Tag: finance

EU starts fast, but...

ECO is eagerly awaiting today’s side event at which the EU will present its preliminary report on its fast start finance pledge. Not because the report itself will bring any new information to light -- it was leaked to the press weeks ago -- but to see EU negotiators try to answer the question on the lips of NGOs and developing country negotiators everywhere . . . how exactly is EU fast start finance 'new and additional'? Other developed countries might like to attend and pick up some tips. The EU had the right idea in suggesting a report on whether they were keeping their promises. This might help make up for the fact that most EU Member States have done a pretty good job over the years at breaking long-standing promises to provide finance to poor countries, whether as aid or climate finance under the UNFCCC. The Spanish Presidency started well, collecting information on Member State pledges, but then a problem arose. The EU's commitment first made in Brussels at the December leaders’ summit did not address whether the promises they were making were “new and additional” as required by the Copenhagen Accord.  It is clear that this means over and above the target to provide at least 0.7% gross national income (GNI) in official development assistance (ODA). Climate change imposes new costs on developing countries, so new money is needed to tackle it. Instead of owning up to relabeling old some ODA pledges and then adding them to the new fast-start climate finance total, EU governments thought it best to keep quiet and hope no one noticed . . . but some did.  Failing to ensure that climate finance is new and additional to existing ODA targets takes money that would otherwise have been available for spending on schools and hospitals in developing countries, to name one example. And that at a time when budgets for essential services are already being cut in the face of economic downturn.  And we won't mention more than just this once that most countries aren't even achieving their longstanding ODA pledges. All that said, ECO welcomes the EU’s readiness to face the music in today’s side event. We hope they come clean about recycling past promises and are ready to answer questions on the scale of money going to different countries, and will detail how it will flow through bilateral and multilateral channels, as grants and loans, and for adaptation and mitigation. This is just a preliminary report, and the EU will have another chance to get it right in the annual report due at COP 16. But to provide genuine transparency, and to ensure that the US and other rich countries are held accountable too, they should seek a common reporting framework. The Secretariat could be asked to take that on and add meat to the EU’s bare bones.

Related Newsletter : 

Time to close the Finance Gap

ECO has been excited about the buzz that’s been created around closing the gigatonne gap over the last few days. Delegates are waking up to the need to raise ambition, close loopholes and seek new and innovative solutions to cutting emissions. But ECO would like to remind developed country delegates that it’s not just a mitigation gap – it’s a finance gap too. In line with the mandate to implement all elements of the Bali Action Plan, billions in new, additional, public finance are needed to support nationally appropriate mitigation actions in developing countries.  Failure to do so would keep the gigatonne gap wide open.

Related Newsletter : 

Taking Stock of the Gigatonne Gap

ECO is deeply concerned that the planet is on a fast track to dangerous climate change. The lack of ambition and plain inaction by the world's richest countries has created a negative spiral that needs to be broken. So-called 'political realism' and current lifestyles will use up the global carbon budget by the early 2020s. Not unlike the financial crisis, an emergency bail-out package is needed to prevent a climate collapse.

There is a widely-acknowledged ‘gigatonne gap’ from the mitigation pledges made at Copenhagen to a global carbon budget and realistic pathway that will be consistent with avoiding dangerous warming of 2º C or more, not to mention 1.5º C, above pre-industrial levels.

On the current path, science tells us we are facing a world that is at least 3º to 4º C warmer. What does that mean?  The answers are shocking. This could spell the extinction of countries, ecosystems and species. People will perish. It is already starting to happen. Parties need to urgently take ownership of this gap and acknowledge the responsibility they share in closing it.

ECO has highlighted before that the complexity of the climate problem has instilled fear and mistrust – particularly between industrialized and developing countries. Without fairness and respect we will never have trust. The reality of historic responsibility, the difference in per capita emissions, the primary importance of development for countries whose populations struggle with the crisis of poverty – these are very real. The dynamic of fear and division is obscuring the urgency of the disaster we face.

