SPECIAL ADDRESS AT DAVOS AGENDA
25 January 2021
I thank you very much for this opportunity to address the Davos Agenda.
Humanity has just endured a year of tragedy and crisis that we never want to repeat.
If there is one word that characterizes today’s world, it is fragility.
We see it in the impacts of the COVID-19 emergency.
More than 2 million people have died, and we are in the worst economic crisis for nearly a century.
We see it in the inequalities among people and countries that have been starkly highlighted by the pandemic.
Women, in particular, have been badly affected by job losses and extra burdens of care.
We also see fragility in the climate and biodiversity crises.
Both are existential threats. Both are getting worse.
We are waging war on nature and destroying our life support system and nature is striking back.
We see fragility in global geopolitical divides.
We continue to fear the possibility of a great fracture: the world splitting in two, with the two largest economies on Earth leading two areas with different dominant currencies, trade and financial rules, each with its own Internet, and its own zero‑sum geopolitical and military strategies.
We must do everything possible to avert such a division.
We need one global economy with universal respect for international law; a multipolar world with strong multilateral institutions.
We also see fragility in cyberspace, with no consensus on how to take full profit of the digital world that we all increasingly depend on, while avoiding the risks.
We are still far from putting in place the multi-stakeholder mechanisms that would ensure safe and equitable governance of cyberspace.
We also see fragility in the disarmament regime and the growing risks of nuclear and chemical proliferation.
We have reached a moment of truth.
In 2021 we must address these fragilities and put the world on track.
It is time to change course and take the sustainable path.
And, this year, we have a unique opportunity to do so.
We can use our recovery from the COVID-19 pandemic to move from fragilities to resilience.
But, all these threats, all these obstacles to progress, demand dialogue and collaboration.
Governments, international organizations, the private sector and civil society, cities, need to work together.
That is why I have been repeatedly calling for a reinvigorated, inclusive and networked multilateralism that goes beyond inter-governmental organizations.
Our common direction has been clearly defined by the Sustainable Development Goals.
But for the Decade of Action to be a reality we need to be calling for a New Social Contract and a New Global Deal to create equal opportunities for all and respect the rights and freedoms of all.
A New Social Contract within societies is needed to enable people to live in dignity.
A New Social Contract, between Governments, people, civil society, businesses and more, integrating employment, sustainable development and social protection, based on equal rights and opportunities for all.
It can enable young people to live in dignity; ensure women have the same prospects and opportunities as men; and protect the sick, the vulnerable, and minorities of all kinds.
Quality education and digital technology must be the two great enablers and equalizers of the Contract.
A New Global Deal — a new model for global governance — should ensure that power, wealth and opportunities are shared more broadly and fairly at the international level.
It must be based on full, inclusive and equal participation for developing countries in global institutions.
Looking at the present moment in the context of pandemic recovery, I see two immediate priorities.
First, we need an inclusive and equitable global recovery to achieve the Sustainable Development Goals.
Second, we need a green recovery that will tackle climate change and biodiversity loss.
Let me take them each in turn.
Inclusive and sustainable recovery around the globe will depend on the availability and effectiveness of vaccines for all, immediate fiscal and monetary support in both developed and developing countries, and transformative longer-term stimulus measures.
In record time, scientists have produced rapid tests, treatments and vaccines against COVID-19.
Our challenge now is to undertake the largest and most rapid deployment of vaccines the world has ever seen, reaching everybody, everywhere.
This is in every country’s self-interest.
It is the fastest way to reopen the global economy.
But supplies of the vaccines are still scarce, and distribution is uneven.
Vaccines are quickly reaching high-income countries, while the world’s poorest have none at all.
If developed countries think they will be safe if they vaccinate their own people while neglecting the developing world, they are wrong.
There is now a clear, real danger of mutations making the virus more transmissible, more lethal and more resistant to existing vaccines.
We must act fast.
Vaccine production capacity around the world needs to be massively scaled-up, licenses made available and affordability must be ensured.
Vaccines must be seen as global public goods — people’s vaccines.
That requires full funding for the Access to COVID-19 Tools Accelerator and its COVAX facility led by the World Health Organization.
But vaccination is not a panacea.
We must also find ways to deal more equitably with the dramatic socio-economic impacts of the pandemic.
That means addressing the structural inequalities that make so many societies vulnerable.
Not only has the COVID-19 pandemic revealed our inequalities in stark detail, it has helped widen them – from labour markets to education to health.
And while developed countries have put in place unprecedented stimulus packages worth double-digit trillions, only 1 per cent of these resources have made their way to developing countries.
Many middle-income and least developed countries need liquidity to avoid debt defaults.
The High-Level events that I convened last year with the Prime Ministers of Canada and Jamaica on Financing for Development in the Era of COVID-19 and Beyond, highlighted the massive and urgent need for solidarity and financial support from all relevant stakeholders, including private creditors.
