Eco Digital Blog

CLIMATE FINANCE: UP AND NOT DOWN!

To our freshly arrived negotiators, get ready for a major wake up call (or at least a loud and not particularly polite noise) on finance, when the countries most vulnerable to climate change will be rightly asking: what happens when Fast Start Finance runs out at the end of this year?

 
And what happens now that we know Fast Start Finance (the money pledged between 2010 and 2012) was mostly a false start? Yes, ECO did the maths and estimates only 33% of FSF was “new” money (that is, additional to existing, pre-Copenhagen pledges), and around 24% additional to existing aid promises. Only one-fifth of finance was spent on adaptation, and less than half was available as grants. It seems developed countries need to re-learn some basics about climate finance. Which part of “new and additional, predictable, and adequate in relation to rapidly spiralling needs...with balanced allocation between mitigation and adaptation” are they failing to understand?
 
And to those who need illustration of “spiralling needs”, please count the unprecedented number of climate related disasters in 2012 which - along with sea-level rise, and the gradual but deadly effects on agricultural and
fresh water systems - mean that the bill from carbon pollution just keeps going up and up. If we are to tackle the consequences of current inaction, the hundred billion annual figure promised before Copenhagen is now looking implausibly small.
 
Here in Doha, we are facing a “finance cliff” with fast start finance ending just at the point when we need ramping up. ECO is concerned that many developed countries have arrived in Doha unwilling to pledge new resources. For vulnerable countries this is a daunting prospect, and will hugely reduce their trust that these countries intend to make good on their $100 billion a year by 2020 promise. By holding back on money they have promised, developed countries are shooting the 2015 global deal in the foot.
 
Luckily, ECO is giving countries two extra weeks to do their homework on how to:
 
SCALE UP – ECO will not accept Doha as a success without reassurance that climate finance will go UP, not down and especially not off a cliff in 2013. For 2013-2015, developed countries should at least double the amount delivered under Fast Start Finance levels and channel US$10 to 15 billion to the Green Climate Fund.
 
PROGRESS ON SOURCES – To sleep tight, ECO needs to see a scaling up of climate finance to meet the $100 billion per year commitment by 2020. Advancing promising new sources of finance will be crucial to provide
predictable and scalable finance and needs genuine commitment by developed countries. ECO supports the recommendation on the Long Term Finance Work Programme to establish a high-level experts group across the ICAO, IMO and UNFCCC secretariats to examine finance-raising options from a fair carbon pricing mechanism. ECO will give top grades to the EU member states who allocate at least a quarter of the upcoming Financial Transaction Tax to the Green Climate Fund.
 
STRENGTHEN MRV – False Start Finance has taught ECO the tricks for how to count existing aid as new and additional. ECO is now looking forward to learning how to do things the right way. Parties now need to agree on MRV reporting formats on climate finance that help assess whether the promises are “new and additional” finance, and ensure “balanced allocation between adaptation and mitigation”. It is high time that the reporting is transparent, verifiable and clarifies what is “real” and “legitimate” climate finance.
 
HIGH-LEVEL POLITICAL PROCESS – Finally, ECO intends to be an ongoing and relentless nuisance, by insisting on a high level political space for negotiations on finance, if and when the AWG-LCA comes to an end after COP18. In whatever context negotiations continue, finance MUST NOT be relegated to the status of a “technical” issue. There is nothing technical about being on the receiving end of climate disaster. Lives and livelihoods are at stake, and we expect this issue to be treated with the political seriousness it deserves.
 

 

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President Obama: We Hope for Change

In his victory speech after being re-elected to a second term, President Obama swelled the hopes once again of people around the world who care about climate change when he said, "We want our children to live in an America that is not burdened by debt, that is not weakened by inequality, that is not threatened by the destructive power of a warming planet." Those hopes continued to swell when in a press conference a few days later, he responded to a question from the media on climate by saying that he planned to start "a conversation across the country..." to see "how we can shape an agenda that garners bipartisan support and helps move this agenda forward...and...be an international leader" on climate change.  President Obama appears to understand that climate change is a legacy issue that was not adequately addressed during his first term in office.