The fundamental reason why the world is heading for a climate disaster is the feeble ambition on reduction targets and finance coming from all industrialized countries. In particular, the excessive emissions from the US now and to 2020 and beyond are stretching the world’s carbon budget beyond the breaking point.

Whatever else we could say about Copenhagen, it certainly underlined the need for a Fair, Ambitious and Binding agreement which combines the environmental security of a robust emissions cap with a much-needed energy and economic transformation spurred by policies, measures and innovation. Given the size of the gap, we urgently need creative thinking and courageous action.

Further work by SBSTA can support the analysis of available solutions and taking the necessary decisions. ECO proposes that Parties agree, here in Bonn, to hold a workshop under SBSTA Article 9 (‘Scientific, technical and socio-economic aspects of mitigation of climate change’) in the first inter-sessional before Cancún, to come to a common understanding of the scale of the gap, and for steps that could and must be taken to address it.

Developed countries have not adequately reduced their emissions since agreeing the Convention in 1992. The aggregate target of -5% agreed in Kyoto may have been a political success, but it was far from consistent with the scientific realities even at that time. And in the event, many Annex I countries haven't achieved those modest targets, and some have barely even tried. They need to do more.

And still, ECO also notes that fingerpointing is not a survival strategy. We will only stay afloat with a concerted effort from all, according to their abilities.

Climate realism requires action, not new accounting tricks.  So another problem is the loopholes that were built into the Kyoto architecture . . . LULUCF rules that hide increased forestry emissions, prodigious offsetting with little additionality (and not even targeted towards sustainable low carbon development), and AAU banking that has become an increasing concern as the end of the first commitment period approaches. The Secretariat’s technical paper recalculated the levels of effort pledged and sheds a clear light on the assumptions behind the targets. While these issues are part of the KP negotiations, they must also be put in a consolidated context.

Finally, ECO suggests that the workshop explore the potential of new sources, sectors and approaches to reduce radiative forcing in the atmosphere and generate funds to support action. Such innovative approaches could include, inter alia:

* International aviation and shipping, a large and rapidly growing source of emissions (business-as-usual would result in 2.2 Gt CO2 by 2020), and one that can be a significant source of climate finance.

* Designing REDD, market mechanisms, NAMAs, etc., to avoid double-counting of both developed country mitigation and financial support obligations, all relevant to the MRV agenda item.

* Reducing emissions of black carbon.

* Inclusion of new F-gases in the climate regime, as technically feasible.

* Taking industrial GHGs (N2O, HFCs and NF3) out of the CDM. Their abatement costs can be better met through a fund. The CDM can be better targeted at transformational measures.

A comprehensive and realistic approach to closing the gigatonne gap is needed now. The inclusion of new sources and sectors should not replace efforts in existing sectors, but be additional so as to bridge the gigatonne gap and peak global emissions by 2015.

Related Newsletter : 

Adaptation Fund Review

The Adaptation Fund (AF) is a self-standing fund established under the Kyoto Protocol in order to finance concrete adaptation projects in the most vulnerable countries. It has several unique and innovative features, including 'direct access', a new level of developing country participation, a new revenue source, and an equitable governance composition. These elements give the Fund the potential to contribute significantly to exploring new ways in international cooperation on adaptation.

The AF Board has also developed a transparent working mode and allows observers to publicly comment on project proposals before their adoption. Furthermore, the strategic priority that the particular needs of the most vulnerable communities and people should be given special attention is an important new step.

ECO has been closely following the development of the AF and recognises that establishing a proper framework for the AF Board has been quite an achievement. With the accreditation of the first National Implementing Entity, the Centre de Suivi Ecologique (CSE) from Senegal, the direct access modality became a reality. The recent call for project proposals by AF for funding through the AF marks the beginning of the long-awaited implementation phase.

