The Daily - Who Pays the Bill for Climate Change?

Episode Date: December 2, 2022

Last month at COP27, the U.N. climate change conference, a yearslong campaign ended in an agreement. The rich nations of the world — the ones primarily responsible for the emissions that have caused climate change — agreed to pay into a fund to help poorer nations that bear the brunt of its effects. In the background, however, an even more meaningful plan was taking shape, led by the tiny island nation of Barbados. Guest: David Gelles, a climate correspondent for The New York Times.Background reading: As global warming delivers cascading weather disasters, leaders at U.N. climate talks said it’s time to radically overhaul the World Bank and International Monetary Fund.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. 

From The New York Times, I'm Sabrina Tavernisi, and this is The Daily. COP 27, the global gathering to combat climate change, has kicked off in Egypt. Last month, the world gathered in Sharm el-Sheikh, Egypt, for the 27th UN Conference on Climate Change, COP 27. Sharm el-Sheikh is another milestone for measurement, for accountability and for focus. And finally, after years of pushing. Elation over a landmark compensation deal. Leaders at the COP 27 climate summit in Egypt say they've reached a historic deal to help vulnerable countries.

A new fund to help developing countries cope with the impacts of climate change. The rich nations of the world, the ones most responsible for the emissions that have caused climate change, agreed to pay into a fund to help poor nations, the ones who bear the brunt of the effects of climate change. I think it's a fundamental breakthrough that the fund is now there. But in the background, an even more meaningful plan was taking shape. An initiative led by the tiny island nation of Barbados.

There could be a restructuring of the architecture of international finance, for example, which may encourage private capital to come into the battle on climate change. Today, climate reporter David Gellis on the plan that could remake the way the world of finance deals with climate change. Today, climate reporter David Gellis on the plan that could remake the way the world of finance deals with climate change. It's Friday, December 2nd. So David, from what I understand, COP, the UN Conference on Climate Change, it's kind of like the Super Bowl for climate people. But instead of rooting for their team, everyone's kind of supposed to be there to root for the world,

to save the planet. Do I have that right? Yeah, that's basically it. Tell you what, it is a beautiful day here in the Sinai Peninsula right now. So in early November, Daily producer Michael Simon-Johnson and I got ourselves

to Sharm el-Sheikh, Egypt. It's Monday morning, the first official day of COP 27. We eventually found our way to the conference area, and within a few minutes started to get our first taste of what the actual conference was going to be like. Is it this thing right here? Wow. Yeah. An enormous complex. It's just like a campus actually. The conference itself was massive. It was the size of multiple enormous convention centers strung together.

And some parts were inside, some parts were outside. There are truly like large delegations from a genuinely diverse cast of countries here. Some 44,000 people from every country in the globe had come together. And there were world leaders, there were activists, there were CEOs, there were foundational heads, there were policymakers. I absolutely love it. They just have things that say, like, adaptation and energy. This one says gender and has just a bunch of people's hands.

And in addition to all the big meeting spaces where people would gather, there were these convention halls. Wow. It's like a trade show in here. It's a trade show of the United Nations. Which is pretty weird. Where different countries had set up pavilions of sorts. Hey, this is Israel's. Where Israel, for example, was talking about how it was adapting to climate change. Where's the U.S.?

Right here. Where the U.S. is touting its new carbon credit trading program. It looks like a Delta sky lounge. No offense, guys. And next door, the country of Nigeria was explaining how it was trying to preserve its forests, for example. Spain, South Africa, Indonesia. And this went on forever. Indonesia is sort of like stylized to look like a jungle kind of.

Democratic Republic of Congo. Germany. Oh, Germany's is very nice. They have a lot of plants. Sometimes you would just see a head of state or a president or a prime minister walking by with their security detail. And the next minute, you might see an activist dressed like a polar bear. Sorry, there's a giant polar bear suit here. We have to take a picture of it.

