Developing nations called for a “transformation” of the world’s financial system at French President Emmanuel Macron’s Summit for a New Global Financing Pact. Western countries offered tweaks.

However, the two-day summit — which sought to turbocharge reform efforts aimed at unlocking the trillions of dollars required to tackle climate change — did deliver a sense of growing momentum.

Yet despite progress on some fronts, the Paris summit ended Friday barely having addressed the underlying problems preventing developing countries from investing in development and climate measures — in particular, their crushing debt levels.

In her opening speech on Thursday, Barbados Prime Minister Mia Mottley, who co-hosted the summit alongside Macron, called on attendees to deliver a path to “transformation, not reform” of the global financial system.

A sprinkling of announcements followed: The International Monetary Fund said it reached a target of making $100 billion in special drawing rights (SDRs), a reserve currency, available to climate-vulnerable countries; And the World Bank said developing nations hit by climate disasters would be able to suspend debt repayments.

Rich countries announced a €2.5 billion clean energy agreement with Senegal and Zambia struck a deal to restructure $6.3 billion of its debt. A push for taxing shipping emissions also gained support.

But Macron, German Chancellor Olaf Scholz, U.S. Treasury Secretary Janet Yellen and the heads of financial institutions were met with an outpouring of frustration at Friday’s closing ceremony.

“A number of the commitments that have been made have not really been fully lived up to,” said South African President Cyril Ramaphosa, referring to rich countries’ failure to deliver the promised $100 billion in annual climate finance by 2020 as one example.

“Sometimes we’ll sit at conferences like this and say, ‘Yes, we will make this available and that available,’ and we believe you. We believe you, but now … we must now see action flowing from that,” he added.

Macron — who said Friday that the overdue $100 billion pledge had now finally been met — responded by defending the summit. “We can’t say that we are not doing anything, it’s not true.”

The French team putting the summit together had framed it as a momentum- and confidence-building event. It was to be just one stop in a long journey to reconfiguring decades-old institutions that predated independence for many of the countries in attendance.

Macron proposed meeting again in Paris in two years at the latest and setting up a monitoring mechanism to ensure promises are kept, while warning against “engaging in repetitive indignation” about the lack of progress at summit after summit.

Avoiding the debt debate

In recent years, as conflicts over money increasingly held up progress at global climate summits and the pandemic threw global inequalities into stark relief, Western countries have shown a greater willingness to budge on finance issues.

But current efforts fall far short of the needs of developing countries, which require an estimated $2.4 trillion a year to reduce emissions and deal with climate impacts, according to a report commissioned by the U.K. and Egypt ahead of COP27.

Macron’s summit, many hoped, would set the tone for meaningful progress on climate finance ahead of this year’s COP28 climate conference in Dubai.

The forward movement on disaster debt suspension clauses, reallocation of SDRs and discussions around global taxes was welcomed by attendees. Rich countries, however, barely engaged with the Global South’s key demands on debt relief and new financing.

Major World Bank shareholders like the U.S. emphasized making institutions more efficient and stretching their lending before pouring in new capital. Any recapitalization would also potentially involve ratcheting up voting representation for China, something many G7 countries would rather avoid.

During a panel on Thursday evening, Mottley called out Western countries — and Europeans in particular — on debt.

The EU’s Maastricht Treaty, Mottley noted, sets a debt-to-GDP ratio limit of 60 percent. “The hypocrisy of the moment … is found in the fact that almost every country in Europe is now facing debt-to-GDP ratios of over 90 percent,” she said.

“The U.K. took 100 years to repay its debt for WWI. And Germany had all the benefits of having its debt service capped … to rebuild Germany after WWII,” she added. “We are people too. We are countries too. And we deserve similar treatment.”

A ‘sense of hope’

In Friday’s closing ceremony, Zambian President Hakainde Hichilema thanked countries and creditors for making his country’s debt restructuring deal possible.

But, he said, the agreement had taken too long to hammer out, criticizing “the speed at which we do things … Every day we don’t deliver these things we are basically increasing the costs.”

Brazil’s Luiz Inácio Lula da Silva used his closing speech to hit out at the setup of global institutions like the World Bank, the IMF, the United Nations and the World Trade Organization, decrying the “return of protectionism” and unequal trade agreements.

“If we don’t change our institutions, the world will remain the same,” he said. “And the rich will go on being rich, and the poor will go on being poor.”

Still, many attendees left Paris on Friday with a sense of optimism. Marshall Islands envoy Albon Ishoda said the summit had “renewed a sense of urgency and hope for many of us.”

France on Friday evening published a roadmap setting out the way forward up until mid-2024, alongside a chair’s summary.

That investing flows, borrowing rates and the international financial architecture have become so ingrained in the climate conversation underscores progress in addressing the needs that emerging and climate-vulnerable countries have pointed out for years.

“It says something really important,” said Alex Michie, head of capital mobilization at the Glasgow Financial Alliance for Net-Zero, an investor-led pact seeking to drive private capital into clean energy. “It now basically has become mainstream.”

Avinash Persaud, Mottley’s climate envoy, told reporters after the summit ended that he saw Paris as an “important inflection point.”

He added: “Nine months ago, if I’d said to you that there will be widespread adoption of disaster debt clauses … you’d be saying, what are you smoking?”

Clea Caulcutt and Giorgio Leali contributed reporting from Paris.