As Avinash Persaud begins a new job next week at the Inter-American Development Bank, he can reflect on a busy few years, helping not only to develop the Bridgetown Agenda but also to drive through a landmark loss and damage fund at COP28.
The New Humanitarian interviewed Persaud on 6 December at COP28’s Barbados pavilion in Dubai. Sporting a plaid blazer, trendy glasses, and a red t-shirt, he stood out from the event’s general crowd of more uniformly suited officials.
As special climate envoy to Barbadian Prime Minister Mia Mottley, he forged the Bridgetown Agenda, aimed at reforming the international financial system to deal with escalating climate change and mounting debt.
It called for a raft of measures to support climate-vulnerable countries, including by increasing fiscal liquidity and green private finance, debt restructuring, and development lending. After it launched in 2022, the agenda gained major momentum in events like the Summit for a New Global Financial Pact in Paris in June 2023.
Then, working as a key negotiator in the fiendish talks over a loss and damage fund, Persaud helped to secure a hard-fought compromise, which was approved on the first day of COP28, 30 November 2023. The fund is intended to provide dedicated financing for countries to reconstruct and rehabilitate from climate shocks, though the institution has not yet been launched and views differ as to how it should work.
On 16 January, Persaud will begin a new role as Special Advisor on Climate Change at the IDB, the biggest source of development financing for Latin America and the Caribbean. Among other tasks, he is being charged with helping the institution conduct its development work in a “sustainable, climate-friendly way”.
But what does Persaud make of the journey he has been on? What did the Bridgetown Agenda really achieve? And what lessons should we draw from the compromises needed to strike a workable accommodation between rich and poor nations on loss and damage?
Although he acknowledged early on in the interview that “the world is… retreating from multilateralism”, Persaud held up the loss and damage agreement as something that strengthened international cooperation, and proof that “you can reach that kind of joint outcome on difficult issues”.
Had the agreement not been reached, it would have marked “a retreat into volunteerism” undermining all the other climate processes, he said. “You could kiss goodbye to ambitious NDCs [Nationally Determined Contributions, country climate plans] and adaptation targets, if the countries that have contributed the most greenhouse gases to global warming are also saying, ‘but I don't take any responsibility for the past’. It just doesn't add up.”
Persaud said one of the most “striking things” he has observed in his work is that “we are so framed by our own experience”. In climate talks, he noticed that for high-income country negotiators, “finance isn't the biggest problem. It's about policy. It's about politics. It's about wills.” Officials of richer nations were generally not aware of the much higher costs on capital faced by lower-income countries that make their climate action more expensive.
Despite the stark inequities, Persaud was reluctant to linger on the divisions exposed by the negotiations.
“We could labour on talking about the differences. I don't want to dwell on those, because, at the end of the day, they were bridged,” he said. “And if this fund is going to be successful, we have to focus on the bridges rather than to sort of retreat to our opposing and warring factions.”
On the Bridgetown Agenda
Persaud highlighted two achievements of the Bridgetown Agenda.
“One was identifying that the scale of the [climate] problem was completely unaddressed by the solutions on offer. There's so many solutions out there. But through Bridgetown, we've emboldened people [into] applying the test: Will it move the needle?” he said.
The second was to make it clear that “ambition without finance… is an empty ambition.” According to Persaud, the European approach to climate negotiations has been advocating for increased ambition, though high-income countries have fallen short on their climate finance obligations. “If there's no finance, it's a failure of finance [rather than of ambition],” said Persaud. “Ambition without finance doesn’t work.”
On Multilateral Development Banks
As the climate crisis has gained steam, Multilateral Development Banks (MDBs) – notably the World Bank – have come under increasing pressure to respond, particularly by improving environmental spending and improving how they work together. The Bridgetown Agenda was a significant driver of that pressure.
For Persaud, the MDBs have two key roles, both of which can help limit the extent of future loss and damage through improving countries’ preparedness. The institutions are “central to supporting countries becoming more climate-resilient today with long-term, inexpensive finance”. They are also “critical… in catalysing financial flows for the green transformation of developing countries”, he added.
But Persaud maintained his longstanding call for countries suffering climate disasters to receive grant financing rather than debt – which means the MDBs “have a different supportive role to play then, including pre-arranged debt service suspension”.
On the need for a loss and damage fund
In an already crowded multilateral system, some experts have questioned the need for a new institution like the loss and damage fund – given all the work that setting it up entails.
Having spent the last year working so hard to get the new fund launched, Persaud was unsurprisingly dismissive of those holding this point of view. “I think it is unquestionable we need a new institution, and I wonder – to be rude and arrogant – about their understanding [of the issues],” he said.
