The Adaptation Fund (AF) has entered into its fifth year of operation. A couple of weeks before this Bonn session, the Board of the Fund (AFB) at its 17th meeting made substantial decisions for further advancing the Fund´s provisions. In particular, these covered critical aspects such as the guidance for the consultative process, the consideration of most vulnerable communities, the establishment of complaints procedures and increased transparency regarding the technical review of project proposals. In the course of this week, the AFB had a chance to share information on its progress with interested Parties. The AFB can be congratulated for increasing its attention towards these issues and for learning from its own lessons.
This is important for the AF at its critical juncture of raising funds for meeting the adaptation needs of vulnerable countries and financing innovative projects that benefit the targeted areas. The prices for Certified Emission Reductions (CERs), which is the innovative and main funding source of the AF, have drastically decreased over the last months. Part of this is due to the lack of global ambition in mitigation. The EU, with its Emissions Trading Scheme, is one of the key demanders of the CERs. However, the current EU target of 20% reduction is not only well below the ambition indicated by the IPCC with regard to the 2°C limit, but also affects the prospect of the ETS as a functioning setter of price signals for emissions. (Of course, other developed countries lag behind in their mitigation ambition as well).
The direct access approach of the AF is speeding up, with more and more developing countries managing the associated accreditation process, while sadly the funding gap is increasing, making it almost impossible for the AF to respond to all funding requests.
Few resources have been dedicated to the AF, despite its innovativeness and its progress. Sweden has contributed this year for a second time; Spain is the top contributor, with 45 million Euro. There are still too many developed countries who have not paid into it, some of them sitting on the Board. (And one could also imagine that some developing countries would support the AF in their own interest, e.g. as a learning tool.)
To address this issue, the Adaptation Fund Board has now set the target to raise US$100 million additional funds by the end of 2013. ECO encourages all developed countries to put additional money into the Fund. These contributions should enable the AF to keep pace with need until the Green Climate Fund becomes fully operational, due to increasing funding demands from developing countries.
Photo Credit: Leila Mead/IISD
The uninitiated ECO reader may think a driver is a less ostentatious term for a chauffeur, but in REDD+ a driver is an underlying cause of deforestation or forest degradation.
This week in Bonn, SBSTA has this on their agenda. ECO thinks it’s vital that all parties explore ways to identify, assess and address drivers. Otherwise we risk wasting REDD+ financing and failing to achieve our goal. Ultimately it is global demand that drives most deforestation and forest degradation. All parties therefore have a responsibility to act on this, as spelt out in the Cancún decision on REDD+.
What does this mean? Drivers should be dealt with at the level they occur, be it local, provincial, regional, national or global. In the forest country itself, issues of governance become significant, as does the need to satisfy the demand of local populations for things like cooking fuel. Marginalised, forest dependent communities should not bear the brunt of blame and retribution for their impact on forest areas when the impact from outsiders is much larger.
You can’t solve problems in a forest for long simply by taking the chainsaw from a logger. You also need to address demand for paper products or luxury furniture that is motivating the logging company. The same issues of deforestation apply to our consumption of products from oil palm, beef or soy production, which are produced mainly for international consumption.
This year, a decision is needed on the root causes of deforestation and forest degradation. One that recognises REDD+ host countries require financial assistance to do this, and identifies the need for all parties, north and south, to take responsibility for their role.
This year’s long term finance work programme provides a critical opportunity for focused and constructive engagement on sources of climate finance and developing country financing needs. 2012 should be a pivotal year for climate finance, as Fast Start Finance comes to an end and developed countries start on the path to US$100 billion per year by 2020
Negotiations on long-term finance have faced significant headwinds in recent years, and analytical work has been limited to ad-hoc and one-off initiatives like the UN Advisory Group on Climate Change Financing, and fora with limited and exclusive memberships such as the G20. If rich countries want to show climate finance is not just another broken promise to poor countries, they must use this year’s work programme to help make significant progress on agreeing to a roadmap to scale up funding over the next eight years to $100 billion per year by 2020.
To help ensure this ambition is realised, ECO would like to highlight the following objectives for the work programme, for consideration by parties attending today’s UNFCCC consultation on its scope
It is vital the work programme contributes to decision(s) at COP18 that make concrete progress towards scaling up finance, including:
- Identifying and advancing promising sources of predictable and assured finance, especially public sources, such as providing guidance to the International Maritime Organisation and International Civil Aviation Organisation on generating financing from measures to address emissions from international shipping and aviation, as well as financial transaction taxes and public finance liberated in developed countries through the elimination of their fossil fuel subsidies
- Providing a roadmap for reaching agreement on a pathway to mobilising $100 billion by 2020, including maximisation of public sources channelled through the Green Climate Fund, an appropriate role for the private sector and a trajectory for developed countries to scale up
- Establishing a shared understanding of developing country financing needs, based on a review of recent literature on mitigation and adaptation financing requirements
- Clear commitments to provide scaled up finance from 2013 onwards, including for the capitalization of the Green Climate Fund
This work is all the more urgent given the link between raising and delivering climate finance and reaching the goal of staying below 1.5/2 degrees C of warming. Scaled up finance to support increased ambition in developing countries is critical to move them towards low carbon development pathways.
In addition to constructive engagement on these areas through the work programme, all parties must be afforded sufficient spin-off group time in Bonn, Bangkok and Doha to participate in defining vital decisions for agreement at COP 18. In this respect it is imperative the Work Programme is seen as a complement to, rather than a substitute for, negotiations involving all parties.