Trying to advocate for nuclear power. So notably, it's not just a polar bear being like, fight climate change. That's basically a pro-nuclear polar bear. It was a totally bizarre scene. They're the pro-nuclear polar bear. It was a totally bizarre scene. And it was clear from the outset that one big goal of this event was going to get rich nations to agree to put tons of money into a fund to help poor countries deal with the effects of climate change.

The argument, of course, being that since the rich countries, like the United States and many nations in Europe, are the ones that primarily caused climate change, they should be the ones to pay for the effects of it. Right. Compensation. Exactly. Some people refer to this as climate reparations or loss and damages. And this idea has been contentious for a long time now. But it seemed like this year something along those lines was actually going to happen. And that, we knew, would be a big storyline for the conference. And it was. Yeah, the headlines were all about these plans for a historic climate damage fund that rich countries were going to pay into so that poor countries could adapt.

Right. And it is a really big deal. But there was also this other story we had been following. But there was also this other story we had been following. It was one that, at the end of the day, could be even more consequential than the loss and damage fund that was announced at the end of the event. And this story had everything to do with the prime minister of Barbados, Mia Motley. Mia Motley is the current prime minister of Barbados. She's the first woman to hold that office. And Barbados is this idyllic little jewel of a Caribbean island nation. It's also where I was really fortunate to be able to spend much of

the first year of the pandemic. You did? I did. Oh my God. And in the last couple of years, Prime Minister Motley has become a huge star on the world stage when it comes to climate change. We come to Glasgow with global ambition to save our people and to save our planet. Especially after a passionate speech she gave at last year's United Nations Climate Change Conference in Scotland. And in that speech, she really made a moral case, arguing that it was the responsibility of rich nations to help poor countries adapt to climate change. What must we say to our people living on the front line in the Caribbean, in Africa, in Latin America, in the Pacific?

What excuse should we give for their failure? She, of course, presides over a country that is incredibly vulnerable to the effects of climate change. Barbados is a tiny island in the Caribbean. It is in a neighborhood that is often hit with hurricanes. And Prime Minister Motley has made it her mission to speak on behalf not only of just Barbados, but of other countries like hers that are bearing the brunt of more extreme weather. that are bearing the brunt of more extreme weather.

From Egypt, the cradle of civilization, from Sinai, the blessed land, welcome to COP27. And she's become such a big star in this conversation that on the first day of COP, she was given top billing alongside other people like former Vice President Al Gore, the Secretary General of COP, she was given top billing alongside other people like former Vice President Al Gore, the Secretary General of the United Nations, the head of the African Union, people like that.

And now, please welcome with me Ms. Mia Motley, the Prime Minister of Barbados. So, Prime Minister Motley gets up. Excellencies, distinguished ladies and gentlemen. And it's in this speech that she delivers what I think is the big story to come out of COP27, and in fact is one of the biggest stories in the climate conversation right now. I come from a small island state that has high ambition, but that is not able to deliver on that high ambition because the global industrial strategy that we have has fault lines in it. Our ability to access electric cars or our ability to access batteries or photovoltaic panels are

constrained by those countries that have the dominant presence and can produce for themselves. But the Global South remains at the mercy of the Global North on these issues. It was in that speech that she really laid out her vision for how the rich nations of the world could fundamentally change the way they're approaching this problem of helping poor nations adapt to climate change. This world looks still too much like it did when it was part of an imperialistic empire.

The global north borrows between interest rates of between 1 to 4 percent. The global south of 14 percent. We believe that we have a plan. We believe that there can be the establishment of a climate mitigation trust that unlocks $5 trillion of private sector savings. We believe as well that the time has come for the introduction of natural disaster and pandemic clauses in our debt instruments. And finally, we believe that the multilateral development banks have to reform.

Yes, it is time for us to revisit Bretton Woods. Here she is specifically calling out the World Bank and the International Monetary Fund, these banking institutions that were created decades ago at this meeting called Bretton Woods and that are still central to the system that she thinks is totally failing developing countries. I ask the people of the world and not just the leaders, therefore, to hold us accountable and to ask us to act in your name to save this earth and to save the people of this earth.

