Guest post by chinadialogue intern Paul Carsten
When it comes to efforts to prevent climate change, it is not only companies that are under scrutiny for their transparency. This year’s Carbon Disclosure Project report on the emissions of the world’s biggest firms demonstrated that big business is increasingly willing to reveal data on its environmental impact and what it is doing to mitigate it. Yet developed nations – including Japan, the United States and European Union countries – who had pledged to give US$30 billion of “fast-start climate finance” to developing countries from 2010 to 2012 are failing to provide clarity on where and how their money is being spent.
Yesterday the International Institute for Environment and Development (IIED) released a report on the degree of transparency in UN-sponsored climate finance. The study included a scorecard ranking the efforts of nine countries plus the European Union. The best performer, Norway, only scored 52%, while the worst, New Zealand, managed a mere 26%. Not only is transparency “essential for governments to plan mitigation and adaption”, stated the report, but also for accountability for contributors and recipients. It goes on to conclude that an international registry of funds – which would provide a more detailed breakdown of where the money comes from and how it is used – is urgently required to provide the levels of accounting and reporting necessary.
One of the major concerns is that a significant proportion of the US$30bn is neither “new” nor “additional”, flouting a key promise. Rather, it is being diverted from pre-existing funding pots for basic needs in developing countries, such as health and education. Moreover, without clarity on where the money is going, the recipient nations cannot easily plan climate-change mitigation and adaptation efforts.
The main reason we are seeing these problems, says the IIED, is the absence of three things: a “globally agreed upon framework” for oversight, monitoring and evaluation of the funding; clear stipulations of what new and additional funding is; and a shared commitment to transparency among contributor countries.
The process for managing the funding is murky at best, with ample opportunity for money to be double-counted, diverted from other projects or even sidelined once it has been distributed, says the report. Saleem Huq, one of its authors, said this may explain why many contributor countries were “shockingly unable or unwilling to state the baseline used for claiming that funds are new and additional to money committed before Copenhagen.”
Huq believes that adequate information on where money is going and what it is being spent on is of critical importance – at the moment, you can’t track where it’s going, while contributor countries merely release statements announcing the money has been donated. This also means there is little information on what proportion of the funds goes to mitigation and adaptation. Huq makes it clear that the nations are to be lauded for reaching their promised figure of US$30bn, however, he said, “the devil is in the details.”
The IIED report concludes with a call for the creation of a registry for funding, which Huq said the organisation would be very happy to help develop and pass on to the United Nations: “At the moment, nobody else is doing it, so the odds of it being taken up are relatively high,” he said. IIED hopes that such a registry will be established at the UN-led climate negotiations in Durban this December. “We are not sure whether this will happen at Durban,” said Huq, “but it will happen eventually, hopefully sooner rather than later.”