The question therefore has to be, what next? In his second term, will President Obama deliver the bold action needed to reduce the threat of climate change to the US and the world, by shifting the US economy towards a zero carbon future, and making the issue a centerpiece of US foreign policy? In the aftermath of superstorm Sandy, and the drought, wildfires and other extreme weather events that have afflicted the US over the last year, it is clearly time for President Obama to press the reset button on climate policy, both nationally and internationally.
 
First, the world needs to hear from the President and his negotiating team here in Doha that they remain fully committed to keeping the increase in global temperature far below 2 degrees, that it is not only still possible but essential to do so, and that the USA is going to provide leadership in this collective effort.  
 
The administration should then make clear how it will meet its current 17 percent reduction target. While US emissions are decreasing slightly – both as a result of the administration's policies on renewable energy and vehicle fuel economy standards and because of sharply lower natural gas prices that have reduced coal use for electricity generation – it is unlikely that without additional regulation or legislation that the US will meet its 2020 target. The delegation should also clarify what the Obama Administration will do to put the US on track to the near-elimination of emissions by mid-century called for by the scientific community.  
 
Finally, delegations need to hear that the US remains committed to meeting its fair share of the Copenhagen pledge of mobilizing $100 billion in climate finance per year by 2020, as well as which innovative finance options the administration is prepared to support to get there.
 
These four steps would go a long way to reset US climate diplomacy. They would show that instead of dragging the world down to the level of what is (not) possible in the USA, President Obama and his team are going to pull the US up to what the science and the world demands to avoid catastrophic climate change.  
 
One last point: every coach knows that when you find your team down by several goals at half-time, a change in your game plan may not be enough; it may also be time to make some substitutions to the players on the field.
 
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The Pathway to Ambition

Is equity really the pathway to ambition? ECO is here to say that it had better be. Without equity, nothing else will work. Which is to say that nothing else will work well enough. Without equity the story of the low carbon, climate resilient transition will be a story of “too little, too late.” And as the scientists are anxiously telling us – see, recently, the World Bank’s Turn Down the Heat report – this is a story without a happy ending.

Let’s admit the public secret that we all already know – equity will either be shaped into a pathway to ambition or inequity will, assuredly, loom before us as an altogether unscalable wall. We can see how this would happen. The US – while insisting that it’s pushing bravely past the sterile politics of an obsolete North/South firewall – has managed to purge CBDR (and RC) from all official texts. But to what effect? For an overwhelming majority of Parties, absence of new equity language affirms the obvious. The Convention language applies. Has the US noticed that actions provoke reactions?

The head of the US delegation has rejected the Annexes as “anachronistic,” and has gone on to call for “the differentiation of a continuum, with each country expected to act vigorously in accordance with its evolving circumstances, capabilities and responsibilities.” It’s a good idea, though alas it suffers by its association with the US's aggressive – and often abrasive – drive to destroy 1997’s Kyoto Protocol. Coming into Doha, ECO can only wonder if this unfortunate picture is about to change. With President Obama’s re-election, there’s a chance to reset Washington’s international strategy, tactics and personnel. There won’t be many more chances before 2015.

Meanwhile, the position is obvious. The ambitious, global principle-based regime that we need can only come by way of a creative elaboration of the Convention’s principles, CBDR/RC first among them. So, yes Mr. Stern, we need a dynamic approach, one that takes the evolving realities of this mad and dangerous world into full account. Which is to say that we’re not going to get it without an approach to dynamism that is widely accepted as both procedurally and substantively fair.

Where does this leave us? With a desperate situation in which all wealthy countries must quickly do their part to close the short-term emissions gap. This, fortunately, is a goal that can be agreed politically and legally within the bounds of the existing accords and treaties, but only if Parties negotiate in good faith. In particular, existing commitments – to mitigate and to support the mitigation and adaptation of others – must be achieved. Beyond the short-term, a new accord will be needed, a more challenging accord that we’re not going to get without a vocal and political commitment to make “equitable access to sustainable development” into something real. This, in turn, will demand a robust negotiation on creative, principle-based approaches to sharing the long-term global costs and opportunities of mitigation and adaptation.