Thank you. and to save the people of this earth. Thank you. So with that speech, she's really proposing a pretty gigantic reshaping of how some of the biggest global financial institutions work. Well, can you explain why what she's saying is such a big deal? So let's break it down. She mentioned Bretton Woods and the need for a new Bretton Woods. And what she's talking about was this conference that took place in the waning days of World War II.

At Bretton Woods, New Hampshire, delegates from 44 allied and associate countries arrived for the opening of the United Nations Monetary and Financial Conference. The finance ministers, for the most part, got together in Bretton Woods, New Hampshire, at the Mount Washington Hotel. They will work in the seclusion of this White Mountains resort. And tried to sketch out what an integrated, post-war global economic system might look like. The world cannot endure half skyscraper and half rubble. And so the World

Bank was set up to provide loans to mostly European countries that were trying to recover from the war because this war had devastated nations around the globe. To be discussed are plans for the stabilization of world currencies. And then the IMF was created to help stabilize currencies and economies and make sure that sovereign states wouldn't default and that they were going to be reliable actors on the world stage and not sort of create these shocks to the system that would have unintended consequences that could throw the whole global economic system into turmoil. And to create a foundation for lasting peace. So by the 1970s, most of the countries wrecked by the war were mostly back on their feet,

but in an increasingly globalized world, the World Bank really shifted its approach. Last week, help came in the form of an $85 million loan from the World Bank. There were all of these other countries that were trying to get out of poverty. Since 1980, it's almost tripled the amount of money it loans to economically troubled countries like Ethiopia. In Africa, in Asia, in South America, the World Bank started making loans to those countries

with the express intent of trying to create new economic opportunities that would help people get out of poverty and into the middle class. The deal worked. In a generation, says the World Bank, China lifted $500 million out of poverty. China lifted $500 million out of poverty. And that's more or less where things stand today. But what Prime Minister Motley is saying now is that these institutions just aren't working anymore. The World Bank and the IMF, which were set up to help rebuild the world after the war, and then to bring countries out of poverty,

are just not equipped to deal with the particular challenges that poor countries have today when it comes to things like climate change and the repeated devastation that comes from these droughts, floods, fires, and storms. At the end of the day, she's saying that these institutions, which were designed to help get poor countries out of poverty, are now in fact helping reinforce it. But how? Like how would they be reinforcing it? Okay, so when one of these storms, for example, hits a small country, they often need hundreds of millions of dollars or sometimes billions of dollars to recover.

And that's money that most of these countries don't just have lying around. So some countries, the poorest of the poor, they get international aid from other countries and non-governmental organizations. But most countries are forced to take out loans when these big disasters hit. But these are not the kind of investments that most traditional banks are very comfortable making. Instead, they are viewed as relatively risky investments. Risky not only because these countries are often on somewhat shaky ground financially to begin with and maybe don't have the greatest GDP, but also because these are areas where the storms are bad and getting worse. And even if they are able to successfully recover from one storm, it could only be a matter of time before

there's another disaster, creating more havoc and making it even harder for those countries to pay back that original loan. And so for that reason, the private lenders charge these huge interest rates. Yeah, not a great option for these countries. Right. And so another that reason, the private lenders charge these huge interest rates. Yeah, not a great option for these countries. Right. And so another option is to turn to the World Bank and the IMF. So how does it work borrowing from those institutions? Well, the World Bank and the IMF often actually give better rates than countries might find on the private market. But those rates can still be pretty high, and they often come with strings attached.

