Tag: AGF

Design by Committee

It seems incredible. In the age of super-advanced information technology, where communications of all kinds fly around the world and across borders in an instant, the countries in the UN Asian regional group felt that the only way they could agree their nominees to the Transitional Committee (TC) to design the Global Climate Fund was by meeting face-to-face. In a few short weeks, citizens across North Africa and the Middle East have reshaped their governments and opened up new political horizons. The Asian group has yet to manage to select 7 members to sit on a committee. It wouldn’t matter if there wasn’t so much at stake. The work of the TC is vital to make a fair and transformational climate fund operational as soon as possible. Starting that work has now been delayed by more than a month, meaning that parties missed the deadline set in the Cancun agreement.

By way of comparability the Africa Group, with more than 50 countries, not only managed to complete their delegate selection on time, but also got agreement on proposing an important new agenda item on finance, that can help ensure there is money to go into the fund as soon as it is operational.

Let’s hope the Asian Group – and the GRULAC Group, which is also holding things up – have at least used the extra time to think through the kind of experts they will nominate. The TC badly needs experts in areas that matter to poor people’s lives and livelihoods, in areas like gender, agriculture and low carbon climate resilient development.

As of now, one can count the number of women currently nominated to the TC on one hand, or rather on two fingers. That may be a 100% increase on the number of women on the UNSG’s Advisory Group on Climate Finance, but it is still a token number. Women are the worst impacted by climate change. They must be at the heart of this new fund, not excluded from its core decision making structures.

The Asian and GRULAC groups can still get the job done, and do it right.

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Responsible Approaches to Finance at Scale

We are starting the crucial final week. Ministers are being briefed, crucial new texts are being minutely analyzed and insect bites are spreading. With so many difficult, complex and itchy matters competing for attention, it might be easy to overlook one fact. We have only two years to get climate finance flowing at scale before fast start finance expires in 2013.  But there’s good news: a variety of innovative sources of climate finance are right at our fingertips.
This week, Parties should create a robust process to discuss sources of long-term finance, with a clear work plan and outcomes that can deliver concrete decisions by COP 17. These steps will address where the financing will come from, and acknowledge that meeting mitigation and adaptation objectives  means scaling up finance substantially over the long term
The new LCA text usefully calls for a look at needs and options for mobilizing long term finance. But in the absence of a work plan and outputs, negotiators will face another year of wrangling over how to move forward.
Sources of financing is a political issue, not a technical one, and it must be discussed in the LCA, not pushed off into the SBI or a body focused on designing a new fund.
The issue was held in abeyance this past year while the UN Secretary General’s Advisory Group on Climate Finance (AGF) did its work. The AGF has now released the findings of 9 months of study. While ECO was disappointed that private finance and carbon markets are spotlighted, and multilateral development banks are inappropriately considered sources instead of channels of finance, this constitutes an impressive body of work including workstream papers that can serve as a useful starting point for the coming focus on ways to mobilize public finance.
One source is government budgets from developed countries.  This will continue to be an important source of international climate finance, and a scale for assessed contributions will be an important output of the process.
But to scale up public finance to the necessary scale, rising rapidly from fast-start levels, other innovative sources will be required. Mechanisms to address emissions from international shipping and aviation fit that bill.
The AGF has endorsed a mechanism to solve the equity question under the principle of common but differentiated responsibilities raised about this mechanism. The AGF proposal involves using a rebate to ensure that developing countries are not subject to any net incidence or burden from global measures to address emissions in these sectors.
In the shipping sector this rebate would be based on the share of global imports attributed to each country. Other options are discussed for the aviation sector. Developing countries will be entitled to the rebate, while the share of revenue attributed to developed countries would be administered under the UNFCCC and be used for adaptation and mitigation actions in developing countries.
Text introduced by Chile should supplement the Chair’s LCA text on aviation and maritime transport.  However, a process for committing to public finance options must go beyond the AGF report to include new submissions, workshops and a clear workplan to get to decisions by South Africa on specific sources.
If we can break the longstanding deadlock in addressing emissions in this crucial and grow, negotiators and Ministers can claim an important success here in Cancun. And all those mosquito bites can be a badge of honor.