There’s still time to launch the ADP with high and cooperative ambitions. But, frankly, there’s not much time left. What’s needed now is courage and real statesmanship. The Obama Administration, for its part, has to begin negotiating for a regime that’s fair enough to actually work. And the G77’s negotiators must do better as well. When BASIC Ministers, writing in their September declaration, called for “an enhanced global effort to be implemented after 2020, under the UNFCCC, which would respect the principles of equity and common but differentiated responsibilities and differentiation between Annex I and non-Annex I Parties,” they weren’t exactly signalling an openness to fresh and expansive approaches to CBDR/RC. Given the current situation, their reticence was understandable, but it didn’t suggest the kind of leadership that we’re going to need in coming years. Perhaps, after Doha, such leadership will finally be on the agenda.

Difficult negotiations lie ahead. How can they best be organized? Equity is quite important enough to get its own work stream. But if this is not to be, we’re confident that either the Vision or Ambition workstreams – or both! – will be more than willing to open their doors to the equity discussion. One way or another, the discussion is going to have to take place, and no one should be foolish enough to believe that, by attempting to push it aside, they’re doing the hard and thankless work of true realism.

Here’s some free advice: Let’s discuss principles first, and having agreed on the keystones (hint: the indispensable points are ambition, capacity, responsibility and the sustainable development rights of the poor) we’ll be in a position to move forward to a practical, non-nonsense conversation about indicators and comparability. We’ll be in a position to move, that is, down the equity corridor – or, if you prefer, up the equity ladder – from principles, by way of indicators, to coherent and reciprocal agreements.

This situation will not be quickly resolved. But there’s not going to be any real trust, or momentum, until equity is a recognized, respected, and foundational part of this negotiation. And – does this still need to be said? – until there’s substantive progress on the finance front as well, for this and only this can translate rhetoric and good intentions into believable action. The good news is that both of these breakthroughs are ours for the taking.

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Bridging The Gulf

 

From one aggressively air-conditioned conference centre to another... Only three months ago, ECO was sitting in tropical Bangkok pondering the outcome of COP18, and now here we are on the edge of the desert. But what a change three months can make. A new Chinese leadership, a new mandate for US President Obama, elections in Ukraine, Georgia, Lithuania and Venezuela, as well as many, many more extreme weather events, resulting in severe loss and extensive damage. But will such monumental shifts in global politics affect the outcome in Doha?
 
Despite high hopes, Doha was never going to be a cup final. Durban, marked out for the grand ‘huddle’, gave the negotiators new political instructions. Doha must prepare the roadmap  for 2015. ECO would like to remind delegates this doesn’t mean you can kick back and snooze till then. Remember – if you snooze, you lose! Too much is at stake. The final saga of the Kyoto Protocol rolls on, the LCA requires successful closure and a work plan for the new Durban platform for both a 2015 deal and near term ambition must be established, along with progress under the subsidiary bodies.  Doha must not renegotiate Durban. We must only move forward.
 
Bismarck once said, “Politics is the art of the possible”, and ECO firmly believes a deal is possible in Doha.  But deft diplomacy will need to be at the heart of that deal. ECO waits with bated breath to discover how the COP Presidency will lead Parties to deliver a Doha package.
 
ECO is delighted that Australia has set a constructive tone going into Doha, with their intention to sign up to the second commitment period of the Kyoto Protocol (albeit with low ambition and those pesky conditions attached). If only other brollies would follow suit. New Zealand’s intention not to sign up to the second commitment period is a scandal. How can countries like New Zealand call for a legally binding agreement in 2015, when they’re not even prepared to put their own skin in the game?
 
ECO still believes that  the EU will put a target on the table that results in real mitigation, since it already achieved 20% reduction in 2011. Perhaps the Polish delegation would like to consider this, given they’re prepping to host the next COP…. But ECO is prepared. We even packed our souvenir “I ♥ KP” t-shirts from Durban, no doubt much to the delight of many developed country delegates…  An amendment in Doha to the KP that secures environmental integrity by closing down the loopholes will be critical to opening up a productive outcome on the LCA. But ECO cannot ignore the early escape from the Kyoto framework by Canada, Japan and (will they? won’t they?) Russia – these countries are neglecting their obligations and their own national interest.
 
For many, the successful closure of the LCA track will be the political hot potato.  In addition to adopting the Kyoto amendments, there remains much work to be done, in particular on finance and MRV of developed country actions. Reassuring developing countries that progress is being made on long-term finance and that there will be a ramping up of finance flowing post 2012 will be crucial to addressing their concerns about closing the LCA. This is also indispensable to help them with ambitious climate action.   
 
