The Urgent Need to Prioritize Investments to Address Climate Change,
Poverty, and Hunger:
Significant Contextual Data from the Fourth Summit of Common Finance
Cartagena, September 4th to 6th, 2023
Introduction
The most recent data provided by renowned international organizations such as the United Nations (UN), the United Nations Development Programme (UNDP), and the Food and Agriculture Organization of the United Nations (FAO) shed light on the dramatic magnitude of the interconnected effects of climate change, poverty, and hunger worldwide. Given this juncture, it is imperative to focus on and prioritize a series of pivotal investments over the next decade in order to mitigate and address these critical challenges.
The Impact of Climate Change on Global Food Security
The phenomenon of climate change exerts an influence of extraordinary dimensions on global food security. In 2019, estimates indicated that approximately 828 million people, equivalent to 10% of the global population, suffered from food insufficiency. This affliction disproportionately affects regions in Africa, Asia, and Latin America, in descending order of severity. However, it is alarming to observe that this number is projected to increase to 1.026 billion people by 2030 if decisive measures are not taken to alleviate this situation.
Vulnerability of Marginalized Populations to Climate Change
The impact of climate change is particularly acute for the most vulnerable populations, who are further exacerbated by deficiencies in education, infrastructure, healthcare, and access to essential conditions. These communities experience the brunt of droughts, floods, and storms with greater intensity, which also trigger displacements, loss of livelihoods, and an increase in the prices of basic necessities such as clothing and shelter.
The Landscape of Global Extreme Poverty
A stark image emerges when analyzing the global distribution of extreme poverty. No corner of the world is exempt from this problem that affects millions of people. Africa stands out as the epicenter most affected by extreme poverty, with over 900 million individuals living on less than $1.90 a day. The hardest-hit countries in this region include Nigeria, Ethiopia, the Democratic Republic of Congo, Mozambique, and Uganda.
Asia, the second most impacted region by extreme poverty, is home to over 500 million people surviving on less than $2 a day. Nations like India, China, Bangladesh, Pakistan, and Indonesia top the list of the most affected countries.
In Latin America and the Caribbean, extreme poverty affects more than 100 million people
who subsist on extremely limited incomes. Countries such as Brazil, Mexico, Colombia,
Argentina, and Peru face significant challenges in this area.
Meanwhile, the Middle East and North Africa have more than 100 million people living in
conditions of extreme poverty, with nations like Yemen, Syria, Iraq, Iran, and Lebanon.
Access to Basic Services and the Critical Need for Investment
The lack of access to fundamental services such as clean water and basic sanitation is
equally pressing. Africa, Asia, and Latin America present alarming levels of deficiency. 33%
of the African population lacks access to clean water, while in Asia and Latin America, the
percentages are 25% and 15%, respectively.
Investment Requirements
International organizations, including the UN and the Organization for Economic Cooperation
and Development (OECD), estimate that the required investment amounts to jointly address
the challenges of climate change, poverty, and hunger amount to $100 billion annually to
tackle climate-related factors and $500 billion annually to fund solutions for poverty and
hunger.
Investment Options to Mitigate Challenges
Various investment alternatives can contribute to mitigating the effects of climate change,
poverty, and hunger. The emphasis on renewable energy, for instance, would not only
reduce greenhouse gas emissions but is also projected to generate up to 24 million jobs
worldwide. Likewise, investment in sustainable agriculture emerges as an effective path to
enhance agricultural productivity, counteract soil degradation, and bolster resilience to
climate change, benefiting around 1 billion people. Lastly, the implementation of social
protection systems could safeguard up to 1.5 billion people globally from the adverse
impacts of climate change, poverty, and hunger.
Conclusions
In conclusion, the data provided by the UN, UNDP, and FAO present a distressing picture of
the interaction between climate change, poverty, and hunger in the global context. The
magnitude of these challenges demands significant and strategic investments in renewable
energy, sustainable agriculture, and social protection systems to achieve a more equitable
and sustainable future for generations to come. The investment estimates provided by
international organizations underscore the need for global commitment and immediate
actions to reverse these alarming trends.
The Potential Impact of Education Investment on Global Extreme Poverty Eradication
Introduction
Investing in education has emerged as one of the most powerful and promising strategies to
address extreme poverty on a global scale. Education not only empowers individuals and
equips them with tools to improve their living conditions but also contributes to human capital
formation, skill development, and the generation of sustainable economic opportunities. In
this context, we explore the potential impact of education investment on the reduction and
eventual eradication of extreme poverty in various regions of the world.
