One may well wonder, what could the climate change debate possibly learn from other fields?  ECO looked around a bit and discovered some interesting things about the Global Fund to Fight AIDS, Tuberculosis and Malaria.

The recent replenishment meeting of the Global Fund ended earlier this week in New York.  And despite the lingering recession in many parts of the world economy, the respective contributions resulted in pledges of $11.7 billion over the next three years, an increase of 20% compared to 2008-2010. That is good news and shows that the international community is still able to take action when urgent global challenges have to be addressed.

Of particular note for the climate debate is that the Global Fund is the pioneer in direct access. Donors seem to trust its approach, which so far has financed programmes in 140 countries. The United States is #1 among donors and has pledged $4 billion for the next period.

Furthermore, the Global Fund has some innovative institutional features which ECO thinks should be considered in the setup of the new climate fund. 

First, the Fund itself is an administratively autonomous international financing institution, with its own Secretariat based in Geneva. The only formal link to an existing institution is that the World Bank serves as Trustee.  The Global Fund was set up very quickly, with the Secretariat being established six months after the principal decision to establish the Fund, and the first grants were approved three months later.

On the national level, multi-stakeholder country coordinating mechanisms are the key players. These include the government and stakeholders such as NGOs, scientists and the private sector. This is an instructive example given the diverse responses that climate change will require on all levels of society in developing countries.

On the international level, the Fund is steered by a board composed of 20 voting members –  14 from governments/regional organisations and one each for the private sector, private foundations, developing country NGO, developed country NGO, and a representative from local communities. Representatives from international organisations are members of the Board without voting rights. It is a global partnership to
address a true global challenge.

Of course, the climate fund can’t just be a copy of the Global Fund. For one thing, the scale of climate resources must very soon be significantly higher than the $3 billion a year in the Global Fund budget. 

In order to fully prepare for the future, one must learn from the past. For instance, the US proposal, supported to some degree by other countries, that would set up the climate fund as a kind of reinvention of the GEF, does not do so.  Instead, the future climate architecture should take note of lessons like those offered by the Global Fund.

The El Nino/La Nina-related monsoon floods that have devastated Pakistan since July highlight the fast growing need for an international risk transfer mechanism for weather-related events.

With the sheer size and protracted duration of the disaster, as well as donor
fatigue, disaster response funding has fallen far short of the mark in Pakistan’s time of need.  UN Secretary General Ban Ki Moon bemoaned the fact that too little aid is coming too late to help the estimated 21 million homeless and flood-affected people of Pakistan.

How could an international insurance mechanism within the UNFCCC process help in case of such events? The first step is to link serious risk reduction measures to wider climate risk management strategies.

The second is to ensure that an international insurance approach, supported by the international community, catalyses adaptation and risk management in countries facing rising climatological risks. The benefits
should include incentives focused on risk reduction, and advance planning for adequate
financial resources when and where they are needed.

Experience has shown that insurance mechanisms can make payouts rapidly. In the Caribbean, CCRIF insurance payouts were the first to reach Haiti after the calamitous earthquake – a month before humanitarian donations began flowing.

One challenge is the difficulty of guaranteeing that insurance payouts will be used
effectively and appropriately by participating governments. One way to address this concern is to establish national climate change funds to serve as the recipient of
international insurance payments. Bangladesh has such a fund, governed by a multistakeholder committee (rather than a government ministry).  In this approach, payment distribution modalities can be devised before disaster strikes. This also complements wider adaptation strategies by encouraging the coherence of risk management strategies and ex ante planning.

Chapter 2, paragraph 8 of the AWG-LCA text considers the establishment of international insurance coverage as one function of a broader mechanism to address loss and damage from climate change. Devastating events – the flooding in Pakistan is an exemplary case – underscore the urgency. This kind of mechanism should be one of the operational elements of the adaptation framework negotiated in the UNFCCC process and should be financed from a share of international funds provided for adaptation.

Finally, setting up regional pilot programs through fast-start finance could generate important lessons on the specific operational modalities of such a mechanism.  That will catalyse adaptation, promote more effective risk management, and support humanitarian efforts in vulnerable countries.

Whilst parties are coming to the realisation that we need to move on from ‘nothing is agreed until everything is agreed’, there is not much movement yet toward ‘nothing is agreed until enough is agreed’.  For those who don’t yet have a firm grasp on what ‘enough’ is, have no fear. ECO is here to show the way.

‘Enough’ is a set of outcomes that doesn’t just harvest the low hanging fruit but also cracks some serious political nuts and builds essential trust, so that next year negotiations don’t go around in the same circles as this year . . . and the year before that, and . . .   

‘Enough’ clarifies the road ahead: what it is that Parties are negotiating towards (a Fair, Ambitious and legally Binding agreement), by when (COP 17 in South Africa) and through which milestones.

So here are some highlights from the Cancun Building Blocks which will be unveiled by the Climate Action Network at its side event today:

• Agree a shared vision that keeps below 1.5o C warming, links it to the short and long term actions of Parties, and outlines key principles for global cooperation.

• Establish a new climate fund along with a governance structure that is transparent, regionally balanced and ensures the COP decides policies, programme priorities and eligibility criteria. Agree on a process to secure sufficient scale and sources of finance.

• Establish an adaptation framework along with its institutions, goals and principles and a mandate to agree a mechanism on loss and damage.

• Put in place a technology executive committee and provide a mandate to agree measurable objectives and plans.

• Agree to stop deforestation and degradation of natural forests and related emissions completely by 2020, and ensure sufficient finance to meet this goal.

• Implement the roll-out of a capacity building program.

• Acknowledge the gigatonne gap between current pledges and science-based targets, and ensure the gap will be closed in the process going forward.

• Agree a mandate to negotiate by COP17 individual emission reduction commitments for industrialised countries that match an aggregate reduction target of more than 40% below 1990 levels by 2020.

• Agree that each developed country will produce a Zero Carbon Action Plan by 2012.

• Minimise loopholes by adopting LULUCF rules that deliver emission reductions from the forestry and land use sectors; market mechanism rules that prevent double counting of emission reductions or finance; and banking rules that minimise damage from ‘hot air’ (surplus AAUs).

• Agree on producing climate-resilient Low Carbon Action Plans for developing countries, and establish a mechanism to match NAMAs with support. Mandate SBI and SBSTA to develop MRV guidelines for adoption in COP17. 

• Commission at COP 16 a technical paper to explore the mitigation required to keep warming below 1.5° C, and outline a process to negotiate how that effort will be shared between countries.

• Agree a clear mandate that ensures that we get a full fair, ambitious and binding (FAB) deal at COP 17 in South Africa – one that includes the second commitment period of the Kyoto Protocol.  It is this clear pathway forward, with an agreed destination and an agreed route, that will make agreement at Cancun possible. 

Meaningful progress in each area, agreement to work toward a legally binding deal, work plans agreed on each key area, and a long term vision for future negotiations, will deliver a successful and balanced package.

There is more than a touch of irony that on the same day the Secretariat released a compilation of Party submissions on ways to enhance the engagement of observer
organizations, those same groups were kept out of all AWG-LCA drafting groups. 

ECO hears the reasoning for closed sessions is that negotiators will speak more freely and make better progress without representatives of civil society in the room. This is not entirely convincing, but ECO will certainly be looking for demonstrable signs of progress the rest of this week in Tianjin.