It is remarkable that interventions in yesterday´s SBI plenary uniformly supported the Adaptation Fund, across both developing and developed countries. This is a clear sign of progress.  In addition, Spain’s contribution of 45 million and Germany´s pledge of 10 million euro to the AF will help set up the ground-breaking facility under the Kyoto Protocol.  Other developed countries ought to immediately follow this positive example of fast-start finance.

During the SBI session here, Parties will consider the Terms of Reference for the review of the Adaptation Fund. ECO considers that the review should be based on the positive development of the Fund, the importance of its innovative features and particularly its direct access pilot. The Fund is now just becoming fully operational, so some of the necessary lessons will not be fully captured in the next six months. But the review should in particular look at the following aspects:

* In order to play out its full potential, the resources for the Adaptation Fund have to be increased, and the review should consider how to raise those funds as soon as possible.

* The current set-up has improved significantly compared to early days, but the review should nevertheless address quality, cost-effectiveness and options for further improvement.

* The appropriate role of the AF in the broad finance architecture now being shaped must be discussed.

Overall, the review should seek to strengthen the Adaptation Fund's innovative features and help overcome operational barriers.

Related Newsletter : 

12 Steps to end carbon dependency

In a number of countries around the world, there are "12 step" programmes to help people deal with addiction.  This started with Alcoholics Anonymous in the 1930s and spread to many other self-help organizations.

Today, 12 step programmes are mostly in English speaking countries, and it so happens that many of them like Canada, Australia, the US and New Zealand are particularly tied to their emissions and might appreciate some help. The basic concept of 12-step programs starts from the reality that simply renouncing addiction is not enough; admitting the problem and asking for help from others is needed to make positive steps in the right direction.

So if you're struggling with the carbon habit, ECO has drafted a programme of our own.  If you like, call it Carbon Anonymous.  In line with the traditional formula, it comes as 12 declarative statements:

“1. We admit that our economies are controlled by our carbon addiction and have become unmanageable.

“2. We have come to believe that clean development could restore us to sanity.

“3. We will make a decision to turn our will and our lives toward caring for the planet and humanity.

“4. We will make a searching and fearless inventory of our nation’s emissions and their impact on humanity and the planet’s ecosystems.

“5. We will admit to ourselves and to other nations the exact nature of our divergence.

“6. We will be entirely ready to ask for assistance to remove all these defects of policy.

“7. We will humbly ask the world to facilitate the removal of our shortcomings.

“8. We will make a list of all persons, nations and species we have harmed by our emissions, and be willing to make amends to them all.

“9. We will make direct amends to such people, nations and species wherever possible.

“10. We will continue to make accurate national inventories and report them.

“11. We will seek through negotiation to improve the scale of our emission reductions, praying only for the political will to carry them out.

“12. Having then gained an economic awakening as a result of these steps, we will carry the message of clean development to all other nations on the planet, and practice these principles in all our affairs.”

Will the Carbon Anonyous 12-step programme really work?  ECO doesn't know for sure, but we have to try everything we can to get our most carbon addicted economies onto a better track, for their own sake and for the planet.

Related Newsletter : 

Deja vu? Or a renewed focus...

And now we’re all here again, what is it that needs to be accomplished?

Clearly, on the KP track lamentably little progress has bee made over the past four years. ECO suggests that the following issues must be agreed this year, as a priority:

  • LULUCF accounting rules – Annex I countries must stop trying to hide emissions from forest management and commit to reduce them instead.
  • CDM/JI/emissions trading modalities – These must be revamped to avoid double counting of mitigation and financial support obligations, and to keep inappropriate sectors, such as nuclear and CCS, out of the CDM.
  • New sources and sectors and other accounting rules around them (the “other issues”) should include new gases to the extent that is technically possible, and use the new IPCC AR4 global warming potential (GWP) measures over the 100 year timescale.
  • The commitment period length, base year and the other modalities that will define the calculation of the quantified emission reduction obligation (QERO) and assigned amount from country pledges (here's a free hint! correct answers for the first two are: 5 years, 1990).

