One of the world’s preeminent development finance institutions was already struggling for reauthorization. Now it appears to have an extremely powerful skeptic: One of the richest men in the world.
Also in today’s edition: Concepts of a plan to tax the rich at the G20, and at COP29, glacial progress to stop the planet from overheating.
Elon Musk labeled the director of climate diversification at the U.S. International Development Finance Corporation, or DFC, a “fake job” this week.
In a post on the social media platform X, which Musk owns, the billionaire shared another user’s post which argued that U.S. taxpayers should not pay for the position.
“So many fake jobs,” wrote Musk, who earlier this month was tasked by U.S. President-elect Donald Trump with co-leading a new Department of Government Efficiency.
According to a statement by Trump, Musk and former Republican presidential candidate Vivek Ramaswamy will “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.”
As a development finance institution, DFC’s aim is to use public money to crowd in greater private investment (including from American firms) in low-income countries.
It reported last week that its climate finance commitments have grown from less than $500 million to nearly $4 billion over the past four years. And DFC Chief Climate Officer Anna Shpitsberg said in a press release that it is “helping communities capitalize on a once-in-a-generation opportunity to attract investment in energy diversification and climate solutions across nearly every sector of the economy.”
It is a sensitive moment for DFC, which was established during the first Trump administration, and is currently awaiting reauthorization by the U.S. Congress.
We asked DFC for a response to Musk’s comments and were told by an official: “DFC does not comment on individual personnel positions or matters.”
ICYMI: DFC has record year following reorganization, but needs reauthorization (Pro)
See also: US Development Finance Corporation hopes to BUILD on its future (Pro)
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As aid budgets keep dropping, attention is shifting to new revenue streams to tap in pursuit of the U.N. Sustainable Development Goals.
Taxing the world’s wealthiest people — who often pay next to no tax due to loopholes, offshore accounts, and wealth concealment — is often near the top of the list. And leaders of the Group of 20 largest and emerging economies nudged that agenda along this week in Brazil, agreeing that “progressive taxation is one of the key tools” to reduce inequality, and to “engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed.”
As Devex’s Elissa Miolene, who was at the G20 summit in Rio de Janeiro, writes: “The declaration did not include who would be targeted with that tax, what the tax rate would be, or where any additional tax revenue would go. But the hope is that the cash could be channeled toward achieving the Sustainable Development Goals, especially as they relate to climate change.”
The leaders said they “look forward to continuing to discuss these issues in the G20 and other relevant forums.”
But they didn’t say which forums those might be, failing to find consensus on whether to focus more on the United Nations or the Organisation for Economic Co-operation and Development for instance, which was a fault line when G20 finance ministers agreed similar language in July.
Poliana Garcia, who worked on achieving the cross-country consensus at Brazil’s Ministry of Finance, said: “We managed to find language that was broad enough to symbolize that this is only the beginning.”
If that’s the case, this paper on the history of wealth taxation from economists Emmanuel Saez and Gabriel Zucman shows we’ve been “beginning” for a while.
Read: G20 leaders have agreed it’s time to tax the rich. What does that mean?
Catch up with our G20 reporter’s notebook: On the ground for Rio's G20 summit
Negotiations are going down to the wire (as they seem to do every year) in Baku, Azerbaijan, at the 29th U.N. climate talks, or COP29.
The latest negotiating text, out Thursday, is here. It’s light on detail and there are still two options:
• One that seems to be from lower-income countries, with an as-yet-unspecified annual amount of money in the trillions of dollars with a public funding goal.
• The other, from wealthy countries, with an overall goal to mobilize climate finance to an unspecified-but-in-the-trillions target by 2035.
“I wouldn’t have been surprised to see this a couple of days ago. I think the challenge is that we are seeing it now. And time is very tight to do the work,” David Waskow, director of the World Resources Institute's International Climate Initiative, said in a call with reporters on Thursday in Baku.
Devex’s Ayenat Mersie is at COP29 and following efforts to agree a new collective quantified goal, or NCQG.
Lower-income countries have unanimously called for $1 trillion, but one negotiator for the Group of 77 — a coalition of lower-income countries — said that there is no hard line that would make them walk out of negotiations.
That’s probably just as well, given that the European Union has reportedly been eyeing a figure closer to $200 billion or $300 billion. It will be critical, as many have noted, to clarify how much of the final number is supposed to be public money, and how much is the promise to mobilize private finance to help out.
Get the latest from Baku in our reporter’s notebook.
Listen to the latest podcast episode: What role can the private sector play at the ‘finance COP’?
And go deeper here on one of the main sticking points in Baku — to what extent should countries like India and China contribute to the NCQG?
As Cheena Kapoor reports for Devex, India last year contributed $1.28 billion in climate finance to its neighboring least developed countries, or LDCs. But it is also hoping to receive more funding itself once the NCQG is established.
India is now the world’s third-largest greenhouse gas emitter, though it has the lowest emissions per capita in the G20.
The European Union has argued that “the collective goal can only be reached if parties with high GHG-emissions and economic capabilities join the effort.”
“Just because our GDP is growing does not mean we are in a position to commit to donate,” says Neha Khanna, senior manager of the green and sustainable finance practice at the Climate Policy Initiative, a global nonprofit research and advisory institution working on climate finance and energy transition. “We are in a highly vulnerable situation ourselves.”
Read: Is it time for India to step up as a climate donor?
You’ve heard about safeguarding workers’ livelihoods through a just transition to a climate-friendly world in the energy sector. But Ismahane Elouafi, CGIAR managing director, and Kaveh Zahedi, director of the Office of Climate Change, Biodiversity and Environment at the Food and Agriculture Organization, write an opinion piece for Devex this week on the importance of ensuring the same for farmers.
“Transitioning from high-emitting practices, such as intensive cropping and livestock farming prevalent in some countries, can result in yield penalties and even job losses in the short term,” the pair write. “The consequences, if not carefully managed, may include global price increases and food shortages that affect low-income regions and the poorest the most.”
How to do that?
• Safety nets for farmers while they transition to climate-friendly farming
• More and better green equipment and resources
• Ramping up public and private investment into demand-driven agricultural research and development
• Shift financial incentives to reward — not only compensate — farmers who adopt more sustainable forms of agriculture.
Opinion: Farmers cannot lose out in the race to net-zero
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China overtook the U.S. to become the second-biggest donor in the Pacific, with Australia topping the list, according to a Lowy Institute report. [VOA]
The U.S. has vetoed a draft U.N. Security Council resolution for ceasefire in Gaza, as U.N. agencies claim that virtually no aid has entered besieged areas. [BBC]
With at least 1,000 casualties, Myanmar has surpassed Syria and Ukraine as the country with the most people killed or maimed by landmines in 2023. [The Telegraph]