ECO thinks the G77 proposal on MRV under 1(b)(i) hits the spot. Ensuring greater transparency and accountability of developed country mitigation actions will help to restore confidence amongst G77 and those signing up to Kyoto (i.e. the majority of the world’s people!) that the Annex I countries not subject to the KP rules will make comparable efforts.
 
And finally to the ADP.  ECO would like to remind Parties that for 2015, equity and ambition are two sides of the same coin, and securing a negotiation on this will be vital in addressing the concerns from developing countries and concluding the LCA. Likewise on short-term ambition, ECO looks forward to hearing from Parties which action they will take to ramp up efforts in the immediate future. One such concrete measure is that more countries put forward pledges, particularly the COP host and its neighbours. We need to build bridges from the era of burning coal, oil and gas to the cleaner and brighter future of renewable energy access for all, and a safe climate.
 
The global shifts in politics and economics we are witnessing are having profound implications on both the need for and dynamics within the UNFCCC negotiations.  The gulf to bridge between lofty intentions and credible action is wide. Whilst the political will is still lagging amongst many critical emitters, the weather is turning (metaphorically and meteorologically). Success in 2015 will require fundamental shifts in the real and political economies of many countries. Doha must build on and move forward from Durban to ensure we still have a cup final worth fighting for.
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CAN Classifieds

Training available: Advanced deception in the 21st Century.  

Canada invites you to a workshop on how creative accounting can enable you to claim greenhouse gas reductions and decieve domestic and international audiences alike.  All inquiries to Harper Consultants Ltd.

For sale: Cooking Your Books: 100 delicious recipes.
Umbrella Publishing Group. Be in quick as supplies are limited, unlike our carbon credits.

Training available: Deficit reductions the easy way.  Is your carbon deficit looking worse than your financial one?  New Zealand and Canada provide you with basic and advanced training in balancing the books while keeping polluters happy.

Cheating 101: Basic introduction to LULUCF rules and effective use of the flexible mechanisms.

LULUCF Accounting 201: Advanced use of LULUCF rules, how to protect your agriculture sector.

Advanced rules 301: Hiding emissions in QELRO rules, target overshoot, advanced deception techniques, strategic use of the flexible mechanisms.

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Keep up your end of the bargain, Parties.

In Durban, Parties agreed to a package – the adoption of a second commitment period of the Kyoto Protocol, a successful conclusion of the LCA, urgent action to close the pre-2020 mitigation gap between the 2 degrees goal and the collective pledges now on the table, and collective movement toward a fair, ambitious and binding agreement in 2015. Parties must honour this political bargain.

Let's start with the KP. Those trying to get another bite of the negotiation cherry by dragging out submitting their carbon budgets (QELROs) have to understand that this will be perceived as acting in bad faith. Australia – ECO remembers the brinkmanship with your QELRO last time. So for you, as well as New Zealand, Ukraine and others on the fence on the Kyoto second commitment period, ECO demands to see your QELROs up front. And, of course, just any old KP second commitment period won’t suffice. We must have a robust, ratifiable agreement that respects the original intention of the KP to raise ambition and create real environmental integrity. The AOSIS and Africa Group proposals will facilitate this endeavour. Effectively eliminating surplus AAUs and ensuring the environmental integrity of the CDM is also essential – you can’t have your cake and eat it too.

On to the LCA. There are a number of elements that jump to the head of the queue in importance. We need a positive decision on finance – including ensuring that the discussion on scaling up Long Term Finance following the report of this year's work programme, among others, has a home in 2013 and beyond. And who needs an empty fund? We hear that the EU, Australia, Japan and Canada already have budgets they could allocate. Don’t be shy!

Enhanced post-2012 climate finance is essential to enable developing countries to implement low-carbon development strategies and facilitate desperately needed adaptation. Deciding to hold back on finance until the last moment – or not coming forward at all in Doha – will undermine confidence and faith in moving the climate negotiations forward.Japan, Canada, Russia and the United States, do not think that by jumping overboard from the Kyoto Protocol that you’re diving into balmy waters. You're still on the hook to do your share of closing the gigatonne gap, by putting forward quantified economy wide emissions reductions AT LEAST as stringent as the QELROs of Kyoto Protocol parties, and using common accounting to an equal standard as the Kyoto Protocol. We also expect to see your QEERTs well before Doha.