What's that mean? That means when a country takes on one of these big loans, they have to promise to tighten their belts, basically. And often what happens to accommodate that is governments cut spending on things like schools, hospitals, police. But why? Like, why are they making that demand? Because in this system of international finance and debt,

the institutions that lend the money put a premium on getting repaid, even if they're lending money for the recovery of a storm. Once that money goes out the door, their first, second, and third concern is making sure that the countries they lend it to are going to be capable of paying it back one day. And sometimes that means making the countries that accepted that money restrict the ways in which they can spend the money that they do have. What does all of that mean practically for a country like Barbados? So what it means is countries like Barbados are stuck in this cycle of debt and disaster.

Storms come with increasing intensity and frequency. They borrow money, but then have more and more debt that they have to repay. And they're stuck paying back debt, trying to recover from one storm, and never having the opportunity to prepare for the next storm, let alone grow their economies in all the ways that are going to make life better for their population. Got it. So a country takes on all this debt after a storm, barely gets back on their feet before another storm hits, and never really is able to invest in becoming resilient against these storms, nor are they able to invest in their economies

because they have to pay back all these loans first. So that's what you mean when you say the cycle of debt and disaster. That's right. And that's what Mia Motley's talking about when she's saying this whole system is keeping developing countries down. Exactly.

Okay. So how is she proposing to fix this? Right. So they made a plan, and it's the one she was talking about at COP and it's called the Bridgetown Initiative, named after the capital of Barbados, Bridgetown. And it's basically three things. Okay. Number one, they want to make a lot more money available. They say that these institutions could be lending substantially more money, and they want to make a series of technical changes that would essentially unlock a lot of the money that they say is already there

but sitting on the sidelines, not only for disaster response, but for preparedness work, for helping countries become more resilient. And for example, strengthen a hospital and make sure it's ready for the next big storm that comes bearing down on a little island. The next thing they want to do is change some of the terms around how this debt is issued. how this debt is issued. Namely, they want to ensure that when a disaster hits,

countries aren't expected to keep servicing that debt when they need to be taking care of people who are out on the street because they just lost their home. So this idea of a hurricane cause or a natural disaster cause would fundamentally sort of make it easier for countries that did assume this debt to be able to pay it back. Right. And the third big thing they want to do is to use money that they say is already there in these systems to effectively seed a new trust that would leverage private sector money. seed a new trust that would leverage private sector money. The idea is that this big new pot of private money, which could be trillions of dollars, would fund things like renewable energy projects in poor countries and help them wean themselves off fossil fuels. Okay, so they're not asking to, say, you know, do away with the World Bank and the IMF. What they're saying is these institutions need to be tweaked, but need to be tweaked pretty substantially. And they need to make more money available. They need to, when they do make the money available, make it much guarantor sort of security deposit to all of this bigger, much more substantial private investment.

And that would unlock all of this additional new money for them to be able to protect themselves with. That's right. They're not saying abolish the World Bank and the IMF. They're not saying abolish the World Bank and the IMF. They're saying rich nations to give away trillions of dollars every year to clean up disasters caused by climate change in other parts of the world. It's capitalism. And it's because of that that a lot of people say that this thing could not only work, but be way more impactful than climate reparations. but be way more impactful than climate reparations. And the reason the Bridgetown Initiative is this way,

the reason it diverges from this long-standing strategy of asking rich countries for climate reparations, is largely because of the main architect behind it, a man named Avinash Prasad. We'll be right back. So what do we need to know about Avinash Prasad, the guy who's behind the Bridgetown Initiative? Well, there's actually sort of a remarkable backstory that explains how he's in the middle of this thing. Avi. Hi. How are you? I'm good. How are you? So Avinash Prasad, some people call him Avi,

is a man who worked at the highest levels of finance in London, but is actually from Barbados. Well, I was born in Barbados. I didn't have family there. My parents moved to Barbados. They had been living in Guyana. He goes to the very prestigious London School of Economics. And I'm at LSC, age 18. Where he happens to meet a fellow Barbadian, a woman named Mia Motley.

