A way forward for climate talksAs negotiations begin in Doha, experts say one way to make progress is for the rich to finally fulfil their climate finance promises to the poor.
This was to be the first, confidence-building step on the road towards the bigger promise of a Green Climate Fund distributing 100 billion dollars a year by 2020 to help developing countries reduce emissions and adapt to unavoidable climate change.
The problem is rich countries have not kept their promises, say academics from Brown University in a report published today by the International Institute for Environment and Development (IIED) as the latest round of climate negotiations begins in Doha, Qatar.
Among the unmet pledges: donor commitments have fallen short by over four billion dollars; donors have handed over only a fraction of the funds; they are charging interest on a majority of the funds; they have not provided transparent information to prove that the funds are “new and additional”.
“Particularly disappointing has been the unwillingness of donors to fund the most urgent adaptation needs of the 48 poorest countries through the Least Developed Countries Fund,” report co-author David Ciplet told Allianz Knowledge. “Only roughly 500 million dollars has been directed to this Fund, which is a fraction of what is needed. People in the LDCs are five times more likely to die from climate-related disasters than people in the rest of the world.”
The development charity Oxfam is equally concerned, releasing a briefing titled “The climate ‘fiscal cliff’”, which warns that no donors have committed funds for the period 2013 to 2020, leaving vulnerable countries facing a huge drop-off in funding.
1. Transparency is weak. Although some donors improved in 2012, it is still difficult to judge when and how they will fulfil their pledges. Of countries that submitted reports, Switzerland topped the Transparency scorecard, the EU was mid-table, the U.S. last.
2. Donors not contributing their fair share. So far 25.9 billion of the 30 billion dollars has been pledged and more should be coming from the EU, U.S. and others, but most countries have not contributed a “fair share” according to their relative wealth and emissions. Norway and Japan have committed several times their fair share; all other donors have not.
3. Adaptation losing out. Fast-start finance was supposed to strike a 50-50 balance between mitigating emissions and adapting to climate change impacts. But only about 20 percent of funds have been earmarked for adaptation projects. “Adaptation is seen by many as having mainly local benefits,” explains David Ciplet. “Mitigation, alternatively, is seen as protecting a global public good, and thus has received more attention and financial support.”
4. Loans not grants. Over half of all funds come with demands for repayment with interest, inappropriate for adaptation, especially in Least Developed Countries. Some donors give grants exclusively, but not the largest contributors—the U.S., the EU, Japan and Canada.
5. Funds bypass the UN. Despite the Cancun Agreements promising more democratic, transparent, multilateral funding as desired by developing countries, only two percent of fast-start finance has gone through the Special Climate Change Fund, Adaptation Fund and Least Developed Countries Fund. The rest is channelled through bilateral agreements, the World Bank and other facilities, giving donors more control.
6. Funds not new? Recipient countries are concerned that climate funds are being diverted from existing development programs. Poor transparency makes it very difficult to tell.
7. Vulnerability not addressed. The countries most vulnerable to climate change are supposed to be prioritised as they are already suffering from climate change. But once again poor transparency stymies efforts to see where countries are directing their funds, although it’s clear that the Least Developed Countries Fund is underfunded.
8. Pledges not delivered. Most donors have not disclosed how much of the promised fast-start finance they have actually delivered. Bloomberg New Energy Finance estimates that by September 2011 only 11.3 billion dollars had been delivered.
Yet a breakthrough in the deadlock over what must be done after the first phase of the Kyoto Protocol expires at the end of 2012, is more urgently needed than ever: the World Meteorological Organisation recently reported that levels of all three major greenhouse gases—CO2, methane, and nitrous oxide—hit record highs in 2011, threatening more extreme weather.
And it is not just academics and green groups who recognize the danger. A week ahead of Doha a coalition of the world’s largest investors, including the Institutional Investors Group on Climate Change (Europe) and Investor Network on Climate Risk (North America), warned in an open letter that further delay implementing ambitious climate and clean energy policies would “increase investment risk for institutional investors and jeopardise the investments and retirement savings of millions of citizens.”
In the aftermath of superstorm Sandy—to which Businessweek memorably responded “It’s Global Warming, Stupid”—the letter called on the world’s largest economies to eradicate fossil fuel subsidies, enhance carbon markets, and commit to legally-binding emissions cuts.
For their part, the researchers from Brown argue for channelling more funds through the UN Framework Convention on Climate Change, and redirecting fossil fuel subsidies towards mitigation and adaptation programs. “Wealthy countries should step up in Doha to provide the three billion dollars needed to fund the National Adaptation Programmes of Action (NAPAs) in the LDCs. This would be an important gesture of goodwill and trust-building,” says David Ciplet.
Looking further ahead, the focus must turn to filling up the Green Climate Fund which up to now has been “an empty shell”, according to Oxfam. “We are now entering what is known as the ‘scale up period’ when we are supposed to be moving towards 100 billion dollars a year,” notes Ciplet. “Given this, concrete financial commitments in Doha from wealthy nations will be essential.” Otherwise the fear is that the Green Climate Fund will just become another list of broken promises.