Which Way for Warsaw?

And so here we are once again -- with a hop (Doha), skip (Bonn) and a jump (Bonn the sequel) we’ve landed back in Poland for another COP.  

Indeed, it’s been a busy few months with the IPCC AR5 report from Working Group I out (and shutting down the deniers), both China and the US taking explicit action to curb coal, and some movement from the Montreal Protocol negotiations and even the ICAO.  We are excited to see whether this momentum plays out in Warsaw, but you can tell we’re also a bit worried.

ECO welcomes our readers to Poland!  [despite the inappropriate scheduling of coal conferences]  So what’s in store over the next two weeks?  

In the coming days, we can see some wild cards on the table.  How will the Russian et al. objections be reconciled? How many lawyers will the US bring out of the woodwork to ensure no mention of ‘compensation’ crops up?  

But there are also some positives.  With the completion of the Kyoto Protocol and Bali negotiating tracks, negotiators will feel less of a burden from those complicated flow charts that tried to keep up with seven negotiating tracks at once.

And the simplified schedule should also concentrate minds on the key issues that urgently need to be addressed.  Progress here in Warsaw on finance, loss and damage and pre-2020 ambition is essential to build trust and to lay the foundations for an ambitious and effective 2015 agreement in Paris.

We must also see much greater clarity at the end of these two weeks on the process and timeline for countries putting forward their proposed post-2020 mitigation pledges -- and for developed countries, their indicative post-2020 financial pledges -- as well as a clear process for a full and meaningful review of those pledges well in advance of Paris. That review must assess both the collective adequacy of the pledges against the global temperature limitation goal, and their individual fairness against a set of equity criteria and indicators.

Parties need to go home from COP 19 fully aware of their homework assignments to build up their post-2020 pledges in order to put them forward in 2014. They also must focus on ways to close by 2020 the substantial Gigatonne Gap (with a third UNEP update on hand just last week).  And the homework assignment there is quite clear: raise the ambition of existing pledges and enhance cooperation on deployment of renewable energy and energy efficiency technologies, phase-out of HFCs and other key efforts.

ECO hopes our COP hosts will move the process along smoothly, despite being preoccupied by hosting their other summit with the World Coal Association.

ECO would like to remind the government of Poland that along with aspiring to be an emerging international player comes more responsibility.  

The World Coal Summit reinforces the structural bias of the global economy towards fossil fuels (which quite frankly, dear readers, need no helping hand!).  But it is also distinctly dismissive towards those countries facing an existential threat from climate change.  

So, fully noting our bewilderment at the COP host's strategy, ECO hopes that the new, slimmer version of these talks results in a make-over as to how Parties engage.  
They must roll up their sleeves, put aside their well-known talking points (the ones we can all recite now without looking at our notes from previous sessions), and make real progress on finance, loss and damage, pre-2020 ambition, and the way forward to deliver the ambitious and fair post-2020 agreement the world demands in Paris.  

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Climate Finance In No Man’s Land

The importance of finance to both raising pre-2020 mitigation ambition and getting a successful deal in 2015 cannot be overstated. Right now, climate finance appears to be in no man's land. 

This year should mark the start of a new finance period, given that the Fast Start Finance period ended last year. Instead, we are almost halfway through the year and we’ve seen no new finance commitments beyond the small handful of pledges made in Doha.
 
This is unacceptable, and ECO thinks that no developed country should be coming back to this process empty handed. Developing countries are facing escalating climate impacts and associated costs. The livelihoods, food security and survival of millions of people are at stake because of a climate crisis they did not create. There can be no justification for holding back on promised finance.
 
Today's briefing on the Long Term Finance Work Programme provides delegates with an opportunity to focus on how the process can secure concrete outcomes by COP19. Linking the Work Programme to the COP Ministerial on finance (which crucially must involve finance ministers) is key.
 
By COP19, we need all developed countries to set out what public climate finance they will provide over the period of 2013-2015 as part of a roadmap for scaling up public finance towards the promised US$100bn per year by 2020. The Green Climate Fund cannot remain an empty shell for a fourth COP in a row.  As they start to fill the fund, Parties also need to agree that public climate finance delivered between now and 2020 will be equitably divided between mitigation and adaptation.
 
