Developing countries have long insisted on the need for transparent and coordinated provision of financial support, to enable independent review of the extent to which commitments are fulfilled, as well as maximise the effectiveness of the funding. Moreover, transparency is vital to ensuring that the funds are equitably distributed over all developing countries in need of support, with priority for the most vulnerable developing countries.
At present, though there have been some positive steps taken in this direction, unless ECO was not invited that magical day, there is no common framework for measuring, reporting and verification (MRV) of international climate finance that fully captures existing financial flows.
ECO was happy to hear that at the end of 2011 the European Commission proposed a new EU regulation (referred to as the “MMR” Regulation) on monitoring and reporting for EU climate finance. The MMR (yet another acronym that delegates and observers should learn by heart) will standardize climate finance reporting requirements for EU Member States. We are glad to hear that the proposal is going through the EU legislative process this year, just in time to monitor the EU’s post-2012 financial commitments for climate action.
But the MMR still needs guidance from EU Member States on key concepts and methodologies to be included in the legislation: what is meant by climate finance and in particular “private climate finance”? What is “new and additional” climate finance and how are the baselines set for measuring this? How should the MMR count the climate-relevant activities and outcomes when reporting on projects with broader objectives?
In the grand tradition of EU stakeholder consultation processes, ECO knows that its ideas will be read and considered, and so takes the opportunity to recommend that the MMR include the following:
- detailed information on where the money is going
- comparable information that can be aggregated
- sources and recipient institutions as well as the channels used need to be visible in order to keep track of the financial flow
- Also, for this process to be really transparent, it is crucial that this information be made accessible to third parties, including recipient countries and NGOs and that the reported information be quadruple-checked by independent finance experts
But all this being said, ECO would like to remind all parties that any MMR or MRV proposal does not make any sense as long as there is no finance to MMR or MRV (or whatever you want to call it). At the end of the day, we need developed countries to start pledging substantial, scaled-up climate funding for 2013 onwards. Or the MMR will be yet another empty shell.
And because ECO knows that parties want to hear more about the major MRV reform behind the obscure acronym, the ACT Alliance and CAN-Europe went to great lengths to organize a side event on the role of private finance in climate action next Monday.
ECO will definitely be there.