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The ongoing hunt for climate cash

Rich nations have made bold statements about channeling climate finance to developing countries, but concrete agreements remain elusive. As we approach the next round of UN negotiations, Jessica Brown sums up the latest developments.

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Raising and delivering finance to support the fight against climate change in both developed and developing countries is one of the most critical areas under discussion within the United Nations Framework Convention on Climate Change (UNFCCC) and will likely be a central focus of the UN-led global-warming conference in Cancún.

Finance for developing countries in support of mitigation and adaptation was established as one of the main building blocks of the Bali Action Plan, adopted at the 2007 climate-change summit in Indonesia. The parties recognise that improved access to, and provision of, new and additional financial resources is needed, and that funds should be mobilised from both public and private sectors to meet this objective.

These issues have been considered by the Ad Hoc Working Group on Long-term Cooperative Action – the body set up to facilitate discussion on implementation of the UNFCCC beyond expiry of the Kyoto Protocol – since its first session in March 2008, but no formal agreements have yet been made about how to secure the finance in concrete terms. The United Nation’s climate-change conference in Copenhagen in 2009 marked the original deadline for completion of the negotiations, but this deadline has since been extended as no legal agreement was reached.

Although it was not formally adopted, the Copenhagen Accord does provide an indication of political consensus on the general need for the delivery of finance to developing countries. The accord concretely states that developed countries should provide new and additional resources for developing countries approaching US$30 billion (201 billion yuan) for the period 2010 to 2012, and that longer-term funding should come from both public and private sources to mobilise US$100 billion (669 billion yuan) per year by 2020. The Copenhagen Accord also includes an agreement to establish a Copenhagen Green Climate Fund to support these efforts.

Several countries have since put forward proposals for the Green Climate Fund, which deal with the potential future source of funds (including proposals for new and innovative sources of finance, consideration of a specified level of funding by donor countries, and the role of the private sector). In this context, in February this year, the UN secretary-general Ban Ki-moon established a High Level Advisory Group on Climate Change Financing, with a remit to input into negotiations regarding potential sources of revenue for climate-change financing. However, the report, which came out in early November 2010, failed to reach any consensus on new sources of finance.

There remains a lack of consensus over the architecture and institutional arrangements associated with a new fund. A recent meeting in Geneva of high-ranking officials from 46 countries and the European Union aimed to further the finance discussion and to “raise awareness” of the challenges involved in developing financing measures to deal with climate change. However, it is challenging for non-participants to assess how non-negotiation talks help further the establishment of an international policy on climate finance, and no concrete details on policy proposals have emerged from the meeting.

Alongside the efforts towards an international climate-finance regime, many bilateral and multilateral funding channels are currently supporting mitigation and adaptation efforts in the developing world. The website climatefundsupdate.org aims to track several of these ongoing initiatives, and describes the governance and funding arrangements for the various dedicated climate-change funds, the regional breakdown of funding and the types of projects being supported.

Most funding mechanisms currently exist outside of the UNFCCC, and none of them are funding at the necessary scale required, as the funds primarily rely on voluntary contributions financed by donor governments’ budgetary expenditures. Further, the disbursement of funds is slow, and there tends to be a lack of progress towards country ownership – governments receiving finance are not sufficiently taking charge of climate-change policies and activities in their countries.

It is still unclear what kind of agreement we can expect from Cancún. While there appears to be general consensus on the need for a new global green fund, it will undoubtedly take a long time to make this fund operational and to agree on some of its critical elements. Key questions include:

How will the fund be resourced?

To avoid a business as usual approach to climate finance, the fund must move away from voluntary donor country pledges towards an innovative sourcing mechanism that can provide funds automatically at the scale needed.

Positively, many developed countries have come forward with pledges to meet the “fast start finance” commitment of US$30 billion (201 billion yuan) by 2010, yet many of these pledges recycle previous, unfulfilled promises on climate change, and all are voluntary. It may be too much to expect donor governments to cough up significant and additional resources on their own when there is no common framework or agreement within which to offer support. Instead, looking towards a longer-term solution, a shift away from these one off voluntary pledges is needed.