Developed country claims that they do not have public money to commit ring hollow. Trillions of dollars have been made rapidly available to pay for wars and bank bailouts. And there are plenty of feasible innovative public sources of climate finance, including financial transaction taxes, switching of fossil fuel subsidies, the closing of corporate tax loopholes, bunker fuel levies and more. The current fixation on leveraging private finance must be redirected towards implementing these public sources.
 
ECO wants to stress that scaling-up pre-2020 public finance cannot be postponed until COP21. A new, comprehensive climate agreement is very unlikely to emerge if developing countries do not see existing promises being met. Progress between now and 2015 is critical to ambition, and will determine whether climate finance will make or break a deal at COP21.
 
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Finance Action

The causes and effects of the global climate storm are dispersed; there is fragmentation and institutional inadequacy. This is true of most global problems, but the factor that really complicates climate action is the spatial and temporal dimensions. The effects of greenhouse gases are not ‘hot spots’ at the source. They are in fact global and the effects are most brutal in areas where emissions are low.

We need to converge our moral and ethical values to tackle this vast problem. The youth organizationSustainUS conducted a social experiment on Thursday at the QNCC to test this premise.

Youth representatives asked individuals entering the Conference where they would place their money, were it completely up to them: the Green Climate Fund, Fast Start Finance, Midterm Finance (2013-2020), Military Spending and Fossil Fuel Subsidies.

Each respondent received fake money at the start of the moving walkways from the garage to the QNCC and had to choose along the way where their currency would best be spent. Many dismissed the youth holding the Military Spending and Fossil Fuel Subsidies jars and split their ethical urges between the three climate change finance options. 

By the end of the event, the Green Climate Fund was the clear winner. The utilitarian calculus made on the moving walkways was in fact a choice to support those who are worst off.

The 1.2 billion people living on $1 per day stand to gain more from $100 than someone living on $100,000 a year. It seemed that this was a quick calculation in the participants’ minds when placed with a clear choice.
Yet according to a report by the National ResourceDefense Council, fossil fuel subsidies in 2012 were $775 billion globally while the GCF remains at $0, the FSF total is way below $30 billion (even setting aside the ODA double-counting aspect), and no road map has been laid down for midterm finance between now and 2020, nor pledges made to start mobilizing funds for the GCF in the final days of Doha.

Climate change has posed a systemic difficulty for political actors that calls into question the very institutions that we use to fight for climate change, even as we ourselves, given the chance, make choices on behalf of the most vulnerable and the future of the planet. This small informal experiment shows how far we have to go to close the gigatonne and equity gaps.

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Fast Start Finance: Mixed Results

Climate finance is not generosity or voluntary aid – it is a moral and legal obligation of developed countries, and an essential element of a solution to the climate crisis. But concrete commitments to financing are absent here so far. 

Now ECO has heard some grumpy noises from developed countries that their fast start financing and transparency efforts are not sufficiently appreciated. 
 
While not very sympathetic to the rich countries’ plight, ECO understands how hard it is pry any amount of money out of the hands of finance ministries, especially in difficult economic times. 
 
Treasuries could well be lacking commitment to resolving the climate crisis, and don’t understand why it is absolutely essential to quickly scale up climate finance and meet all commitments transparently and responsibly.
 
That’s why ECO is taking this opportunity to recognize the fact that developed countries did in fact deliver some climate finance in the Fast Start Finance period, and that climate negotiators and ministers participating in these negotiations had to work long and hard to steer that financing through government budgeting processes and get it delivered. 
 
Even Japan, faced with a devastating tsunami and a nuclear disaster, followed through on its plans, such as they were, which accounted for nearly half the FSF commitments.
 
And ECO also recognizes that developed countries have come under fully justified criticism for their failure to meet the commitment of $30 billion in new and additional public finance, as well as a series of other shortcomings. 
 
In fact, while developed countries now claim they over-delivered to the tune of $33 billion, independent analyses show that less than one third of these funds are new and additional. 
 
If those countries think they are being unfairly criticized now, they have no one to blame but themselves. 
By rejecting any kind of common standards for assessing what financing counts towards this goal, and an independent tracking system, they set themselves up for failure.
 
And now some of them are compounding this error by insisting they have no need to provide any assurance or specific commitments to funding from 2012 onwards. 
 
This is certainly the wrong lesson to take from fast-start. But that’s another story…
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Heros and Zeros: Adaptation Fund Facts & Figures

More and more countries seem to recognise the progress and achievements of the Adaptation Fund in recent years.  Progress so far was featured at a side event last Friday, held jointly by the Adaptation Fund Board.