On these and the other LCA issues, it is essential that the LCA Chair, and the spin-off group facilitators, be supported to develop text proposals to put forward in Doha. Finally, on the ADP, you all need to do your homework between now and Doha on the ADP work programme. Doha must agree to a plan of work, including a clear timeline and milestones. So let’s take inspiration from our setting here in Bangkok – these milestones can incorporate a period of “contemplation” on some issues. How equity and CBDRRC will apply in the 2015 protocol will require a work stream that allows discussion and agreement on principles before being applied to all of the elements that will constitute the final deal. On other elements, including ways to urgently enhance short-term ambition, Parties must pick up and start negotiating immediately in Doha and beyond.

Leaving the workplan “loosey goosey” will result in a repeat of the Copenhagen tragedy. Rather, parties must agree on specific issues to manage each year while ensuring compilation text by COP19, complete negotiating text by COP20 and draft a fair, ambitious and legally binding protocol to be circulated by May 2015.This is indeed an ambitious agenda for Doha. But it is the least the peoples of the world demand, and expect their political leaders to deliver at a time when the impacts of climate change – and the costs in terms of both human suffering and economic development – are more evident than ever.

Aren’t You Lowering Ambition, Japan?

Japan will soon make a decision on new energy and climate policy in light of the Fukushima nuclear accident. ECO supports the voices of the majority of Japanese people, who say, “No, thank you” to nuclear. Nuclear is not a solution.

However, we realized with surprise, Japan considered that mitigation is not possible without nuclear. Believe it or not, the projection of GHG pollution in 2020 for Japan is from 0% to -7% from 1990 levels when Japan chooses a nuclear-free future. This is nearly at the level of the first commitment period Kyoto target (-6%)! Is nuclear really a mitigation solution? ECO believes NOT. Japan could surely reduce CO2 while reducing its dependence on nuclear. Rather, it’s better and faster to realise a low-carbon society through shifting the tremendous nuclear investments to renewables and energy efficiency.

ECO is anxious to know whether Japan intends to discuss raising ambition as a matter of urgency. We have no time to delay. No room to lower efforts. In the last session in Bonn, ECO urged Japan to reaffirm its 25% reduction target by 2020 in Bangkok. Your silence is deafening. So, take the ambition discussion back home, identify any possible reduction potentials other than nuclear (here's a preview – you will find a lot) and come back with an ambitious target. Through that, Japan could make a sizeable contribution to Doha and to the world by transitioning toward a safe, low carbon economy. The international community is watching you.

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And a note to Japan: contrary to what you stated in Sunday's 1(b)(i) workshop, double counting of credits IS a VERY big problem. A 1-2 GtCO2e bit problem, according to the UNEP Bridging the Emissions Gap Report, “if double counting of emissions reductions by developed and developing countries due to the use of the carbon market is not ruled out, and if the additionality of CDM projects is not improved." ECO reminds Japan that they noted (here it comes again) – with grave concern – the existence and size of the gap. Japan needs to do its part to close it – and avoiding double counting is a an important part of that.

 

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Finally, Finance?

ECO is heartened to have heard that a group of developed countries is considering putting concrete numbers on the table for long-term finance in Doha. In the last year of Fast Start Finance, and with few firm commitments for finance from 2013 onwards currently on the table, this is none too soon. Substantial new and additional climate finance commitments could really help to give a boost to the negotiations going into Qatar.

As ECO has long argued, such commitments would give developing countries some needed reassurance that climate finance is not about to fall off a cliff, but rather start the steady climb towards the US$100 billion per year promise made in Copenhagen and Cancun. Rhetorical reassurances during the negotiations are no match for concrete numbers committed on paper.

Let’s hope that more developed countries reach this enlightened conclusion before Doha. There will be nowhere for them to hide if a group of countries makes a pledge, while they turn up empty handed.

But ECO would also hope that developed countries have learned some lessons from the Fast Start Finance experience, and apply them as they consider their pledge. Don´t forget that ECO has a beady eye for creative accounting tricks that may artificially inflate finance pledges that are actually not new and additional. The potential for trust-building could be undermined if developed countries are seen to be counting spurious finance flows, especially from private finance.

