Eurasianet commentary

The international financial system (IFS) represents the institutions, rules, and instruments, including the International Monetary Fund (IMF), the World Bank, and other multilateral development banks (MDBs), and the multilateral climate funds. The IMF and World Bank were established in the 20th century, when most of the current members of the system were under colonial rule. Today, the system is under sustained pressure to reform in order to better serve low-income and least developed countries (LICs and LDCs) that face compounding development, debt, and climate shocks. Climate adaptation finance—the resources needed to help communities and economies prepare for floods, droughts, heatwaves, and sea-level rise—remains severely underfunded relative to need, and much of what flows to vulnerable countries arrives as loans rather than grants, deepening debt burden. Reform efforts led through the G20, IMF, and World Bank shareholders, the 2023 Summit for a New Global Financing Pact, the Fourth International Conference on Financing for Development (FfD4) in Sevilla, Spain, and successive UN climate conferences are converging on a shared diagnosis: the system must become faster, cheaper, and fairer for the countries least responsible for, and most exposed to, global shocks including climate change. Global climate finance analysis shows adaptation received only a...