First the good news.  Only two years after the first call for proposals, 25 concrete adaptation projects have been approved so far and USD 160 million has been allocated.  Direct access is now approved for 14 countries, and many more have expressed interest. 
 
The bad news is that the key funding source, the share of proceeds of CERs from the Clean Development Mechanism, has now almost totally dried up.  At the end of 2010, it was estimated that revenues would come in as much as USD 400 million by the end of 2012, but only USD 180 million can actually be realised with the current all-time low CER price. 
 
Some developed countries have made contributions to the AF to the tune of USD 120 million, and this is a very good thing. Spain and Sweden have been the heros in this, while UK and Germany have contributed only a tenth as much relative to their GDP than Spain or Sweden (roughly a tenth). 
 
But lots of other developed countries have closed their pocketbooks despite the benefits for vulnerable communities addressed by the AF projects. We still have time for pledges coming through from ministers in the next days in Doha, taking their cue from the many individuals who have, once again, reached into their pockets to help build up the Adaptation Fund.
 
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Time to #endfossilfuelsubsidies

Roaming in the halls of the QNCC, it’s not hard to hear the frustration from poorer countries lamenting the lack of climate finance.  The only thing louder is the excuses from the richer ones, saying the money is nowhere to be found.

Well, ECO has a solution!  A new analysis from Oil Change International shows that rich countries are spending more than 5 times as much on subsidizing fossil fuel companies than their climate finance pledges.
 
Just a quick perusal of the figures provides some shocking details.  Australia, for instance, has subsidized fossil fuels at a rate of 40 times more than their climate finance pledge.  The United States?  Their climate finance pledge is mere 20% of what they spend subsidizing the richest corporations in the world. That favorite Fossil country, Canada, spends nearly eight times as much subsidizing their beloved fossil fuel industry than they do supporting the most vulnerable.
 
So, when you hear that there’s no money to be found, now you, dear ECO reader, know exactly where to look!  Time to stop subsidizing the industry that is fueling the climate crisis and put that money to use fueling a safe future!  (And one place to start would be including fossil fuel subsidy phase out in the pre-2020 mitigation work programme…)
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MRV of Finance: What Could Be So Hard About That?

ECO understands that progress on transparent reporting of climate finance is grinding to a halt. SBSTA was meant to adopt common tabular formats for reporting by developed countries of both emissions and climate finance. Now the process appears to be deadlocked with no immediate solutions in sight.

Apparently, developed countries are opposing a key proposal made by developing countries on transparent reporting – a common tabular format on climate change. Essentially, this is a method to provide listings of individual, bilaterally financed actions, rather than just aggregate figures per recipient country or per sector. 

The idea to list every single financed action with information on title, recipient country, committed amount, climate component of amount, sector, mitigation/adaptation, grants / / loans (also stating grant equivalent) and so forth seems pretty reasonable to ECO. Transparency of one's own actions is a key ingredient to a 'circle of confidence' and a precondition for the ‘V’ in MRV. Developed countries could use such lists to demonstrate transparency, as well as tracking where and how their climate finance is flowing. 

However, developed countries continue to argue that submitting project listings is too cumbersome. ECO would like toremind everyone that developed countries are already compiling such lists – forexample, the OECD DAC reporting system currently used to report aid flows. So the idea of such listings is neither new nor prohibitively cumbersome.

If developed countries continue to resist providing listings of financed actions as part of their MRV exercise, ECO is always eager to serve.  For example, ECO could use the ‘freedom of information’ laws that exist in many countries to locate theinformation and submit it to the UNFCCC, as a courtesy to transparency and the ‘V’ in MRV.

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Fill the Fund!

As the end of the Fast Start Finance period approaches, ECO lies awake at night thinking about what happens next. There is nothing on the table for 2013 and beyond, and a huge mid-term finance gap is looming. ECO is as worried as developing countries that developed countries have little interest in discussing a scaling-up roadmap of climate finance towards 2020, with clear milestones, and ensuring that the Green Climate Fund doesn’t remain an empty shell.