While the multilateral development banks already exist and can provide some support for resilience and adaptation, “they're not grant-giving organisations, they’re banks with capital”, Persaud said. “The closest thing we have to a grant-giving organisation is [the World Bank's International Development Association] IDA, but IDA has very limited eligibility.”
Therefore, unless these critics want to “increase the size of IDA dramatically”, a new institution is needed, he said, adding that the loss and damage fund “may do IDA-like things but for a different set of countries, and these are countries that are climate-vulnerable”.
On direct access for civil society
The idea of civil society groups gaining direct access to loss and damage funds has been advocated by some campaigners. But “that's going to be very difficult”, said Persaud.
Why? “Often, civil society, what they mean is that [funding] doesn't necessarily go to the central government. I think that's always going to be hard.”
Disasters require a national policy response within a national resilience plan, and “the idea that your government is not involved in that would be very difficult”, said Persaud.
On what the loss and damage fund is and isn’t for
Many big humanitarian agencies are – rhetorically at least – reorienting to climate resilience and anticipatory action, though aid officials have been cautious so far in their language around trying to access money in the loss and damage fund.
Persaud’s view of how the fund should work did not involve these approaches.
“It’s not for anything in anticipation… [and] it’s not a resilience fund,” he said. “It's not anticipating: We consider that adaptation and resilience [for which funds can be borrowed]. This is loss and damage. This isn't, ‘I'm about to have loss and damage’, this is ‘you've had loss and damage’, and we're trying to help address that.”
Key to getting donors to deliver funding is by “being very clear on what it's for”, said Persaud: in this case, “people who've experienced an extreme weather event or a slow-onset event”.
The loss and damage fund’s board – which Persaud didn’t expect to see formed before the end of January 2024 – will decide a number of thorny questions for the fund’s work, including financing for countries affected by fragility or conflict.
“Bear in mind that a conflict state, or a very poor country, is very likely to be an IDA country and be eligible to the IDA crisis window, which is focused on loss and damage, but is wider,” said Persaud. “So I suspect that if they can't access the IDA crisis window, it's not clear they'll be able to access our fund, which will be a little bit more focused on responding to a specific climate event.”
On funding the fund
More than $700 million was pledged by donors to the loss and damage fund at COP28 but decried by critics for not meeting the scale of need, which Persaud himself previously said would be at least $100 billion per year. But, speaking to The New Humanitarian, he was more optimistic about the funding pledged so far, which he framed as both its “capitalisation” and a “strong statement of support”.
“We recognised that this fund could not be funded to the scale it needs from taxpayers' money alone,” said Persaud. “While tax donations “had to kick it off… we need a financing plan.”
The type of funding Persaud described has often been called innovative finance, linked to taxes on fossil fuels and greenhouse gas emissions. “That's the way you will get to a 50 to $100 billion fund,” he said.
The task of 2024 “is the design of international financial revenues”, said Persaud, in particular through the French-Kenyan Taskforce on International Taxation to Scale Up Development, Climate, and Nature Action, which launched at COP28. The group, which also includes Antigua and Barbuda, Barbados, and Spain, will “examine possible new revenue streams to unlock additional financial resources” to tackle development, nature, and climate challenges. It will report “the most promising avenues” and make recommendations at COP30, in 2025.
Innovative financing doesn’t require the hard-to-reach unanimous agreement of a COP climate summit. Persaud gave the example of a tax on shipping determined by the International Maritime Organization “so that it doesn't disproportionately impact anybody”. Support for a maritime emissions tax won the support of 22 countries and the European Commission earlier this year, though loss and damage is not the only way revenues might be spent, which could include decarbonising shipping and improving maritime infrastructure, according to the World Bank.
Moving international tax discussions to the UN from the OECD is also important, said Persaud. “International tax needs to be done by an international treaty-based organisation where there's the voice of people, including development aspects,” he explained.
On global politics
Despite the increasingly febrile political backdrop – with some key global actors hostile to climate action – Persaud was optimistic that loss and damage funding policies could still be implemented.
For instance, he didn’t expect that the United States – where climate change denier Donald Trump could be re-elected this year – would vote against an international methane leakage levy.
“They don't want their companies to be suffering alone,” said Persaud, giving the example of the Inflation Reduction Act, which only applies to US companies. Europe’s controversial Carbon Border Adjustment Mechanism, meanwhile, could be viewed both as protection against cheap Chinese imports and a source of loss and damage funding, he added.
Persaud’s bigger worry was that the world is “retreating into a kind of green protectionism… treating friends and enemies differently, which is, I think, going to undermine the system”.
At the Barbadian government, “we're focused on delivering for people, so we focus on working with what we've got,” he said. “We've got [Dutch election winner Geert] Wilders and Trumps, and we notice that they're imposing taxes, they're imposing protectionist models. How can we use this world we’re in to try and make it a better place?”
Edited by Andrew Gully.