Empowerment through Education
Education plays a crucial role in empowering individuals living in conditions of extreme
poverty. Educated individuals are better equipped to break the cycle of poverty by having
more job opportunities, access to healthcare services, and a greater awareness of their
rights and resources.
Generation of Economic Opportunities
Investing in education can catalyze sustainable economic opportunities. Education not only
enables individuals to access higher-quality and higher-paying jobs but also fosters
innovation and entrepreneurship. An educated workforce can contribute to economic growth
by participating in higher value-added industries and promoting the development of
technological and creative sectors. Additionally, education can decrease reliance on informal
and low-income jobs, ultimately contributing to poverty reduction.
Human Capital Development
Education contributes to the development of human capital, encompassing skills,
knowledge, and competencies that individuals can contribute to society. Human capital is a
valuable resource that can enhance individual and collective productivity, thereby improving
economic and social prospects. As individuals access quality education, they acquire
transferable skills that can be applied in various contexts, strengthening their ability to adapt
to economic and technological changes.
Multiplier Effect on Development
Investing in education has a multiplier effect on development and poverty reduction. When
people access education, a virtuous cycle is created in which they are better positioned to
enhance their own quality of life and that of their families. Education also correlates with
informed decision-making in areas of health, family planning, and economic well-being,
contributing to the reduction of infant mortality and overall health improvement.
According to the UN, to achieve significant reductions in poverty rates and progress towards
the goal of reducing poverty by around 20%, countries are recommended to invest at least
4% to 6% of their Gross Domestic Product (GDP) in education. These figures are based on
analyses and recommendations from international organizations, including UNESCO, that
have identified education investment as a critical tool for economic development and poverty
reduction.
The Summit of Common Finance and its Role in Combating Poverty and Climate
Change
The Summit of Common Finance is a platform that brings together development banks from
around the world and has played a crucial role in the fight against poverty and climate
change by driving the alignment of public policies with sustainable development goals.
During its three main meetings, the summit has addressed the imperative need to prioritize
public investments to address these global challenges, highlighting successes and outlining
pressing challenges in this arena.
First Summit (2017): The first Summit of Common Finance laid the groundwork for
collaborative dialogue among development banks. Focusing on the importance of
responsible public investments, the links between poverty reduction and climate change
mitigation were acknowledged. The pivotal role of these banks lay in promoting sustainable
projects that generate positive social impact, such as providing access to clean energy and
basic services in disadvantaged regions.
Second Summit (2019): In the second meeting, the commitment of development banks to
the 2030 Agenda and the Paris Agreement was solidified. The need to redouble efforts to
mobilize financial resources toward projects that simultaneously addressed poverty and
climate change was underscored. Banks focused on investing in resilient and sustainable
infrastructure, thereby promoting equitable development and a transition to low-carbon
economies.
Third Summit (2021): The third Summit marked a milestone by directly addressing the need
to accelerate action in the critical decade towards 2030. Development banks committed to
significantly increasing their investments in projects aligned with the Sustainable
Development Goals and climate targets. The importance of investing in education, health,
and social protection as fundamental pillars to reduce poverty and foster resilience to climate
change was emphasized.
Proposal for Prioritizing Public Investments
In light of the need to prioritize public investments towards addressing the challenges of
poverty and climate change, a comprehensive strategy is proposed:
Integrated Approach by Development Banks: Development banks must adopt an
integrated approach that incorporates environmental and social conditions into project
planning. This entails assessing climate impact and poverty reduction implications in every
investment. Furthermore, democratizing access to capital for smaller-scale private initiatives
and strongly promoting SMEs.
Public-Private Partnerships: Promoting public-private partnerships to mobilize additional
resources and expertise in implementing sustainable projects, leveraging the private sector’s
experience and innovation.
Encouraging Innovation: Stimulating research and innovation in clean technologies,
sustainable agriculture, and affordable solutions for renewable energy, thereby creating
economic opportunities and improving living conditions.
Institutional Strengthening: Investing in the capacity of governments and local organizations
to design and implement sustainable projects that address local needs and contribute to
poverty eradication.
Achievements and Challenges
Among the successes of the Summit of Common Finance, the creation of a global platform
for cooperation and learning among development banks stands out, demonstrating a joint
approach to combating poverty and climate change. However, urgent challenges persist,
such as mobilizing sufficient financial resources, both public and private, ensuring equitable
distribution of benefits, and accelerating the implementation of large-scale sustainable
projects.
Ultimately, the Summit of Common Finance represents a significant opportunity to effectively
address the interconnected challenges of poverty and climate change through strategic
public investments and strong international collaboration. Its ongoing impact arises from
political will and commitment to sustainable action across all spheres of global society.
