“We can’t pretend, day by day, that someone somewhere else is going to make that change. This is our family. This is our world. And this is our time to make that defining difference.” These are the words of Mia Mottley, the Prime Minister of Barbados, as she presented the Bridgetown Initiative to the world at the UN General Assembly in 2022.
The initiative, named after the Caribbean nation’s capital city, proposes reforms to global finance. They were designed to make the system fairer, more inclusive, and more responsive to the climate crisis and the needs of developing countries. This idea has been led by Mottley, who took office in 2018. It emerged as she began restructuring the terms of her country’s debt to incorporate climate risks.
Since then, the Bridgetown Initiative has been endorsed by global leaders such as France’s president, Emmanuel Macron, and international organisations including the International Monetary Fund (IMF). It has also been a prominent topic in discussions at global conferences such as the UN’s COP climate change summits.
The Bridgetown Initiative has so far pushed for concrete reforms, in line with similar initiatives by the French government, as well as nations of both the Vulnerable Twenty and the G20, among others. However, experts consulted by Dialogue Earth are in agreement that contemporary geopolitics presents major challenges.
“Bridgetown is an effort to reimagine international financial institutions as policy-making bodies to strengthen economic resilience,” says Noah Zucker, a professor and researcher of the political economy of climate change at the London School of Economics. “It arises from the explosive level of debt in emerging and low-income economies.”
The initiative is nearing its third anniversary at a time of continuing debt stress for developing nations. As of 2024, 62 countries were classified as being either at high risk of debt distress (unable to repay debts on a sustainable basis) or already experiencing it. Most countries in Africa and Oceania are on the list, but every region of the world is represented.
Bridgetown’s first steps
Mottley devised the Bridgetown Initiative alongside the World Bank economist and former head of the Barbados Financial Services Commission, Avinash Persaud. In July 2022, they convened a meeting with academics and representatives of international organisations to discuss ideas on debt and climate finance issues in developing countries.
The meeting resulted in a proposal of three central ideas to confront a debt crisis exacerbated by conflicts, the Covid-19 pandemic and climate-related disasters.
The first idea was the facilitation of quick and easy access to money, especially in economic emergencies. To this end, the IMF was asked to provide financing without restrictive conditions and create a trust fund to support economic resilience. It was also asked to reallocate USD 100 million in special drawing rights (SDRs), a partly unused reserve asset initially allocated during the Covid-19 pandemic. In addition, G20 governments were called on to arrange the suspension of developing country loan repayments to multilateral development banks (MDBs).
Secondly, the Bridgetown Initiative called for a USD 1 trillion expansion of MDB lending, which was to prioritise the building of resilience to climate change, and the achievement of the Sustainable Development Goals (SDGs).
The Sustainable Development Goals are a set of 17 interconnected goals established by the UN in 2015, which are supposed to be achieved by 2030. They provide a detailed framework for addressing the world’s most pressing social, economic and environmental challenges.
The Sustainable Development Goals most closely linked to climate change include those on “affordable and clean energy”, including an increase in the share of renewable energy supply worldwide; taking urgent “climate action” to limit the extent and impacts of climate change; and goals to protect life on land and in the oceans.
Finally, it called for the creation of a global mechanism to raise funds for the reconstruction of any country threatened by a climate-related disaster, as well as long-term, low-interest private sector finance for action on climate change.
“Mottley connects to the international context and talks about the need to discuss the role of MDBs. They were created in a post-war context with the idea of reconstruction, but that has changed. MDBs no longer respond to the needs of developed and developing countries,” says Sandra Guzman, director of the Climate Finance Group for Latin American and the Caribbean.
Since then, the Bridgetown agenda has had two revisions, in 2023 and 2024. These reflect an evolution of the original initiative, with additional proposals.
In version 2.0, the private sector is summoned to mobilise USD 1.5 trillion per year for “green and just” transformations, to increase official development lending for the SDGs to USD 500 billion per year, and to suspend IMF surcharges for three years, among other targets.
In 2024, version 3.0 proposed the creation of new international taxes on wealth, shipping, aviation and fossil fuel companies to feed climate change funds. In addition, it called for a review of the methodologies of international credit agencies, and for all public and private debtors and creditors to introduce natural disaster clauses.
“Some of the original proposals were questioned by some low-income countries as being less relevant to them,” Michael Jacobs, a professor of political economy at the United Kingdom’s University of Sheffield, tells Dialogue Earth. “Barbados listened and changed some things as a result. This indicates that this is a living process, not just a statement trying to influence the agenda.”