When the KP was first negotiated, Parties agreed targets first, and the following years turned into excruciating negotiation exercises that ended up agreeing a series of loopholes. ECO has long maintained that the rules should be negotiated first, so that the science-indicated reduction target of at least 40% on 1990 levels by 2020 can be fairly shared between the Annex B Parties.

For this reason, negotiating time in Bonn and for the intersessionals should be concentrated on clearing these issues, so that the targets and then the discussion on QEROs can be resolved rationally and equitably, based on a clear and common understanding of the underlying scope and rules of accounting. In the short term, then, negotiating time should be concentrated on resolving the issues listed above.

In the LCA track, a balanced agreement is needed by Cancún, with each of the Bali Action Plan building blocks being addressed. In Copenhagen, the LCA negotiating texts on adaptation, technology and REDD+ were well advanced, and agreement should be possible on these issues this year. Additionally, finance, MRV and low carbon development plans should be among the agreements reached this year.

Adaptation

Most Parties seem to agree that progress can be made in Bonn on the design of an adaptation framework for implementation. However, developed countries should stop resisting a firm institutional link that ensures the provision of regular, reliable and truly additional grant-based finance needed to make this framework a real implementation action tool.

Bonn II could also achieve greater clarity on the enhancement, establishment, composition and role of regional centres and initiatives as well as the proposed establishment of an adaptation committee. Another issue that must advance is how to address unavoidable loss and damage from climate change impacts when adaptation is not longer a viable option, e.g., when water resources disappear due to shrinking glaciers and livelihoods become untenable. Progress in Bonn would be achieved if Parties clearly recognise the need for an international mechanism to address loss and damage, and identify key substantive issues to be addressed in subsequent sessions.

Technology

Technology negotiations have progressed enough that areas of clear convergence can be identified, especially regarding the establishment of a technology mechanism. More clarity is required to ensure that it operates within UNFCCC authority and principles. Other areas to be further clarified are the role of regional innovation centres, as well as criteria for MRV for technology support and actions that may take place outside the UNFCCC mechanism. Negotiators should be willing to show more flexibility regarding intellectual property issues, acknowledging the valid concerns of all parties, while focusing on a solution that will preserve incentives for innovation and ensure and expand production of, and access to, climate technologies for mitigation and adaptation.

REDD+

While ECO understands and agrees that reliable and adequate long-term funding is essential, goals for REDD and the conservation and enhancement of carbon stocks remain essential. There should also be a finance goal for support, either a specific range – a number of studies have indicated that halving emissions by 2020 would cost $15-35 billion in 2020 – or simply an agreement to finance achievement of the carbon-related goals. It is crucial to move on this now given the speed of REDD negotiations and the launch of the REDD+ partnership for fast-start financing last week.

Successful mitigation outcomes from REDD+ activities by developing countries,  supported by developed countries, depends on using improved methodological guidance for estimating emissions by sources and removals by sinks. SBSTA needs to progress this issue.

Climate integrity is not the only concern for REDD+ activities; safeguards not only need to be agreed, but the LCA text needs to operationalize them.

Finance

Climate finance can be a valuable opportunity to build some momentum in a process that needs a shot in the arm. Here in Bonn, parties should set ambitious goals for finance outcomes in Cancún, whether or not a comprehensive deal is agreed by then. To be more precise, by Cancún parties can finalize decisions covering finance MRV, governance and institution, and make substantial progress on operationalizing sources of finance to mobilize funding at the scale needed.

But it must be decided here in Bonn to achieve this by Cancún, and that means a negotiating text must be developed that will result in this outcome. ECO gives fair warning: for any parties thinking of blocking progress on finance because they didn’t get what they want in other areas, it's time to open eyes to the bright light of negotiating reality.