One kind of pledge that is guaranteed to win plaudits from developing countries and ECO alike is a serious commitment to the capitalisation of the Green Climate Fund. No one wants to see a third COP in a row that leaves the GCF as an empty shell. Now is the time to give the political signal of financial support for the fund over the coming years.

After the delays in the Board’s first meeting, a round of pledges to the Fund would be like a shot in the arm to this nascent institution. It would spur efforts to get the Fund up and running and disbursing climate cash to those who need it most as soon as possible. At the end of Bonn, ECO insisted that a sum of $10-15 billion of public finance by 2015 is needed. What better way for developed countries to show they mean business in the negotiations over this period than to take our hint?

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Get Technology's "Boots On the Ground" Grounded

We stand at the precipice of what could be the final stroke of the LCA at COP18 in Doha, and the conversation is turning ever more to the question of how political decisions for various elements of the LCA that have not been fully resolved will be handled post-COP18. ECO sees that the discussion on technology transfer, which cuts across mitigation and adaptation, provides a stark view of what's at stake if the LCA's closing is not properly done, in the light of the sometimes yawning gap between the understandings of developed and the developing countries. 

If you mark the IPCC Assessment Report 1 (1990) as the starting point, the discussion on technology transfer has been ongoing for more than two decades. That’s a lot of work to sit idle if the Technology Mechanism suddenly faced a lack of support, and a staggering missed opportunity to close the mitigation gap and address the growing need for climate adaptation.

As it now stands, the Technology Mechanism lacks full funding even on a short-term basis, its governance and reporting structure are incomplete, its linkages with other bodies inside the Convention are hampered by the chicken/egg dilemma, its cross-cutting support for NAMAs and NAPAs/NAPs is uncertain and ill-defined, and the conversation on what is likely the most political decision of all – how priorities are to be set within the TEC and CTCN – has barely been broached, if at all. Undoubtedly, some of these issues will be addressed and hopefully resolved in Doha, but some of them have little or no hope of finding true resolution in that timeframe, and some are likely to require ongoing political guidance.

As for funding, which must stand above all other issues in terms of a critical path forward, the organisation requested by COP17 to financially support the early operations of the CTCN failed to be chosen, and CTCN support disappeared with the nomination.

So how do we avoid leaving the CTCN – the technology mechanism's "boots on the ground" – up in the air?

As the shaman of Pride Rock, Rafiki, says: "It is time." Let's get those boots grounded with at least five years of interim public funding and let's go kick some adaptation and mitigation bootie!  Oh, and by the way, maybe we might also find a concrete way to ensure appropriate follow-up care for all the outstanding technology transfer and other LCA issues that risk being stranded?

 

Ace the AC

ECO congratulates the Adaptation Committee (AC) members for their selection and welcomes them to Bangkok, where the first AC meeting will take place. The AC has been mandated with the very important task of promoting the implementation of enhanced action on adaptation in a coherent manner, and supporting the COP in taking appropriate decisions on adaptation. ECO would like to encourage all members of the AC, both from developed and developing countries, to work as ONE TEAM and with a true spirit of collaboration and cooperation.

In its first meeting, the AC’s members will focus on developing its three year work plan and its modalities. ECO requests that the Adaptation Committee include the following priority issues. The AC should:

 - consider the linkages and stimulate coherence among the various adaptation institutions within the UNFCCC, including the Standing Committee and Green Climate Fund

 - develop an overview, identify gaps and establish/strengthen regional centres and networks to address those gaps

 - facilitate discussion among Parties to explore ways to effectively address regional, cross-border and common sub-regional adaptation issues through promoting ecosystem- and community-based approaches.

Other issues to  be to reflected upon include the guidelines and modalities for the National Adaptation Planning (NAP) process for non-LDC countries and national institutional arrangements for adaptation.

Outreach to the wider community and public is an important part of the AC’s job description. Organizing a biannual adaptation conference with diverse stakeholders to create a platform for sharing new knowledge, practices and experiences could be explored. Most importantly, the AC will have to elaborate its linkages with ongoing external processes, like the development of a new Disaster Risk Reduction Framework, SDGs and MDGs – all of which have an equal 3 year timeline and will be relevant to further elevate the adaptation agenda around the world.

Lastly, ECO offers its full support to the Adaptation Committee and wishes its members all the best for this exciting work!

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