 Mia Mottley addresses the U.N. General Assembly. REUTERS/Mike SegarTHE NEWS Scale up and speed up: That’s the motto for reshaping the global financial architecture to deliver the funds developing economies need to transition. Few organizations symbolize this more right now than the U.N.’s flagship climate fund. Mafalda Duarte, Executive Director of the Green Climate Fund, recently unveiled a vision to triple its capitalization to $50 billion by 2030, while promising reforms and partnerships with multilateral development banks and private actors to get more dollars to carbon-cutting and adaptation projects in vulnerable countries. Her ambition comes amid growing discussions over whether the existing international financial system is sufficiently able to respond to the climate crisis. Critics variously call for reform — Barbados Prime Minister Mia Mottley’s blueprint to refashion finance is gaining traction — or replacement: Countries like Kenya and the UAE are setting their sights on creating entirely new institutions to channel the funding needed to green economies. “There is movement. The question is can we get that movement to be bigger and faster,” said Rachel Kyte, dean of the Fletcher School of Law and Diplomacy at Tufts University. CHLOÉ’S VIEW Developing countries need cheap, long-term, and easily accessible financing to decarbonize and develop their economies. Duarte gets it. But her efforts, and those of the GCF, won’t be enough on their own — not by a long shot. The GCF is the world’s largest dedicated climate fund, a pillar of the grand bargain between rich and poorer nations which underpins the 2015 Paris Agreement: Developing countries agreed to cut emissions in exchange for financial support from their wealthier peers. The replenishment of the GCF is critical for vulnerable nations to access affordable funding for climate investments, and Duarte is seeking fresh contributions at a pledging conference next week. On its own, however, the GCF is too small to move the needle. Duarte acknowledged last week in remarks to the U.N. that even $50 billion was “a drop in the bucket” when compared to the additional climate finance needs of developing and emerging economies other than China, estimated at around $1.8 trillion a year by 2030. But the GCF stands out for its ability to focus on the most vulnerable, and take more risks than most investors because it doesn’t have to worry about credit ratings. To scale financial flows, the GCF will “double down on mobilizing domestic private capital,” Duarte told CSIS, a Washington-based think-tank, on Monday. Yet still more is required, and Duarte’s is one of multiple efforts aiming to bolster funding for developing nations. The Bridgetown Agenda — a blueprint for reforming the financial system championed by Mottley — is the most advanced diplomatic initiative responding to that scaling challenge. It calls on multilateral development banks to triple their lending from $100 billion a year currently to $300 billion, urges the banks’ shareholders to increase their capitalization, and demands developed countries rechannel about $130 billion of International Monetary Fund financing as additional lending for vulnerable nations. A group of countries recently agreed to increase multilateral development bank lending by an extra $20 billion annually by optimizing the banks’ balance sheets. But Mottley warned leaders last week the ambition shouldn’t be below $100 billion. An influential recent report for the G20 concluded that the MDBs could increase their lending by “several hundreds of billions of dollars over the medium term” if they followed a series of recommendations, including on risk tolerance. The issue is poised to be a major talking point at World Bank and International Monetary Fund meetings next month in Marrakech, where Barbados and its allies will “push for higher numbers,” Avinash Persaud, Mottley’s special envoy on investments, told me. Other efforts are underway, too. There are calls on multilateral development banks to loosen their insistence on maintaining AAA ratings and increase lending; momentum is building behind debt-for-climate swaps, which can free up capital for heavily indebted nations; while the World Bank is increasing its lending capacity by loosening its equity-to-lending ratio to take on a bit more risk. Developing countries’ climate and development finance needs are acute and growing. But ideas for financing mitigation and adaptation efforts are on the table. The question remains whether they can be seriously implemented. | 
