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.