Even back then, Mia was holding court. They start hanging out in the same social circles at the London School of Economics. My girlfriend invites me around to this home in Golders Green. Mia was in this student flat in Golders Green, lying on a sort of sofa with the remote control in her hand and a cigarette in the other, zapping through channels and just talking away to everyone. And I'm sort of slightly enthralled by this person

because she was like a queen, even at age 18. And people would come and pay homage. You know, it was like a court visit. But after school, their paths diverge. Mia Motley goes back to Barbados. She's from a political family there and starts rising through the ranks of politics. In 1994, she becomes the youngest Barbadian ever to be elected to Parliament. Meanwhile, Avi goes on to have what becomes a rather extraordinary career in finance,

working for J.P. Morgan, State Street, and really rising to the heights of international finance. And eventually, Mia persuades Avi to come back to Barbados, where she could really use his help. He knows his way around international economics and that's a valuable skill set that she wants to draw upon. Until around 2007

he packs up his family and moves back. And from 2007 I write every budget she does and every budget reply. And so Avi is working with Motley now. And then in 2017, a pair of devastating hurricanes hits the Caribbean. So in 2017, we had the worst hurricane season in the Caribbean.

Two hurricane category five. It wipes out Dominica. And one of the hardest hit places was the neighboring island of Dominica. I get a call from Amir. Amir says, you've got to go and help them. And Amir asks Avi to go over there and see how he can help. And I realized Dominica, tiny country, the world will forget Dominica in five days. How do I stop them forgetting Dominica in five days? I'm thinking, you know, within a few weeks,

there'll be a bad train crash in Pakistan. No one will remember Dominica. And Avi came away from that resolved to try to figure out what he could do to make countries like Dominica and also Barbados better prepared to weather these disasters, to deal with the effects of terrible storms, even after the eyes of the world had moved on.

So Avi realizes that whatever plan he comes up with needs to have two important features. Number one, he can't just be asking for handouts, charity from rich countries to get out of this cycle. Because the Caribbean loves to beg, but it's become a default position. We're in a terrible place. We're in a front line.

You need to help us because you caused this. You need to help us. And you know what? It hits you, but no one follows that up. What they will do is they will send some scraps. And he doesn't want Mia Motley to be in a position of asking for those scraps. You've had a number of people doing motor things, but the difference is they never had a solution. Their story was, whoa, me, this is terrible. You need to do something about it. And the world does not take to begging. And he doesn't even think that this approach works to solve the problem at all.

SIDS are small island development states. So the minute you say to people that I represent a small island development state, what the other people do is they pick you up in their head and they put you in the box of irrelevancy because small island developing states, all that tells them if you speak to America and you say, I'm a small island development state, America is already looking past your head as who am I going to speak to to next because this person is irrelevant to me. He actually had to think bigger. And the way I tried to bring it home to people in Caribbean islands is I say, you add up the population of all the SIDS in the world, you get to less than 1% of the world's

population. The world is not going to change its international financial architecture for 1% of the population. So I created a new coalition. And the phrase, the front line, was something I introduced about two years ago. He needed to think about a broader plan that would be applicable and relevant to countries all over the world that are suffering from similar disasters. and relevant to countries all over the world that are suffering from similar disasters. Basically, he sees the entire tropics as the front lines of the climate crisis today. And we say the front line is between the tropics of cancer and Capricorn. And what I'm doing there is saying, I'm not 1% of the world's population. I'm 3.3 billion people.

3.3 billion people, 40% of the world's population, are all in the same band together. And now Mia is fighting not for one tiny island, 14 miles by 22 with 300,000 people in it, but for 3.3 billion people. And so it's with those two big ideas in mind, not just asking for money and not making it just about tiny island nations, that he helps develop what becomes the Bridgetown Initiative. Interesting. So he's basically saying you can't just ask rich countries to pay out tons of money to tiny poor countries, even if it's true that they were the ones that caused climate change for the most part, that that is just a losing strategy. Right. So in this plan, he's figuring out a way to use the regular system of banking, loans,

not charity. And he's making this about a significantly bigger part of the world in a way that rich countries really can't ignore. That's right. And to actually get the specifics of this plan down on paper, Avinash called together a meeting this past summer in Bridgetown with senior economists, senior foundation leaders, senior leaders from the United Nations, himself and Prime Minister Motley, and actually hashed it out. Okay, so who do they need to convince to make this happen?

