also help us realize that a life of shared prosperity, a life of connection to our communities and broader humanity is the one that actually brings us purpose, fulfillment and happiness.

A prosperous world is a world where human beings can flourish; achieve greater social cohesion, find higher levels of well-being and still reduce their material impact on the environment.

Our future doesn’t depend primarily on governments or powerful corporations. It depends on our agency because our decisions matter: how we educate our children; how we treat others; how we consume; produce; invest; and vote. They all matter and they matter a lot.

So let us move from fear, uncertainty, and doubt into the realm of opportunity, possibility and meaning. Let us galvanize and inspire each other.

Because, if there is anything Barbara Ward has taught us is that what was previously unthinkable can quickly become reality.

Thank you.