Tag: climate finance

This has been what might be called a year from climate hell with floods, droughts and scorching temperatures across the globe.  But those steering the debate on climate

financing are slow to get the point. As now envisioned, climate funding will bypass the most vulnerable.   

The vast majority of the grossly inadequate existing flow of climate finance is focused on mitigation.  For example, only 7.45% of major public funds reported at
climatefundsupdate.org are for adaptation.   

And there’s not much evidence to suggest that this basic pattern will change with fast-start finance.  Adaptation and the needs of the most vulnerable are still too often the forgotten step-children.  

Going forward, ECO isn’t suggesting that there’s too much financing for mitigation – au contraire!  But it is vital that adaptation gets its fair share of attention and funding.  A new global climate fund is just the place to make this happen. 

To ensure that the most vulnerable benefit from adequate, predictable and sustainable financial contributions, we propose that a fair pre-allocation of funding for adaptation is crucial.  

Specifically, the finance text should
ensure that at least 50% of overall funding counted against UNFCCC commitments should be dedicated to adaptation, and at least 50% of money channeled through the new fund should be allocated to adaptation. 

These proportions may need to be revised over time, but this is the balanced approach we should take now.

And if we don’t, surely it will be a recipe for disaster for those who are already the hardest-hit. 

As a low-key session in the all too familiar confines of the Maritim draws to an end, the pressures, ambitions and disappointments of Copenhagen are fading into the background. Green shoots are appearing in the LCA finance negotiations, where the dry discussions of institutions, functions, accountability and authority are turning into a rich and productive engagement. 

Largely stalemated since Accra almost two years ago, polarized positions are giving way to an open discussion and perhaps real movement towards agreement. ECO noted the Philippine delegation responding positively to the US proposal on the outline of a governance structure.  This is the clearest indication to date that the US may finally be willing to engage constructively in setting up a climate fund in accordance with contemporary best practices in global governance.

However, the history of international negotiations is littered with hard-fought but under-resourced funds and institutions. So while we celebrate progress towards agreement on the institutions, we can’t lose sight of the need for agreement on the innovative sources of public finance that can generate financing at the scale required, the need for developed countries to step up and take the lead with truly ambitious emissions reduction efforts, and for near-term global emissions peaking and reductions to levels that will ensure our children and grandchildren a blossoming planet.

Making progress on long-term finance is key to unlocking progress on an ambitious package in Cancun.  The upcoming Advisory Group on Climate Finance (AGF) workshop is a chance to clarify questions about the role of the panel and how it connects with the UNFCCC negotiations. Last September, UN Secretary-General Ban Ki-moon's first proposed a high level panel at the UN General Assembly.  Early this year, the Secretary-General followed through on his commitment.  In establishing the AGF, he set a path toward agreement on sources of scaled up financing under the UNFCCC to meet the need for climate action in the developing world.  The panel brings together high-level finance officials and Heads of State, who normally aren't closely engaged in the climate negotiations, to make recommendations on climate finance to the UNFCCC. Nevertheless, ECO believes that we can't leave the discussion on sources entirely in the hands of the AGF until just before Cancún.  In order to get a meaningful decision in Cancún on sources of scaled-up financing, the LCA must immediately resume the discussion of innovative sources be informed along the way by the analysis and recommendations of the AGF. To jump-start this exchange, since time is very short, Parties should put the best ideas on innovative sources of public finance into the LCA text now.  These include bunkers mechanisms and/or levies, Special Drawing Rights, a Financial Transaction Tax, and international auctioning of AAUs, all backed up through national commitments to assessed contributions. And here's a special note to developed countries:  For those who might be a little reluctant to press for new and additional funding from your Treasuries each year, remember that innovative sources could provide a substantial boost to reach the annual $100 billion milestone by the end of the decade that you pledged in Copenhagen.

ECO is eagerly awaiting today’s side event at which the EU will present its preliminary report on its fast start finance pledge. Not because the report itself will bring any new information to light -- it was leaked to the press weeks ago -- but to see EU negotiators try to answer the question on the lips of NGOs and developing country negotiators everywhere . . . how exactly is EU fast start finance 'new and additional'? Other developed countries might like to attend and pick up some tips. The EU had the right idea in suggesting a report on whether they were keeping their promises. This might help make up for the fact that most EU Member States have done a pretty good job over the years at breaking long-standing promises to provide finance to poor countries, whether as aid or climate finance under the UNFCCC. The Spanish Presidency started well, collecting information on Member State pledges, but then a problem arose. The EU's commitment first made in Brussels at the December leaders’ summit did not address whether the promises they were making were “new and additional” as required by the Copenhagen Accord.  It is clear that this means over and above the target to provide at least 0.7% gross national income (GNI) in official development assistance (ODA). Climate change imposes new costs on developing countries, so new money is needed to tackle it. Instead of owning up to relabeling old some ODA pledges and then adding them to the new fast-start climate finance total, EU governments thought it best to keep quiet and hope no one noticed . . . but some did.  Failing to ensure that climate finance is new and additional to existing ODA targets takes money that would otherwise have been available for spending on schools and hospitals in developing countries, to name one example. And that at a time when budgets for essential services are already being cut in the face of economic downturn.  And we won't mention more than just this once that most countries aren't even achieving their longstanding ODA pledges. All that said, ECO welcomes the EU’s readiness to face the music in today’s side event. We hope they come clean about recycling past promises and are ready to answer questions on the scale of money going to different countries, and will detail how it will flow through bilateral and multilateral channels, as grants and loans, and for adaptation and mitigation. This is just a preliminary report, and the EU will have another chance to get it right in the annual report due at COP 16. But to provide genuine transparency, and to ensure that the US and other rich countries are held accountable too, they should seek a common reporting framework. The Secretariat could be asked to take that on and add meat to the EU’s bare bones.