Well, you might think the people you'd need to convince are the heads of these institutions, people like David Malpass, the president of the World Bank. And David Malpass has actually been in the news quite a lot over the last several months, in large part because of an interview I did with him in September. In that interview, I asked him if he believed in the basic facts of climate science. And his response was, I'm not a scientist.

Uh-oh. Yeah. So it would be good to get him on board. But the truth is, the people who actually matter more here are the shareholders of the World Bank. The United States, Japan, China, Germany, the United Kingdom, France. These are the key shareholders of the World Bank. And ultimately, if these big fundamental reforms are going to be undertaken, those are the countries that need to be convinced. And so that's why Prime Minister Motley was at

COP27 with all of those countries gathered there, trying to convince the people who matter to undertake this big systemic reform. So how does it go? She thought we were going to be out of there before. It's one o'clock now, and there's like 36 presidents that have to speak. Jeez. So on that first day of COP27, she gave that big speech where she makes her pitch to the world.

But even then, as we heard it, it was unclear how it was being received by other world leaders. I lost where they went. I mean, I suspect they may have just hightailed it for the exit. We don't know how she was feeling about it or what was going on on the sidelines or behind the scenes. So we were desperately trying to get to her and Avi, and we spent a good amount of time trying to track them down. Japan, South Africa, India, Qatar, Korea, Canada. And so we raced across this enormous, sprawling network of conference centers to see if we could catch up with her there.

Scotland. There's Scotland. Hey, there we go. Okay, we are at the Scottish Pavilion, where Mia Motley is going to speak with a couple of other people in about 20 minutes. And so we finally caught up with her at the Scottish Pavilion. Thank you, Mariana. And we got seats in the front row.

She's there on this super high-powered panel, and she's explaining more about what she's envisioning with the Bridgetown Initiative. And we're kind of anxiously sitting there, hoping we'll be able to get to her afterward to ask her how this is all going. Our vision does not have a written return to the brain. It was a mob scene with people trying to corner her

and take pictures with her and talk to her and hand her her business cards. It is an absolute scrum right now as everyone tries to take a picture of this quite high-profile panel of women we just heard. And we were initially sort of getting jostled around, but ultimately we secured ourselves right next to her and Avi, and were able to walk with them as they went to their next appointment

and finally got the chance to actually speak with Prime Minister Motley one-on-one. Hi, Prime Minister Motley. David Gettys with The New York Times. How are you? Not bad. I was a stamper. I was there for-one. Hi, Prime Minister Motley. David Gavis with The New York Times. How are you? Not bad, Eric. I was a stamper. I was there for the pandemic. Yeah, in Barbados. Indeed, yeah. So very, very much appreciated.

So when are you coming back? We've already been back. Yeah, yeah, but when are you coming back to live? As soon as I can. I asked Prime Minister Motley how she felt like her message was being received. Is this something you feel is finally gaining traction? I think so. I think we're quietly confident. We're certainly getting a lot of positive feedback. how she felt like her message was being received. Is this something you feel is finally gaining traction?

I think so. I think we're quietly confident. We're certainly getting a lot of positive feedback and we'll continue to do the engagements that are necessary. Are the challenges active resistance or something more like passivity and apathy? No, I wouldn't say active resistance. I think we're just trying to get as many people as possible and to really see what potentially could be the obstacles because a lot of what we're putting there is so basic,

I'm sorry to say, and so full of common sense that for them to be rejected at this point doesn't make sense when the opposite or the consequences of rejecting it will in fact be loss of lives and loss of livelihoods. I mean, the world can't be in this polycrisis moment and we not find a way to be able to finance our way out of it. We're not asking for money to do things that are, you know, trivial. We're asking for money to be able to ensure that we can recover from climate crisis, that we can build resilience for climate crisis, that we can better prepare for the next pandemic, that we can invest in education and health. Those of us who are the victims of the climate crisis

cannot continue to crowd out all of the space we have on our balance sheet just to prepare for something that we didn't cause. Thank you, Prime Minister. Thank you very much. And of course, there at Prime Minister Motley's side was Avi. Avi, may we walk and talk with you, just on your way? Okay, yeah. How do you feel like the message has been received?