MRV

ECO recognizes the crucial role of gathering, in a consistent and comparable way, accurate information relating to emission reduction activities undertaken by Parties, as well as the support provided. Indeed, this is central to the integrity of the climate regime. Thus, it is vital to continue discussions on the nature of MRV, in particular its scope and architecture, that is tailored to Parties’ differentiated obligations.  In so doing, Parties should agree a process at this meeting to elaborate the main issues associated with MRV. Additionally, Parties should give the Chair a mandate to develop text on MRV for this and future negotiations. Parties should also consider how to provide capacity building and support to construct and maintain domestic reporting and verification systems in non-Annex I countries.

Zero- and Low-Carbon Action Plans

As part of the essential process to build trust among Parties through transparency of action, ECO would like to highlight the need to agree by Cancún that both developed and developing countries (with optional participation by LDCs and SIDS) will produce national plans showing how developed countries can get their emissions to near-zero by 2050, and how developing countries can reduce their emissions -- with support from developed countries as defined and agreed previously, including the Convention and the Bali Action Plan -- in line with the required overall global carbon budget.

Time for action is so short, there is no time to lose, and actions are needed now in line with the scientific imperative. There is much that can progress at the multilateral level this year. In Bonn, Parties must build upon progress in the LCA and KP tracks to date and define the expectations for a balanced and ambitious outcome in Cancún.

#-#-#-#-#-#-#-#-#-#

Developed countries should produce Zero Carbon Action Plans (ZCAPs) to map out the institutions and policies needed for them to achieve their targets under a five-year commitment period, with the longer-term aim of near-total decarbonization by 2050.  ZCAPs would also serve to document how each country proposes to achieve their support obligations to developing countries.  Both parts of the ZCAP would be subject to MRV procedures to help ensure the environmental integrity of the deal and also to give all countries increased confidence that others will not free-ride.  The long-term component allows countries to begin to develop a long-term vision for their economies and to plan for related socioeconomic transition. The reporting, review and compliance components of the ZCAP proposal are therefore essential to the integrity of the overall deal and giving confidence that targets will be met.

Developing countries, over the short to medium run and depending on capacity, will produce visionary low-carbon action plans (LCAPs) that provide a road map and outline a trajectory for their pathway to a low-carbon and climate-resilient economy, clearly linking development and climate goals to achieve sustainable development.  These plans should be developed through a bottom-up, country-driven process and should build upon national plans for adaptation and mitigation, recognizing the linkages already in place in many countries between these issues.  They should provide an integrated framework where a country's NAMAs can form a coherent package.  These NAMAs would then form essential building blocks of a LCAP, and together their cumulative impact should result in the long-term objective of a low-carbon economy as well as stay within atmospheric limitations.  Mitigation efforts together with adaptation all contribute towards the overall LCAP.

ZCAPs and LCAPs link to a number of existing agenda items.  They are in the LCA text and are also relevant in the MRV discussions (MRV mitigation on non-Annex I, Annex I, the “firewall” between them, and MRV finance).  Because ECO sees them as being related to national communications, but forward- rather than backward-looking, SBI agenda items 3 and 4 (national communications for developed and developing countries) are also relevant.

Related Newsletter : 

Finance: Flashback or Fast Forward?

While seriously short of the mark, some limited progress was made on climate finance in Copenhagen. Developed countries promised to mobilise $100 billion per year and resolved to establish a new fund to deliver it.  All that opens the door to to fast-forward, not slow-walk, this building block in 2010. Cancún must offer more than just a flashback, a rehash of weak pledges. To unlock wider progress in the negotiations, Cancún will need to deliver a robust agreement on:

* Financing institutions, including establishment of a new fund under the UNFCCC and provisions for its  governance.

* Scaling up new, additional and predictable climate finance through innovative sources, using the finance targets agreed in Copenhagen as a milestone for progress.

* Institutions, guidelines and procedures for measuring, reporting and verifying support for climate actions as well as the actions themselves, including a registry for both actions and support.