How will the fund be administered?

A central and contentious topic of discussion within negotiations concerns the governance structure of the new fund, and touches upon the composition of the fund board (for example, the share of representation between developed and developing countries), how funds can be accessed, prioritisation criteria for who receives funding and where the fund will be housed.

How will funds be disbursed?

Lessons in aid effectiveness need to be passed on from development cooperation to the climate-change community in order to understand how international climate finance can be most effective in terms of delivering results on the ground.

Further discussions are also needed on how the private sector will play its role, not only towards providing funds to support climate-change mitigation and adaptation, but how to encourage the private sector to reduce its investments in climate-unfriendly activities.

The failure of Copenhagen to reach a legally binding agreement has toned down expectations of an imminent climate treaty. Experts say that, at best, Cancún will deliver “good progress” on finance, yet any progress is likely to be contingent on a deal on emissions controls and the legal status of a future treaty. Such a treaty is likely to be completed at the end of 2011 at the earliest, yet more pessimistic outlooks abound.

 

Jessica Brown is a research officer at the Overseas Development Institute.

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alternativeview

关于联合国气候变化框架公约的疏忽

大多数评论家忽略了关于气候公约的一点,就是我们必须大幅度减少消费者驱动的碳排放量。这对个体消费者来说毫无损失。

考虑到发展共同体、气候变化界(两者应该是同样的)时,要牢记前者在实现千年发展目标、降低人均GDP增长国家的基尼系数(穷人相对来说是变得更穷)等问题上的失败,而GDP的增长(发展共同体对此赞誉)很大程度上归功于造成目前气候变化的不可持续经济增长。

Negligence concerning the UNFCC

The point which most commentators neglect concerning the UNFCC is that we must greatly reduce consumer-driven emissions of carbon. This does not cost individual consumers anything.

When considering the advice of the development community, the climate change community (the two ought to be identical) should bear in mind the failure of the former to deliver on the Millennium Development Goals, reduce gini-coefficients (the poor are becoming relatively poorer) in countries whose GDP per capita is increasing, and that that GDP increase (applauded by the development community) is largely attributable to just the sort of unsustainable economic growth which is causing climate change.

Default thumb avatar
gaidee

极端传统的中国人对于无形的国际好处

“本人认为普通中国人没几个能读得懂这篇晦涩的文章, 尽管谈的是咱们国人热衷的钱,免费的,听说会来自西方世界。虽然我们都知道,羊毛出在羊身上。”

世界不需要和事佬告诉我们现在朝鲜半岛面临战争威胁。为什么我们需要那么多环保人士来告诉我们气候变化的忧虑?

Ultra-traditional Chinese for one invisible Globe Good

I don't think normal Chinese people could understand the translated Chinese mandarin for the good and bad news for the much beloved money, potentially from the West, and ultimately from the developing countries themselves.

The world does not need peace makers to tell us there is the war threat in Korean Peninsula now, and why we need so many greens or environmentalists to tells us the bad news about Climate Change ?

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gaidee

The media's disgrace

Journalists around the world flocked to Copenhagen hoping to have good news for people back home and the world, but failed. Next month, the same people will go to Cancun to admire the natural scenery and listen to the arguments left over from the last time. Who is to blame? The scientific community, media, the dirty politicians or the ignorant public? It is the media's shallow and superficial knowledge that has the power to influence the world, yet it failed to deliver the news that people were expecting, and this is a disgrace for the media industry. This is indeed an absurd world.

媒体的耻辱

世界各地的记者蜂拥至哥本哈根,希望带给国内和世界读者好消息,但是他们失败了。下个月,这同一群人又将跑去坎昆,欣赏美丽的自然风景,看看上次遗留下来的争吵。这究竟是谁的错?科学界,媒体,肮脏的政客还是无知的民众?这都是对媒体肤浅和表面的认识造成的,媒体有影响世界的能力,却没能向世界传递人们期望的信息,这也是媒体行业的耻辱。没错,这真是个荒诞的世界。