Do you feel like the right people are hearing it? I think so. I think there is actually a strong potential, real potential. I think you will find people saying that never before has there been such momentum around one set of ideas. Whether that will end up, we will get to land it, whether it is the right set, but I think there's a pretty strong view that never before has there been this much consensus and momentum around one set of ideas. And I think it's a pretty strong view that never before has there been this much consensus and momentum around one set of ideas. And I think it's because we were... And he, too, seems to think that this is breaking through.

And do you think that's true, that it is breaking through? Like, are you guys feeling like it really is? Well, obviously, the hardcore climate change activists liked what they were hearing. change activists liked what they were hearing. We need to reconvene Bretton Woods and completely revamp and reform the World Bank system and make access to private capital available for developing countries. But as the week went on, we started to learn that people like French President Macron was on board, too. With the Prime Minister of Barbados, Mia Motley, whom I want to salute, the courage, the ambition... President Macron was on board too.

France is one of the top shareholders of the World Bank, so that was an endorsement that really mattered. And then we were like, wait, maybe this thing is catching on. And then on Wednesday, I ran in to the head of the IMF, and I asked her about what would be a fundamental change to her own institution. From your perspective, is there really momentum among the shareholders who are ultimately the decision makers to make the changes that will make... There is, there is. And she basically said yes. And then using it to unlock private finance on scale.

I mean, that sounds like the Bridgetown agenda. That's exactly what it is. So are you supportive of the Bridgetown agenda? Yeah, I am supportive of everything we can do. Everything we can do. And more surprisingly, even senior members of the financial sector seem to be supporting this project. We have to get these multilateral development banks,

and they're very different. Some are more aggressive, some are less aggressive, To use their capital to unleash a lot more capital. Including the chief executive of Bank of America. So Prime Minister Motley has been leading that charge. We're going to do a session a little later today with President Macron on it. But the concept's been around. It's now time for the governments, the shareholders in these institutions to change their charters and allow them to help. And the private sector will come in right behind And that kind of endorsement really matters, because those are the institutions that people hope will be putting up more of their money. And we were like, this thing actually seems to be gaining traction.

It might actually happen. And then by the end of the week, John Kerry, President Biden's special envoy for climate, says he's on board too. We absolutely need to have multilateral development bank reform. We need to do it by the next spring meeting of the banks. And if it happens, then we have something like $400-500 million that can then be used to leverage. That's real stuff. That's beginning to get done.

So MDB reform is absolutely critical. And that is a big deal. Because the United States is the biggest shareholder of the World Bank. And without the U.S. being on board, none of these reforms are going to happen. But, okay.S. being on board, none of these reforms are going to happen. But, okay, fine. You're not hearing any of them at a climate conference say that they oppose this very appealing climate plan. You know, everybody wants to agree with it, right? What about after the cameras are off and time passes and we actually get down to brass tacks? Like when the rubber hits the road,

what are people going to say? Well, so far, the real opposition seems to be inertia and bureaucracy. These are decades-old institutions that are very fixed in their ways. I have yet to find anyone, not any of the major shareholders, and not even any of the heads of the institutions themselves, coming out even any of the heads of the institutions themselves

coming out and saying that they oppose these plans. And Avi would tell you that the brilliance of this plan is that no countries have to shell out more money. So in his telling, there's not a lot of downside to any of this. But as we've talked about, there is more risk. All of these mean potentially riskier loans, and all of that makes this a potentially riskier loans. And all of that makes this a potentially really hard sell at the end of the day, even to the shareholders who say

