Close the gap: shift investments
13 March 2014
Once the negotiations move into a contact group, ECO can only hope that delegates will see finance as a central pillar of the 2015 package. Developed countries must show a record of year-by-year increases and projections of their continued increase towards 2020. Finance is instrumental to low global emissions and climate resilient development. A failure here will scupper any hopes for success in Paris.
South Africa has reminded everyone that the funding gap remains huge: trillions of investment dollars need to be shifted. All Parties, developed and developing, have parts to play in setting helpful policy frameworks and in adopting fiscal measures designed to make investors think about where their money is going.
Providing public finance will remain key, too, such as support for adaptation in vital sectors like food production in poorer countries and mitigation in less developed countries. Parties will also have to leverage large volumes of private finance and shift investments much larger than the promised US$100 billion a year by 2020.
The debate over finance is part of the equity and adequacy debate. ECO suggests that the first pillar for developed countries is domestic emission cuts, and the second is the provisioning of finance. ECO can’t help but think that, when developed countries prepare initial offers for their nationally determined contributions, they would be well advised to keep the funding gap in mind, and ensure that their contributions are helping to close it.
Alongside ambitious offers for cutting their emissions, developed countries should also include information on what public finance they intend to provide now and beyond 2020. It’s also important that they note what strategies they will take to mobilise additional finance to shift global investments.
South Korea (speaking for the EIG) suggested that such contributions could be based on CBDR+RC, and be made by those countries in a position to do so. Developing countries could, when preparing their contributions, explain what finance (volume, instruments, etc.) they would need to go an extra mile beyond what they can do without support.
ECO, like other observers, has of course noticed the unwillingness of some developed countries to even consider providing finance as part of their contributions to the 2015 deal. ECO wonders if this resistance illustrates a general unwillingness to hammer out a truly fair and equitable deal. We really would like to be convinced of the contrary here in Bonn.