Achieved reforms
In addition to helping to put the climate finance debate on the global agenda, the Bridgetown Initiative has been partly responsible for pushing for concrete reforms in international organisations.
For example, in 2022 the IMF launched the USD 40 billion Resilience and Sustainability Trust Fund (RST), which finances reforms to promote climate resilience in developing countries. By 2024, 18 RST programmes worth a total of USD 8.4 billion had been approved. This money was drawn from the reallocation of special drawing rights – as requested by the Bridgetown Initiative.
Among developed countries, much of the focus has been on reforming multilateral development banks. In 2022, shareholders mandated the World Bank’s management to reform the institution’s mission, operations and finances. It was dubbed the World Bank Evolution Roadmap. In addition, the G20 has established a roadmap to make these banks “better, bolder and bigger”, which the banks have endorsed. This roadmap is now in the process of implementation.
Another Bridgetown proposal that has advanced is climate-resilient debt clauses. These contractual provisions allow debt repayment to be suspended when the country in question suffers a shock, such as an extreme weather event. They were first introduced by Grenada and Barbados, and several MDBs also introduced them in some debt contracts.
Dialogue Earth consulted Rishikesh Bhandary, deputy director of Boston University’s Global Economic Governance Initiative in the United States. He says Bridgetown has entered a policy debate that includes many such proposals, some with longer track records: “They all share the diagnosis of the financial architecture to drive the transformation of economies towards climate resilience.”
The other initiatives Bhandary refers to include: the Vulnerable Twenty’s 2023 Accra-Marrakech Agenda, which proposes transforming the international financial architecture and addressing the debt crisis in relation to the climate; the 2023 Paris Pact for People and Planet (4P), which proposes a more effective financing policy; and the 2024 Antigua and Barbuda Agenda for Small Island Developing States, which pushes for resilient economies and scaling up climate action.
Meanwhile, the UN’s Loss and Damage Fund was approved and launched in 2023. This financial mechanism was conceived to assist countries most vulnerable to the effects of climate change, especially those experiencing losses and damages beyond their adaptive capacities. However, this fund – hailed as a breakthrough by the Bridgetown Initiative – has only received USD 495 million in contributions so far.
Aside from the Loss and Damage Fund, the UN approved a new annual target of USD 300 billion for global climate finance at its 2024 climate change conference, COP29 in Azerbaijan. While this figure falls far short of expectations among developing countries, Guzman is hopeful: “They asked that the number have quality, as well as quantity, referring to capital and transaction costs and debt. That’s where the Bridgetown narrative played an important role.”
The next challenges
Ritu Bharadwaj, director of climate resilience, finance, and loss and damage at the International Institute for Environment and Development, acknowledges that funding for developing countries remains scarce:
“Bridgetown has generated global debate and has evolved to include broader parameters. What is still missing, however, is a structured format and a clear [proposal for the] international architecture to translate this momentum into scaled-up and accessible financing for developing countries.”
For Noah Zucker, Bridgetown has forged some positive developments: “It has been quite successful in changing the terms of the debate and there have been some marginal changes.” He also cautions against expecting major reforms in so few years, because “substantial changes were sought from how [international finance] had operated in the past.”
A key challenge for Bridgetown is how to respond to and capture the diverse set of needs that developing countries haveRishikesh Bhandary, Global Economic Governance Initiative deputy director, Boston University
These experts are in agreement that the next few years will be difficult for the Bridgetown agenda. The United States government is opposed to reforming the global financial system, according to an internal UN document accessed by Reuters. Furthermore, the country’s treasury secretary, Scott Bessent, has publicly questioned MDBs’ work on climate change initiatives.
“A key challenge for Bridgetown is how to keep the focus on ambition and navigate the political uncertainties we are currently experiencing, in a way that responds to and captures the diverse set of needs that developing countries have,” says Bhandary. “This is difficult to achieve and requires careful balancing.”
Jacobs thinks there are still spaces where the Bridgetown Initiative can exert influence, such as UN climate negotiations. Building on COP29’s USD 300 billion outcome, countries must now develop a roadmap for expanding this annual funding goal to the number originally called for by developing countries at the summit: USD 1.3 trillion, by 2035.
“Depending on what the roadmap says”, Jacobs adds, “if it has an ambitious agenda for reform of the international architecture, Bridgetown can be said to have succeeded, moving from being a Barbados initiative to a legitimate international initiative.”