The task here in Bonn is to define clearly and lock in the loose pledges of Copenhagen, and provide a road map towards ambitious, binding finance commitments in Cancún. This will mean continuing the discussion of sources in the AWG-LCA so that negotiators can take the appropriate recommendations of the Advisory Group on Climate Finance (AGF), build on them, and agree a package of new sources that can meet the scale of needs. It will also mean clarifying the minimum scale of public finance required, to turn big numbers into meaningful commitments. Finally, it will mean taking a practical, no-nonsense approach to texts on architecture and governance to deliver finance that works for the developing countries it is meant to assist.

Real progress on climate finance at this session here in Bonn offers the best chance to lift the cold, damp, Copenhagen fog and reveal the path to sunny success in Cancún.

Related Newsletter : 

EU study says -30% within reach... but how much will it grasp?

Go Europe! It’s been a while since the EU came up with anything new on the climate front, so ECO is delighted to reveal that the Commission published a paper just last week, demonstrating unequivocally that a -30% target (from 1990 levels) is not only possible, but easily possible for Europe. All the same, the paper doesn’t go anywhere as far as is achievable.  The -40% target, which would finally push the agenda toward real ambition, has not even been analyzed (for shame!).  And the -30% target is based on the assumption that a mere 50-50 chance of staying below a rather uncomfortably balmy 2º C increase is adequate -- but let’s not quibble too much. At least the EU, unlike, say, Canada, is looking at the option of increasing its pledge, and that is progress. Even though the Commission's economic analysis does not take into account all additional benefits, it is still very clear that there is no reason at all why the EU cannot increase its pledge. Even better, it should agree that the -30% should be done completely through domestic action, so that it is on its way to becoming a near-zero carbon society by 2050. The Commission’s paper provides the facts on which Member States will base their decisions on whether or not to unilaterally take on the higher target. This should happen at the EU Heads of State summit in September. If you, like us, want to see the EU break away from business as usual at -20%, here are a couple items to mention to any EU delegate you pass in the hallway here in Bonn. * First, ask them to ensure that every European Head of State reads the Commission analysis. The figures in the paper show that there is no real impediment, financial or otherwise, to a unilateral EU move to -30%. * Second, since the most recent data show current emissions already at 14% below 1990 levels, the EU is already halfway to reaching -30%. * Finally, EU international climate leadership has always had the most impact when leading from the front, as demonstrated with EU-led initiatives like the 2o C limit and fast-start finance. ECO expects EU delegates will be delighted to express their commitment to EU leadership on climate change, so don’t be shy!

Related Newsletter : 

Fast trick financing?

Remember the G8 summit in L’Aquila this year? World leaders proudly offered US$20 billion to tackle the global food crisis. Subsequently it was reported that only US$3 billion was going to be ‘new’ money. The rest had already been committed or was to be handed out as loans.

This scenario makes ECO wonder: How much of the €2.4 billion a year that the EU has now put on the table for fast track financing, over 2010-2012, will be new and additional? ECO’s estimate is that it will be less than 5%. We fear that most of the remainder (EU, prove us wrong!) will come from re-packaging and double-counting previous pledges. ECO requests EU delegates to be transparent and accountable and explain to developing country delegates how much of the €2.4 billion has already been pledged elsewhere.

ECO points out that both fast track finance and long-term financial support in particular need to be committed, and provided in addition to developed countries existing ODA targets. This is because climate finance, which is meant to meet the additional cost of adapting to climate change, is not aid.

The means to overcome double counting is transparency. There has to be clear reporting on what is ODA, what is additional to ODA for climate finance and what has been pledged. Under the Copenhagen Agreement, Parties must agree that funding contributed once as climate finance will not be pledged elsewhere. There is ample opportunity over the next four days to ensure that the five months after the empty coffers of L’Aquila, world leaders will not be making the same mistake again.

Crunch time in Copenhagen

As delegates return to the Bella Center today, they are joined by ministers and subsequently by heads of state/government. What issues should they focus on to achieve a fair, ambitious, binding and timely deal? ECO is glad you asked, because we have some very clear suggestions.