Adaptation and mitigation needs have only grown larger since they were last assessed, and ECO believes that a finance gap is the last thing the climate, and these negotiations, needs. ECO worries that climate finance will be lower in 2013 than in the three years since Copenhagen.
ECO wonders if negotiations, including those on increasing mitigation ambition, will progress at all without a clear signal that developed countries will be living up to their commitment to provide new and additional climate finance, and start making progress towards meeting the US$100 billion per year by 2020. Yes, some developed countries have made reassurances that climate finance will not fall of a cliff after 2012, but in ECO’s view, general reassurances are one thing; individual commitments, though, are quite another.
So ECO strongly suggests that developed countries show that they mean business, and clarify what they intend climate finance to look like in the beginning of 2013 and over the years to 2020. As a clear down payment on trust, which has been our missing friend here in the Maritim, ECO believes developed countries should make a political commitment in Doha to initially pledge at least $10-15 billion to be disbursed to the Green Climate Fund over the years 2013-2015 as part of a broader climate finance commitment.

 The Green Climate Fund has some work ahead, and we urge all parties to get on with the institutional arrangements without delay. That should not stop parties from making their political commitments in Doha. Hesitating countries might be interested to know that, in fact, the Global Fund to Fight AIDS, Tuberculosis and Malaria received pledges well before it was ready to receive funds.
Such a pledge would send a strong and positive signal and help fight the perceptions of the last two weeks that the means of implementation may not be forthcoming. Pledges in Doha could be complemented by future revenues from new alternative sources, such as from a fair bunkers mechanism or a financial transaction tax. Of course, initial pledges in Doha would be the first step on a longer pathway to scale-up the annual turnover of the Green Climate Fund by 2020, where the majority of the $100 billion commitment is channelled through the GCF itself.
ECO believes that all this is firmly within the remit of possibilities of developed countries, as the memories of the bank bailouts with hundreds of billions (or was it trillions) of dollars are still fresh on our mind. We suggest that when negotiators have arrived back home, they make urgent phone calls to their finance ministers to get them started on preparing for the Doha pledges. Civil society, to be sure, will be ringing them.

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A Fund to Inspire the World

There are nine days left before the members of the Transitional Committee (TC) tasked with the design of the Green Climate Fund (GCF) will gather in Cape Town, South Africa for their fourth and final meeting before the COP in Durban.

It is clear that discussions are in a critical phase. The outcome of the TC meeting will likely determine whether the GCF will become a major driver for change that allows developing countries to shift towards a sustainable, low-carbon and climate-resilient development pathway, or alternatively become just another business-as-usual instrument. Will the Fund initiate a shift in the global financial architecture towards increased ownership for those who face the harsh reality of climate change impacts and wish to harness the benefits from low-carbon development? Or will it be another body with difficult access procedures for developing countries and thus lag behind the urgency of response that is needed? Success is possible in Cape Town, but there is also a real risk of failure.

ECO would like to encourage all TC members to do their utmost to conclude a strong and ambitious GCF which gives the developing world the bold means necessary to address climate change. Concluding their task will not be the endpoint for the design of the Fund, but rather a starting point which will hopefully provide the framework from which the key pillar in the international fight against climate change will emerge. Thus, ECO urges the TC members to focus on finding common ground, seeking compromise and show that the GCF is a joint response by the global community to the urgent problem which we are facing with our backs against the wall. It will not be perfect from its inception, but has to be a solid foundation on which to build.

Importantly, the TC must ensure that the Fund is credible from its inception, and ECO would like to urge the TC members to ensure that the outcome of their discussions is one which civil society can continue to defend. We seek assurance that civil society will be given at least the same attention as the private sector in the procedures of the GCF – for example, through active observer seats on the board and strong in-country participation.

The GCF will be a key channel for adaptation finance, and many civil society organizations have long experience in addressing the needs of peoples most affected by climate change. We seek assurance that a balanced allocation between adaptation and mitigation will be achieved to correct the major global over allocation towards mitigation that exists. We seek assurance that the GCF will enable direct access to funds for developing countries, notwithstanding the fact that reliable fiduciary standards are an important part of direct access design.

We seek assurance that environmental, social and gender safeguards are consistently and effectively applied with a view to reducing the risk that GCF resources are harming the people they are intended to help. Finally, we seek assurance that the GCF will be a key driver of low-carbon, climate-resilient and gender-equitable development pathways thus providing developing countries the help they have long been promised to alleviate poverty and achieve their development goals. There is still a chance to come up with a great result in Cape Town, the world will be watching.

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