Finance Ministers at the Forefront: Driving Economic Prosperity, Sustainable Development and Climate Action Amid Constrained Fiscal Environments
23 April 2025, 8:00-9:00 AM, Shihata Conference Room, World Bank (MC13-121)
Summary: The Coalition of Finance Ministers for Climate Action (‘the Coalition’) will host its 13th Ministerial Meeting as a high-level plenary meeting at the World Bank’s Spring Meetings on Wednesday, 23 April 2025. The discussion will center on the crucial role of Finance Ministries in delivering ambitious climate action and sustained economic prosperity within conditions of limited fiscal space and a complex and shifting geopolitical landscape.
Participants: Ministers of Finance, Vice Ministers, State Secretaries, President of the World Bank, Managing Director of the IMF, and an invited technical expert.
Format: This year’s Spring Ministerial Meeting will feature a ministerial roundtable, opening with scene-setting remarks from the Co-Chair Ministers (Finance Ministers of Indonesia, The Netherlands and Uganda as incoming Co-Chair), followed by brief landscape perspective on the topic by an eminent economist. The main plenary session will feature interventions from Ministers of Finance (only) from member countries, with the World Bank President and the IMF Managing Director to conclude the plenary discussion with their reflections on the ministerial discussion. The event will end with the formal handover of the Co-Chairmanship from Indonesia to Uganda.
Discussion Question: What can be learned from the concrete experiences, solutions and actions your Finance Ministry is undertaking to drive climate action, economic prosperity, and sustainable development goals within limited fiscal space and in a complex and shifting geopolitical landscape?
Theme: Governments worldwide face rising costs of living, lingering inflation concerns, sluggish economic growth, and high debt levels – affecting jobs, incomes and overall livelihoods. In many parts of the world, Finance Ministers are preoccupied with energy security, trade and defense-related concerns. As global tensions rise and economic uncertainties persist, finance ministries must balance short-term macro-economic stability with long-term fiscal sustainability. Though overshadowed in the current macroeconomic and geopolitical landscape, climate change remains a structural force as its risks rapidly materialize, shape long-term economic trajectories and policy imperatives. Delaying climate action will only increase long-term costs, strain public finances, and deepen inequalities. Decisive climate action requires large upfront investments, the High-Level Expert Group on Climate Finance (IHLEG) estimates around $6.3–6.7 trillion per year by 2030, of which $2.7–2.8 trillion is high-income countries (HICs), and $2.3–2.5 trillion in emerging markets and developing countries (EMDCs) other than China. Problematically, many countries – whether EMDCs facing liquidity crises or HICs grappling with debt and high interest rates – have limited fiscal space and competing spending priorities.
Finance Ministers play a pivotal role in addressing these mounting challenges, ensuring that climate action and economic prosperity are mutually reinforcing while operating within fiscal constraints. Yet, climate risks and investment opportunities vary significantly across countries due to differences in exposure, institutional frameworks, economic conditions, and adaptive capacities, among other factors. Indeed, while HICs primarily face significant challenges in mitigation, EMDCs primarily grapple with adaptation. Though both aspects remain important across all regions, tailored fiscal strategies will be needed to address these challenges. To be effective, these policies must also be designed with a clear understanding of the current macro-economic environment, their impact on key strategic industries and the broader social fabric, ensuring that transitions are not only fiscally sound but also equitable and inclusive.
There is a significant opportunity and pressing need to scale up private sector investment for mitigation and adaptation action, given the fiscal constraints and the dynamism the private sector brings in driving prosperity, resilience, and the low-carbon transition. Across all countries, private finance must increase significantly, reflecting a fundamental shift in its current role. This transformation will require finance ministries to play a pivotal part in forging a new partnership with the private sector—developing policies, incentives, and regulatory frameworks that de-risk investments, enhance market confidence, and align financial flows with climate and development priorities. However, in EMDCs, private sector finance must increase nearly tenfold by 2030. The private sector is neither equipped nor incentivized to take on this role at the scale and speed required—particularly for adaptation investments, which typically generate no direct financial returns, face high uncertainty, and are concentrated in vulnerable regions where market-based solutions are least viable. Meeting this challenge will likely require finance ministries in EMDCs to make difficult trade-offs in allocating scarce public resources—balancing immediate social and economic needs with long-term climate resilience. Consequently, finance ministries will need to develop innovative policy instruments, mobilize domestic public revenues, and strategically direct scarce public resources toward climate initiatives that drive economic prosperity, create jobs, and advance broader development priorities.
Outcomes: The Co-Chair Ministers propose to conclude the high-level discussion with a ministerial outcome statement on behalf of the Coalition, reaffirming members' commitment to climate action and the Coalition's founding principles. The statement would contribute to the narrative that climate action and economic prosperity go hand in hand, recognizing that climate change poses a macroeconomic risk to countries and the global economy. It also emphasizes the key role that MoFs play, as shown by the examples from members. This aims to provide an important contribution to discussions that will follow during the Spring Meetings and on the road to COP30.
Logistics: Due to space limitations and room capacity, only ministers and one accompanying delegate will be permitted in the meeting room. Guaranteed seating at the plenary table is reserved exclusively for ministers. Institutional Partners will have access to the meeting room for Principals only.
Additional information regarding the meeting format, seating arrangements, and other logistical details will be provided at a later date.