Mitigation: On Saturday AOSIS again drew attention to the threat to survival for many small island states and LDCs. They are not playing negotiating games.  When they push for 45% cuts by developed countries on 1990 levels by 2020 they are defining their right to survive above water.

And yet as we enter the second week of negotiations, developed country pledges for 2020 emission cuts in aggregate remain desperately low.  Ecofys and Climate Analytics put the total cuts at a dismal 8-12% on 1990 levels. Once loopholes such as dodgy LULUCF accounting and hot air are taken into account, this could end up as a 4% increase on 1990 emissions.

This low ambition has not been helped by the EU. It could have sent a positive signal to the talks by raising their target at their leaders summit, potentially starting a chain reaction of raised ambition among other developed countries. But no, the EU dodged its opportunity to lead at this key moment.

Not only are targets a problem. Countries continue to bicker over the widely accepted baseline of 1990, there is still no clarity on the straightforward issue of a five-year commitment period, nor on a scientific review clause by 2015 at the latest, to be informed by the IPCC’s fifth assessment report.

So ECO draws the attention of all developed country ministers and heads of state/government to the real challenge before them.  They must raise their targets, close the loopholes, agree on a 1990 base year and five-year commitment periods, and impose an early scientific review. For small island states and other poor and vulnerable countries this is non-negotiable as it is surely a matter of survival.

Adaptation: The unavoidable loss and damage from climate change must be adequately addressed, since it is a result of developed countries failure to mitigate in the past. Greenwashing must not sacrifice the most vulnerable.

Hence, adaptation is a crucial element of the Copenhagen agreement. Recalling in-depth studies by the World Bank, UNFCCC and others, ECO wants to see at least US$50 billion annually for adaptation in developing countries in the next commitment period, increasing to US$100 billion by 2020. The delivery of this finance must be measured, reported and verified. It must be additional to development aid commitments and not current commitments repledged over and over again. The existing Adaptation Fund should play an important role in the delivery of this finance and also as part of fast-track action.

As developing countries implement adaptation, ECO expects they will give priority to the people and communities most at risk from climate change.

Finance:  Last week saw the unveiling of a variety of proposals from both developed and developing countries. This is a welcome display of initiative at a time when that is sorely needed, but ECO would like to emphasise two important points.

First, kick-start finance must come as a part of a long term, legally binding agreement to reach the figure of US$195 billion per year by 2020. This amount must be additional to ODA commitments if it is to contribute effectively to sustainable development.

Second, this funding should flow through a consolidated fund under the authority of and fully accountable to the COP.  Direct access to funding and accountability to those most affected by climate change are also essential. Once again clarity is needed on accountability to the COP and the role that affected communities will play in the suggested proposals.

Last week also saw renewed enthusiasm for innovative sources of finance, with the spotlight focusing on fossil fuel subsidy shift, special drawing rights and financial transactions taxes. This shows a useful concentration of minds; but these ideas still need to be transformed from policy concepts into workable text.

And speaking of text, ECO reminds Parties that bunkers are already in the negotiating text with US$25-37 billion per year of reliable and sustainable financing waiting to be picked up by 2020. It’s a good moment for this to gain further momentum among the Parties. While we are at it, why not include some provisions for AAUs auctioning?

Legal Matters: In the first week, legal form issues have taken center stage with Tuvalu taking the lead, and new drafts provided by both Chairs. ECO welcomes the emerging consensus that both AWG tracks are moving towards legally binding text. Time is tight, so Parties must be willing to work seriously with the text that they have. Ministers and heads of state/government must then step in to resolve contentious issues. Early progress this week must occur to raise the prospects of reaching a full agreement on substance and legal form here in Copenhagen.

It is crunch time and these are the core issues that should occupy your minds this week. Success or failure on these questions will not only determine whether an agreement can be reached, it may determine your legacy.

Pages

Subscribe to Tag: finance