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Rocking the Boat, Flying to the Moon Palace

Delegates arrive by plane and eat food that’s been shipped by boat – international transport has been part of the COP since the beginning.  And while there are 100% biodiesel buses bringing delegates from the Messe to the Moon Palace, we are a long way (whether by plane or boat) from having international transport running on clean fuel.  
Even if the weak voluntary measures proposed by the International Civil Aviation Organization (ICAO) are implemented, emissions from transport, if kept unregulated, would amount to 30% of the annual global emissions budget by 2050 to be compatible with a 2° C objective. In the 1.5° C scenario the figure is even worse, it’s above 60%!
But there is some good news too.  There are now ways for global regulation of emissions from international transport to cause no net incidence on developing countries. This guarantees consistency with the principle of common but differentiated responsibilities without affecting economic efficiency – something that has been blocking a decision in this arena.
Even better, there are many options available to generate climate finance, some of which could yield upwards of $10 billion USD per year, while also generating funds for technology innovation in the international transport sectors.  That’s another point that has been blocking progress.  And better yet, you guessed it, some of these options can also achieve significant emissions reductions.
If given a clear signal at this COP, regulations under the International Maritime Organization (IMO) could be operationalized as early as 2013. Remember, the closure of the fast-start financing period will be upon us in two short years.  A decision here at Cancun would allow FSF, much of it actually non-additional, to be replaced with real, new and additional finance.  That would be something for delegates to be proud of as they taxi down the runway leaving the Cancun International Airport for well-deserved time off at the end of the year.   
As the High-Level Advisory Group on Climate Change Financing (AGF) points out, no single source is going to reach the promised $100 billion USD level by 2020.  ECO therefore reminds developed countries that substantial public financing from you will also be required.  And it is easy to see that financing from international transport should be part of any package.
Sending a clear signal to IMO and ICAO at COP 16 will not only help prevent a finance gap but also take a big step to ensure environmental consistency and climate stabilization.

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A Climate Fund Worth Fighting For

In the lead-up to Copenhagen and since, climate finance ranked has ranked higher and higher on the list of make-or-break issues. It’s both vitally important and politically challenging. As COP16 kicks off, however, there are worrying signs that negotiators may be taking their eye off the ball and sleepwalking toward a result that does little to resolve the inad­equacies of existing institutional arrange­ments.

To be sure, there is good news also. Over the course of 2010, talks on a new global climate fund have been produc­tive – and now there are proposals and options on the table to provide for its es­tablishment here in Cancun, with details to be worked out in time for COP17. But the establishment of the Fund and related climate finance decisions are far from a done deal. Many of the emerging ‘areas of convergence’ on the table may not de­liver the fair, legitimate and effective cli­mate fund that’s really needed.

For example, many Parties appear ready to accept equal representation between Annex I and non-Annex I on the Fund Board. Because there are roughly three times as many developing countries, this means that each developing country will have one-third the voice in the Fund’s governance. This notion of ‘equal representation’ is a big step backward from the precedent established by the Adaptation Fund, which additionally has two seats from each of the UN regional groups plus one each for LDCs and SIDS. It’s hard to see how, in the end, this would deliver arrangements that are any different from the GEF. Is this the “balanced’ guaran­tee of interests needed for all UNFCCC members?

Secondly, none of the textual propos­als tabled so far guarantee any balance between adaptation and mitigation fund­ing – something most countries agree in principle even though it has not been de­livered in practice to date.

Adaptation currently receives scarcely 10% of the overall climate finance port­folio. Unless Parties agree a dedicated adaptation window in the new Fund with at least 50% of the monies channelled to it, we can only assume the current trend will continue. Is this what Parties really mean by ‘balance’?

Third, textual proposals for guidelines to ensure that the most vulnerable com­munities, especially women in rural ar­eas, will ultimately benefit aren’t diffi­cult to improve – only because right now there aren’t any such proposals. But this is easy to address with a few lines of text and it’s hard to imagine any country op­posing it. Who is against guarantees that gender equity will receive particular at­tention in adaptation support?

Finally, everyone knows building an­other near-empty fund is pointless. Sev­eral options to deliver predictable sources of innovative financing – such as a levy on international shipping and aviation as part of an emissions reduction scheme – were presented by the UN Secretary General’s High-level Advisory Group on Climate Finance less than a month ago.

In fact, it’s clear from the AGF Report that raising $100 billion or more in pub­lic finance is possible. But unless Parties work in concert to map out options for putting such proposals into practice, a de­cision to establish a new Fund could de­liver an empty shell. Is this what Parties had in mind in Bali when they agreed to ‘improve access to adequate, predictable and sustainable financial resources’?

­The decisions taken here in Cancun may not result in the FAB deal that is increasingly overdue. But they will have profound, long-standing implications for the institutional architecture of the future international climate regime.