right now that they're on board with these reforms. So we'll see. But seriously, I'm not hearing any opposition. And that means a lot. David, I feel like this is a very strange place because it feels like what you're saying is that things actually might change in a pretty big way. And honestly, this feels kind of funny because, you know, when I think of climate change, it is just this incredibly complicated, stuck problem that the world is facing and that, frankly, I don't feel that optimistic about. I hear you. But I think the reason that this plan is breaking through is that it's actually using the existing global financial system to try to address this crisis that for so long has felt so intractable. This isn't climate reparations.

It's not a loss and damage fund. Right. It's the market. The thing that makes the world go around, right? And they're working within it instead of fighting against it. That's it. David, how do you imagine the world would change if this does happen? Like, what would it look like? Well, let's be clear. Even if everything we're talking about happens, it's not going to solve the climate crisis. It's not going to make carbon emissions stop on a dime, and it's not going to stop the planet from warming anytime soon. But at the end of the day, we're talking about money here. anytime soon. But at the end of the day, we're talking about money here. What it would mean if these reforms really took place is that poor and vulnerable countries would have more funds at their disposal and more funds to use in order to recover

from storms and fires and floods, more funds to prepare for future disasters by building things like seawalls or preparing their schools and hospitals and making them more resilient to large, unpredictable weather events. And it would also mean that those poor countries that have been trapped in this cycle of debt and disaster maybe had some of the pressure taken off when it came to servicing that debt. That they maybe didn't always have to worry about paying back their creditors before they did things like take care of the people who were just displaced because of the latest hurricane. And Prime Minister Motley and Avi and everyone beating the drum about these reforms is quick to point out that this is in the interest of countries like the United States, that this is in the self-interest of France and Germany. And the reason why is because if these poor, vulnerable nations continue to be trapped in this cycle of debt and disaster and continue to have such a

hard time rising out of poverty, that's going to create even more cascading economic issues for these countries that they're still going to have to deal with one day down the line, whether it is through disaster relief or more debt or unpredictable geopolitical consequences of more and more countries destabilized by the climate crisis. David, if this all actually does come to pass, it feels a little bit like we'd be living in a kind of third era of global economic cooperation. Like the first one was the world coming together after the Second World War. The second one was the world coming together to bring poor nations out of poverty. And the third one would be this development of a system that fully incorporates climate change into global finance,

like makes a sustainable way to pay for all of this. And that would really be a first. For decades now, countries have understood that climate change is real. And for decades now, they've been trying these piecemeal, sporadic, ad hoc approaches to dealing with these disasters. There has never been a coordinated, unified effort to try to get the powers of the world and all the money that they possess directed at the countries that need it most with the intent of making the world more resilient to climate change as a whole. If all these reforms happen, if hundreds of billions or trillions of dollars are taken off the sidelines and started to be used for some of these projects, that would, by the estimates of a lot of longtime climate change experts, represent one of the most fundamental and historic efforts to really combat climate change and help the people who need it most deal with what is an unprecedented threat.

David, thank you. Thank you. Thank you. We'll be right back. Here's what else you should know today. In China, several cities announced the easing of lockdown restrictions and testing requirements. In Guangzhou, residents returned to work on Thursday for the first time in weeks since the COVID-19 lockdowns were lifted. In Chongqing, some residents were no longer required to take regular COVID tests. These developments suggest the ruling Communist Party may be starting to back down on its unpopular zero-COVID policy,

following one of the country's biggest series of protests in decades. Today's episode was produced by Michael Simon-Johnson, Rochelle Banja, and Mary Wilson, with help from Aastha Chaturvedi. It was edited by Paige Cowett and Liz O'Balin. Fact-Checked by Susan Lee contains original music by Marian Lozano and Dan Powell and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Lansford of Wonderly. That's it for The Daily. I'm Sabrina Taverdisi. See you on Monday.