V20 and G7 jointly launch Global Shield
The Vulnerable 20 Group of Finance Ministers (V20) of 58 climate vulnerable economies and the Group of Seven (G7) have officially launched the Global Shield against Climate Risks, an initiative for pre-arranged financial support designed to be quickly deployed in times of climate disasters. Initial contributions include around €170 million from Germany and more than €40 million from other countries.
In addition, a broad coalition of countries, multilateral institutions, non-state and private sector partners has underlined their full institutional commitment to Global Shield.
The first recipients of Global Shield packages–called Pathfinder countries–include Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal.
Ghana finance minister and V20 Chair, Ken Ofori-Atta, said: “The Global Shield is long overdue. It has never been a question of who pays for loss and damage because we are paying for it–our economies pay for it in lost growth prospects, our enterprises pay for it in business disruption, and our communities pay for it in lives and livelihoods lost. We really hope the Global Shield will not only yield impact for the most vulnerable communities, but that it will also contribute to building mutual trust and understanding to help bridge the resourcing gaps facing climate action.”
Recent V20 research found that 98% of the nearly 1.5 billion people in V20 countries do not have financial protection–a massive sinkhole for these countries whose workforce is mainly employed by small and medium enterprises. According to this research, V20 countries have lost a total of $525 billion to climate impacts since 2000. As risks of losses and damages from climate change escalate further, the cost of capital and debt have risen to unsustainable levels, especially across climate vulnerable economies.
The Global Shield will start its implementation immediately after COP27. The V20 and G7 have decided that it will be steered by the Global Shield High-Level Consultative Group, which includes representatives of the V20, G7, G20, think tanks, civil society, multilateral organisations and the private sector. A financing structure with three complementary funds forms the foundation of the Shield: the Global Shield Solutions Platform, which builds on InsuResilience Solutions Fund, the Global Shield Financing Facility at the World Bank, and the Climate Vulnerable Forum & V20 Joint Multi-Donor Fund.