A fair climate fund is definitely within reach, and ECO calls on all Parties to stand up for it.

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UN High-Level Climate Finance Group delivers a low-level response to the poorest people, says Tearfund

 

5th November 2010

A UN High-Level Advisory Group set up to analyse how to raise urgently needed climate finance announced details of its report today.

Tearfund's Director of Advocacy Paul Cook said: "The Climate Finance panel was set up to analyse how to raise the $100 billion a year by 2020 and the report shows that it is feasible to raise at least this amount by using public sources alone. However, what we have seen today doesn't go far enough and still amounts to leaving the most vulnerable people in countries like Bangladesh to clean up the mess rich countries have made."

The aid agency said climate change is the greatest development issue we face.  What was needed was a report that demonstrated how we are going to raise at least $200bn a year by 2020 for developing countries to adapt to a changing climate and reduce their emissions.

This money must be new and additional to existing aid budgets. It must come from innovative sources of public finance, like a Robin Hood Tax on banks and from levies on fuel and tickets for international aviation and shipping. Instead the AGF has delivered the low-level $100bn.

Tearfund warned that while it is good that the group recognises that the money required is in the range of billions of dollars, $100bn is not and has never been enough.

"Developed countries must think in terms of an evolving understanding of the science and of developing countries needs, rather than what they can get away with.

"We are pleased that the report shows how a combination of innovative sources can be used to raise the money for the long term. Today's launch is not the end of these discussions on innovative sources of public finance - rather it must be the starting point. Getting an international agreement for climate money is a crucial step towards agreeing an international climate treaty." Cook continues.

 Tearfund welcomed the UK's commitment to playing its part in the creation of new innovative sources and urged them to continue championing these to ensure progress is made within the UN climate talks.

 

Notes to Editor

 

For a briefing with one of Tearfund's Climate Change Policy Team, or an interview please contact the Media Team on:

0208 943 7779 / 0208 943 7792 / 07710 573749

Or email esther.williams@tearfund.org

 

Tearfund is a Christian relief and development agency building a global network of local churches to help eradicate poverty. Tearfund is a member of the Disasters Emergency Committee. www.tearfund.org

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Christian Aid: It's time for governments to use their financial imaginations - response to UN report on climate change

 

Today’s United Nations report on how to raise $100 billion a year to tackle climate change in poor countries relies too heavily on hopes that the market will help the world’s poorest people cope with global warming and get the clean energy they need, Christian Aid warned today. 



However, the charity also praised suggestions by the UN High-Level Advisory Group on Climate Change Financing that governments should tax the aviation and shipping industries as one way of raising the money needed – and urged governments to back other such innovative sources of public funds. 



‘So far, market responses to climate change have failed to meet the needs of the poorest people in developing countries, who are least responsible but worst affected by climate change,’ said Sol Oyuela, Christian Aid’s Senior Adviser on Climate Change and Poverty. 



‘So it’s important that governments play a key role in funding and regulating climate action. Especially today, when many governments don’t have ambitious climate policies, it is crucial that most if not all the $100 billion comes from new sources of public funding, such as taxes on planes, ships and financial transactions. It’s time for governments to use their financial imaginations.’ 



Christian Aid believes that this is not just a question of who’s most able to protect the most vulnerable families, who lack spending power – it is also a matter of justice. It is rich countries which are overwhelmingly responsible for climate change and it is their governments which should now take responsibility for coming up with the $100 billion. 



Ms Oyuela added: ‘We know that the financial crisis has put huge pressure on public funds around the world difficult but the effects of climate change are so devastating for poor countries – we are talking about worsening  poverty, hunger, conflict and disease – that we cannot ignore their desperate need.’ 



In the UK, Christian Aid believes that there is no excuse for government inaction on climate finance now that the Advisory Group has published its report. If the coalition is committed to tackling climate change and global poverty, then it should take the lead with other rich countries to ensure that the $100 billion comes from innovative sources of public funds. It should also start actually raising the money. 



Ms Oyuela added: ‘We would also like to see the UK government give serious backing to the Advisory Group’s suggestion for a tax on aviation and shipping. Such a tax would have a double benefit: it would put downward pressure on emissions from planes and ships while also raising some of the billions which people living in poverty urgently need.



‘Christian Aid has one other message for the UK government: every penny of the money that we contribute towards the $100 billion should be clearly additional to the funds we already spend on international development. 



