Philippines leads climate-vulnerable countries in crafting action plan

MANILA, Philippines - The Philippines led 19 other countries in agreeing to a high-level initiative that lays out financial means to combat climate change, which strips their vulnerable economies by more than $40 billion a year on top of tens of thousands of fatalities.

The Vulnerable 20 (V20) Group, led by Finance Secretary Cesar Purisima, on Thursday concluded their inaugural meetings in Lima, Peru with the approval of an action plan to tackle changing climate for the next five years.

"We are united in our shared vulnerability and exposure to a changing climate," the V20 said on its communique issued after the meetings.

"We, the V20, commit to act collectively and decisively to promote the mobilization of public and private climate finance from wide ranging sources, including international, regional and domestic mobilization," the group said.

In a major first step, the V20 agreed to set up climate risk pooling mechanism, where both governments and the private sector would contribute and provide insurance mechanisms to absorb the impact of natural calamities.

The pool, among others, would work as a shared facility where risks are distributed across member-countries. In such a way, the fund could get activated once a disaster hits a particular V20 member.

Risk-adaptation measures will also be a key component of the fund, where contributions will be based on "risk-determined pricing" and "index-based" risk transfers.

Since state revenues need to be available upon disposal, the V20 group also expressed support to "innovative" revenue generation methods, including the imposition of financial transaction tax.

"The same can generate additional resources sourced from capital markets, while serving as a stabilizing financial measure," the group explained.

Finally, the group also advocated for revisions on globally-accepted financial accounting models to include climate change costs and effects. They said both the public and private sectors should ensure funds are available for mobilization.

According to estimates provided, the V20 states suffer an average of 50,000 deaths every year to climate hazards. Financial losses account for about 2.5 percent of economic output or about $45 billion. Both figures could rise in 20 years.

"Given this and the extent to which climate change has set back the lives of our people, denied human rights, and devastated our homes and entire nations, we recognize climate action as a foremost humanitarian priority for the international community," the group said.

The V20 is chaired by the Philippines with the following members: Afghanistan, Bangladesh, Barbados, Bhutan, Costa Rica, Ethiopia, Ghana, Kenya, Kiribati, Madagascar, Maldives, Nepal, Rwanda, Saint Lucia, Timor-Leste, Tuvalu, Vanuatu and Vietnam.

The inaugural meeting was held in conjunction with the annual gathering of the World Bank and the International Monetary Fund, whose representatives also took part in the negotiations.

"We look for a new international partnership with development partners, business and public-private arrangements to support the realization of V20 ambitions," the group said.