CLIMATE FINANCE: UP AND NOT DOWN!

 

And what happens now that we know Fast Start Finance (the money pledged between 2010 and 2012) was mostly a false start? Yes, ECO did the maths and estimates only 33% of FSF was “new” money (that is, additional to existing, pre-Copenhagen pledges), and around 24% additional to existing aid promises. Only one-fifth of finance was spent on adaptation, and less than half was available as grants. It seems developed countries need to re-learn some basics about climate finance. Which part of “new and additional, predictable, and adequate in relation to rapidly spiralling needs…with balanced allocation between mitigation and adaptation” are they failing to understand?

 

And to those who need illustration of “spiralling needs”, please count the unprecedented number of climate related disasters in 2012 which – along with sea-level rise, and the gradual but deadly effects on agricultural and

fresh water systems – mean that the bill from carbon pollution just keeps going up and up. If we are to tackle the consequences of current inaction, the hundred billion annual figure promised before Copenhagen is now looking implausibly small.

 

Here in Doha, we are facing a “finance cliff” with fast start finance ending just at the point when we need ramping up. ECO is concerned that many developed countries have arrived in Doha unwilling to pledge new resources. For vulnerable countries this is a daunting prospect, and will hugely reduce their trust that these countries intend to make good on their $100 billion a year by 2020 promise. By holding back on money they have promised, developed countries are shooting the 2015 global deal in the foot.

 

Luckily, ECO is giving countries two extra weeks to do their homework on how to:

 

SCALE UP – ECO will not accept Doha as a success without reassurance that climate finance will go UP, not down and especially not off a cliff in 2013. For 2013-2015, developed countries should at least double the amount delivered under Fast Start Finance levels and channel US$10 to 15 billion to the Green Climate Fund.

 

PROGRESS ON SOURCES – To sleep tight, ECO needs to see a scaling up of climate finance to meet the $100 billion per year commitment by 2020. Advancing promising new sources of finance will be crucial to provide

predictable and scalable finance and needs genuine commitment by developed countries. ECO supports the recommendation on the Long Term Finance Work Programme to establish a high-level experts group across the ICAO, IMO and UNFCCC secretariats to examine finance-raising options from a fair carbon pricing mechanism. ECO will give top grades to the EU member states who allocate at least a quarter of the upcoming Financial Transaction Tax to the Green Climate Fund.

 

STRENGTHEN MRV – False Start Finance has taught ECO the tricks for how to count existing aid as new and additional. ECO is now looking forward to learning how to do things the right way. Parties now need to agree on MRV reporting formats on climate finance that help assess whether the promises are “new and additional” finance, and ensure “balanced allocation between adaptation and mitigation”. It is high time that the reporting is transparent, verifiable and clarifies what is “real” and “legitimate” climate finance.

 

HIGH-LEVEL POLITICAL PROCESS – Finally, ECO intends to be an ongoing and relentless nuisance, by insisting on a high level political space for negotiations on finance, if and when the AWG-LCA comes to an end after COP18. In whatever context negotiations continue, finance MUST NOT be relegated to the status of a “technical” issue. There is nothing technical about being on the receiving end of climate disaster. Lives and livelihoods are at stake, and we expect this issue to be treated with the political seriousness it deserves.