‘Climate funding is a matter of justice, not charity. The men, women and children who currently benefit from UK aid spending should not be forced to pay our contribution towards global climate funds, which is what will happen if ministers raid the aid budget to pay for climate change.’ 





- Ends -

For more information and to arrange an interview with Sol Oyuela, please contact Rachel Baird on 0207 523 2446, 07545 501 749 orrbaird@christian-aid.org

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Oxfam: UN report shows climate funds can be raised without costing the taxpayer

A new report from the UN’s High-level Advisory Group on Climate Change Financing (AGF) shows that raising the public money to help poor countries protect themselves from climate change is possible without costing the taxpayer, Oxfam told the UK government today.

“This report clearly shows that money to tackle climate change and help poor communities adapt can be raised without dipping into taxpayers’ pockets. The next step is for political leaders to lay out a clear roadmap for making this funding a reality.” said Tracy Carty, Oxfam Climate Change Policy Advisor.

The AGF was established by the UN Secretary General in February 2010 to advise on how developed countries could deliver on their promise to raise $100bn per year to help poor countries adapt to a changing climate and reduce emissions.

The sources of money identified in the report must now be championed by Chris Huhne, Secretary of State for Energy and Climate Change, and other members of the AGF group.

“Clear backing from the UK Government will be essential for fair levies on uncapped emissions in international shipping and aviation and a Robin Hood Tax on banks with money earmarked for climate change. But in order to do so the UK must urgently clarify its position on these crucial sources of public finance identified in the AGF report.” said Carty.

Countries meeting at the UN climate change talks in Cancun later this month must now establish a global climate fund to manage this money and agree a process for deciding how they will finance it by the next climate summit in South Africa in 2011. By using these innovative sources, governments can raise enough money from public sources without siphoning from existing development aid money. As some members of the UN panel recognized, private finance cannot meet the needs of developing countries for adaptation.

Carty said: “The $100bn committed to in the Copenhagen Accord must come from public sources of funding rather than private to ensure it reaches communities desperately in need of money to help them adapt to climate change and develop in a low carbon way.”

Oxfam warned that the report’s inclusion of the World Bank as a potential finance source should not be used to undermine international negotiations on the establishment of a new, independent global climate fund that is fair and accessible. For the fund to be effective poor countries must have a say in decisions on how the money is managed and at least half of the funding should address climate change impacts on the most vulnerable.

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UN Advisory Group on Climate Finance Report Falls Flat

Recommendations Downplay Role of Public Finance, Rely Too Much on Private Finance

A new report on climate change financing options released today by a U.N. Advisory Group unwisely emphasizes carbon markets and other private finance options, while irresponsibly advocating an increased role for multilateral development banks (MDBs). Despite concluding that public sources of climate finance are available and promising, the report’s findings downplay the role that public finance can and must play in helping developing countries deal with climate change.

The U.N. Secretary General’s High-level Advisory Group on Climate Change Financing (AGF) issued its report today ahead of the annual U.N. climate summit in Cancún that begins November 29. The report outlines a number of public and private options to raise money to help developing countries adapt to the impacts of climate change and reduce greenhouse gas emissions.  

“The AGF recommendations are unfortunately based on unduly optimistic econometric projections and a blind faith in the capacity of highly volatile and unreliable carbon price signals to induce long-term investments in low carbon energy production and manufacturing,” said Steve Suppan of the Institute for Agriculture and Trade Policy. “A better start on climate finance would be for developed countries to make good on their $30 billion pledge for immediate funding to allow developing countries to adapt agricultural production and water management systems to the imminent ravages of climate change.”

“It was inappropriate for the AGF Report to make reference to the role of multilateral development banks. MDBs are not a source of climate finance, but are used as a channel. And they are not acceptable even as a channel. MDBs are a part of the climate problem, not the solution. The World Bank and other MDBs are far, far more adept at causing climate pollution than in helping countries to mitigate or adapt to it. Using MDBs as a channel would also mean climate finance in the form of loans or other debt-creating instruments,” said Lidy Nacpill of Jubilee South – Asia/Pacific Movement on Debt and Development.

“Adaptation funding, in particular, is compensation for damages done by developed countries and should only be given in grants. It is untenable that the AGF suggests otherwise. The enormous costs of dealing with climate change must not add to the already heavy debt burdens experienced by many developing countries,” added Nacpil.

“The AGF report—as limited in scope and conservative in its estimates as it is—still shows that there are numerous viable options to generate public finance for climate change,” said Ilana Solomon of ActionAid USA. “Developed countries have no excuse for inaction. The options are there. They must work through the U.N. Framework Convention on Climate Change to come to agreement on a combination of public sources to generate the desperately needed resources to help developing countries confront climate change."

