Wealthy democracies are increasingly committed to helping the global South fight climate change. Although it will be difficult for them to sign large checks, there are ways to count even small cash. One of the things that shocked America and its allies in the Ukraine conflict was how few developing countries have joined them in imposing sanctions on Russia. It is one thing for wealthy democracies to confront Russia without allies in the global South, and quite another to do so in, say, China, which has an economy ten times its size. This is the main reason, along with growing concerns about climate change, why the major industrialized countries of the G7 are promoting a green alternative to China’s (modern) Silk Road initiative, which aims to help poor countries develop. It has already signed three “Partnerships for a Fair Energy Transition” with South Africa, Indonesia and Vietnam.

Discussions are ongoing on how to help India accelerate its transition to a green economy. There is also talk of promoting something similar in Brazil, which now has an environmentally conscious president. However, there is one obstacle, namely that it will cost about 1 trillion. dollars a year to finance green development in the global South. Meanwhile, they have yet to keep their old promise of pumping $100 billion a year into developing countries. Achieving this should be a priority, says Charles Ogilvy, former director of strategy for the United Nations climate conference in Glasgow 2021. pockets. This is also a good year to step up climate finance diplomacy. This issue will be at the center of the meetings of the International Monetary Fund and the World Bank, the Financing for Development summit hosted by Barbados and France, the Indian G20 Presidency and the next UN climate conference in Dubai.

Private financial institutions, which theoretically promised 150 trillion. dollars for a global transition to zero pollution should provide the lion’s share. Increasing volumes are flowing to the global South. But the amounts are still small because the risks are high and many projects are not viable if investors have to pay a large risk premium.

The most promising solution is to use relatively small amounts of sovereign funds to absorb private capital, using instruments such as political risk guarantees. Given national budget constraints, governments must mobilize the World Bank, IMF, and other international financial institutions. The World Bank has finally prepared a roadmap on how to do this, after intense pressure from the G7 countries, its biggest shareholders.

You will also need additional money. Therefore, rich countries should invest more capital in those development banks that show the most enthusiasm for the project, such as the Asian Development Bank and the African Development Bank, if the World Bank hesitates.