These of course must include debt relief for all countries that need it, so that no one is forced to choose between providing basic services for their people or servicing their debts.
And it must include a new allocation of Special Drawing Rights to the benefit of developing countries, and a voluntary reallocation of unused Special Drawing Rights.
We also need to bring more fairness into the world of work.
That means that we reduce the very high increase disparities we have in incomes today in the labour markets.
And it means closing the gender pay gap, ensuring women’s full and productive employment and increasing women’s participation in decision-making at all levels.
Let me turn now to my second priority.
The trillions of dollars needed for COVID-19 recovery are borrowed from future generations, who, on top of that, will also have to bear the worst impacts of climate disruption.
Yet, last year, the G20 members spent 50 per cent more in their rescue packages on sectors linked to fossil fuel production and consumption than on low-carbon energy.
Our central objective for 2021 is to build a truly global coalition for carbon neutrality.
Every country, city, financial institution and company needs to adopt credible plans backed by intermediate goals for transitioning to net zero emissions by 2050, and to take decisive action now to put themselves on the right path.
Every sector must do its part, from aviation and agriculture to transport, shipping and industry.
To achieve net zero by 2050, countries must review their Nationally Determined Contributions before COP26 in Glasgow to rapidly and drastically cut greenhouse gas emissions by 45 percent by 2030 compared with 2010 levels, as the international scientific community is telling us is necessary.
COP26 is also the occasion to show much stronger ambition on adaptation and finance.
Huge gaps remain on financing for adaptation in developing countries, which are already suffering the dramatic impacts of climate change.
That is why I have called for 50 per cent of the total share of climate finance provided by all donors and multilateral development banks to be allocated to adaptation and resilience.
Adaptation cannot be the neglected half of the climate equation.
And, to build confidence, developed countries must meet the commitments made in the Paris Agreement to mobilize $100 billion dollars a year for mitigation and adaptation in developing countries.
For all this to be possible we need drastic changes in policies.
We must end perverse subsidies for fossil fuels based on tax payers money.
We must put a price on carbon.
Shift taxation from income to carbon, from taxpayers to polluters.
We must commit to no new coal-fired power plants.
And massively invest in renewable energy, especially for the hundreds of millions of people who still live without electricity.
We need to flick the “green switch”.
A sustainable economy driven by renewable energy will create new jobs, resilient infrastructure and a healthier future.
And it is within our reach.
Global investment in renewable energy capacity reached $35 billion dollars in the first half of 2020, rising 319 per cent and surpassing investment for all of 2019, opening opportunities that cannot be missed.
Countries are committing to ever more ambitious national climate plans and long-term strategies, with the private sector as a core part of their approaches.
And a growing global coalition for carbon neutrality by mid-century has been gaining ground.
Some of the world’s largest emitters have made encouraging announcements, including the European Union, the United Kingdom, Japan, South Korea and China
The new administration in the United States has also committed to net zero emissions by 2050.
So, today, countries representing 65 per cent of global CO2 emissions and 70 per cent of the world’s economy have committed to carbon neutrality.
Net zero commitments by the business sector have also doubled in the last 12 months.
Companies with a combined revenue equal to the economy of the United States are now committed to reducing greenhouse gas emissions in line with the Paris Agreement.
Decarbonization is inevitable and gathering pace.
And it offers gigantic commercial opportunities.
Technology is on our side.
Renewable energy is getting cheaper all the time, and battery storage capacity is expanding.
Now all financial decisions need to take into account the risks of climate change and the opportunities inherent in addressing it.
Mandatory reporting in line with the Task Force on Climate Related Financial Disclosures can support this.
I strongly encourage all financial institutions to align their portfolios with the Paris Agreement and all asset managers to decarbonize their portfolios and accelerate a low-carbon transition of economic sectors.
I welcome the work of the Net Zero Asset Owners Alliance, and I challenge it to broaden its membership to Asian and American asset owners.
The world’s pension funds manage $32 trillion dollars in assets, putting them in a unique position to move the needle and lead the way.
I also encourage all businesses to align with the United Nations Global Compact and its Ten Principles for sustainable business.
The opportunity to end the spiral of destruction is in our hands.
It is an epic policy test where the private sector has a key role to play.
Governments will not be able to lift societies out of the COVID and climate crises alone.
We need decisive private sector action to get us on track to achieve the SDGs by 2030 and implement the Paris Agreement.
We count on businesses to play an important role by themselves and to put pressure on governments to do the right thing.
Every action, big or small counts, but those with greater capabilities and resources should lead the way.
To those that have not yet set a science-based target, I urge you to prepare your business for the future now and join the Race to Zero.
To those that have set a target to align their operations with the Paris Agreement and the net-zero objective, I call on you to engage your supply chains to commit to do the same in time for the next United Nations climate change conference – COP26 in Glasgow.
We need you more than ever to help us change course, end fragility, avert climate catastrophe and build the equitable and sustainable future we want and we need.