“The AGF acknowledges that meeting the needs of developing countries will take a ‘systemic approach’ to financing climate adaptation and mitigation,” noted Janet Redman, co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies. “Options like a financial transaction tax meet the mark: stabilizing the economy by curbing dangerous speculation and raising hundreds of billions of dollars each year for global public goods like combating climate change. The AGF is undercutting its own mission by underestimating the revenue generated by a feasible and popular source of public finance."

The groups expressed concern that the AGF was guided by a pledge developed countries made in Copenhagen to mobilize $100 billion per year by 2020 in public and private finance—a pledge which falls short of reasonable estimates of climate financing.

“$100 billion is an arbitrary, political figure that is based neither on need nor on equity. If the U.S. government rapidly mobilized trillions to bail out Wall Street, why cannot at least equal effort be put toward bailing out the planet from a climate crisis that rich countries caused?” said Karen Orenstein of Friends of the Earth U.S.

In October, at the global climate talks in Tianjin, more than 25 civil society organizations sent a letter to the co-chairs of the AGF outlining their recommendations for climate finance.

ActionAid USA, Friends of the Earth U.S., Institute for Agriculture and Trade Policy, Institute for Policy Studies, Jubilee South – Asia/Pacific Movement on Debt and Development.

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WWF: Climate money can be generated, political will needs to come from Cancun

New York, USA:  A high level analysis of climate finance submitted to the UN today has demonstrated the feasibility of putting up by 2020 US$100 billion a year in public funding to fight climate change.

According to WWF, this conservative analysis by the special High-level Advisory Group on Climate Change Finance (AGF) sets the stage for a finance agreement to come out of the UN climate summit starting late this month in Cancun, Mexico.

“The Secretary General’s high level group has come up with the financial mechanisms, now we look to governments to come up with the political mechanisms to get the finance actually flowing,” said Gordon Shepherd, leader of WWF’s Global Climate Initiative.

Financing, agreed in principle under the Copenhagen Accord from the last UN climate summit, is needed to support action in developing countries to halt the destruction of tropical forests, speed the transition away from high-emission models of development, and to help vulnerable countries adapt to climate change impacts.

 “These public funds are critical to speed up the development and implementation of new technologies, as well as for adaptation and resilience building, new energy efficient infrastructure, and for construction. It will also be used to leverage private sector finance which will contribute much of the investments needed in clean energy technologies,” said Shepherd.

“Our experience is that public investment and initiatives play key roles in mobilising and directing private investment.”

The AGF report gives strong support for financing from carbon pricing mechanisms, with one of the most promising sectors being international aviation and maritime transport, whose emissions are as yet unregulated. “We expect decisive action in Cancun to put this finance source on a fast track to implementation”, said Shepherd.

Other promising sources were downplayed because of opposition from some individual group members, with the chief casualty being the financial transaction tax (FTT).

““Financial transaction taxes have been successfully implemented in more than a dozen countries and at this point we should be examining all potential sources of finance on their merits”, said Shepherd.

Although the assumptions used by the AGF to assess the scale of potential financing generated are extremely conservative, and some members placed undue emphasis on private sector investments in meeting the $100 billion per year financing milestone, the report provides a useful starting point for moving forward.

Parties in Cancun can build upon the AGF recommendation on the way to establishing a much needed new UN Climate Fund and could contribute to host country Mexico’s wish for progress on all elements of a “balanced” Cancun package.

The AGF was set up by United Nations Secretary-General Ban Ki-moon in February, Co-chaired by Prime Minister Stoltenberg from Norway, and Prime Minister Zenawi from Ethiopia, to explore innovative financing sources and mobilize the financing promised for climate change during the United Nations Climate Change Conference in Copenhagen last December. 

For any further information and interviews contact:

Gordon Shepherd,Leader WWF Global Climate Initiative, gshepherd@wwfint.org, Ph: +41 794567959

(On European time-zone)

Mark Lutes, Finance Policy Coordinator, WWF Global Climate Initiative, mark.lutes@wwf.panda.org, Ph: +1 416 484-7723; mobile: +1 416 473-5919;(On Toronto, Canadian time-zone)

Ashwini Prabha, Communications Manager, WWF Global Climate Initiative, aprabha@wwfint.org, +41 798741682

 

More information on financing for climate change and AGF: www.panda.org/climatefinance

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