The good news first: going only by sheer numbers, the European Union is delivering on the fast start funding commitment it gave on behalf of its 27 member countries during the COP15 in Copenhagen as part of the Copenhagen Accord political final declaration.
The bad news: it is far from certain whether that commitment represents “new and additional” money as promised in the Copenhagen Accord, or rather the ingenious creativity of the European block – very much wanting to be perceived publicly as the “good guys” on the question of delivering money to fund adaptation and mitigation actions in developing countries — in double-counting, recycling, overestimating or blatantly hiding the real figures, as some observers charge.
During a side event at the Bonn climate talks on Thursday, the representatives of the Commission and several EU countries delivered ten fast-paced presentations, choke-full of numbers which aimed at knocking out the air – and the many doubts – from the listeners in an already pretty airless overcrowded meeting room. This was a more detailed presentation than the information gathered from an EU document leaked two weeks ago, which had left observers of fast track climate financing underwhelmed.
A warning to those reading on: this blog article will have a fair amount of numbers – for a reason. There is not yet a detailed downloadable report on the status of the fulfillment of the fast start financing pledges by the EU and its individual member countries available, where you could read up on those numbers at your own leisure. Such an EU report will have to wait until the COP 16 in Cancun this December, with yearly updates promised thereafter. And with it a clarification on whether the EU collectively is any closer to understanding additionality as over and above the target to provide at least 0.7% of gross national income (GNI) in official development assistance (ODA), as many civil society groups do.
Here come the numbers: The EU claims to have collectively reached its pledges of €2.4 billion in fast track this year, while having even confirmed pledges over the three year fast start period (2010-2012) – which are of course just confirmed pledges, not actual sums paid out – that exceed the promised contribution of € 7.2 billion by € 350 million. Of those €2.4 billion for 2010, roughly two thirds have already been allocated by the Commission and 19 countries, namely €970 million (or roughly 64% allocated funds) for mitigation and € 561 million (or roughly 36% of the allocation) for adaptation. Of course, this is a bit off the 50:50 pledges for equal funding amounts for mitigation and adaptation as was enshrined in the Copenhagen Accord….
Clear is also – notwithstanding the talk in Copenhagen about a new “Copenhagen Green Climate Fund” – that most of the EU member states would like to keep control over their finance contribution via a traditional bilateral donor-recipient relationship, thank you very much. A small consolation might be that of the €943 million in bilateral contributions almost two thirds (or € 594 million) are supposed to be allocated to African countries. Definitely worth double-checking when the Cancun report comes out.
Only 39% of the confirmed pledge for 2010 (some €598 million) will go via multilateral channels, most prominently, albeit not surprisingly, the World Bank’s Climate Investment Funds (with €208 million), with the World Bank’s Forest Carbon Partnership Facility getting another €20 million and additional €28 million flowing into the accounts of the Inter-American Development Bank. In comparison: existing financial instruments under the UNFCCC, such as the GEF or the Adaptation Fund, will receive a bit less, with €108 million and €45 million respectively. The representative of Spain, which holds currently the EU presidency, made a big passionate plea for other developed countries to follow her country’s lead (Spain had recently given €45 million to the Adaptation Fund, see an earlier post) “to give the Adaptation Fund an opportunity”, even though, as an unproven financial mechanism, it might be “risky”. Not necessarily a ringing endorsement, I would say….
Oh, did I forget to mention that a little bit less than a third of the EU confirmed fast track funding for this year (some €407 million) will take the form of concessional soft loans? Of course, loans, even soft ones, usually are expected to be repaid, which might be hard for some developing countries (and is certainly not climate-just). At least, the EU is honest enough to include only the soft loans’ “grant equivalent” in its count of fast track finance fulfillment, not the entire loan (which would be one of these creative accounting gimmicks I had mentioned earlier). And the €150 million (€ 50 million of which this year) that the EU Commission will put over the three years into the expansion and extension of existing climate change projects in Ethiopia, Nepal, the Pacific Region and some other countries is according to the EU Commission’s chief climate negotiator Arthur Range-Metzger (SP???) “money that otherwise would not have been mobilized”, meaning fresh money in the truest sense of the word.
The same cannot be said of all EU member countries’ contribution. Astonishingly enough, there was a wide range of interpretations and definitions of the term “additionality” with regard to their respective contribution to the EU fast track finance commitment for 2010. And even more mind-boggling is that fact that the EU has so far been not even made an attempt to harmonize its member countries’ understanding of additional and new money – this by an entity which in the past has spent considerable administrative effort on creating an EU-wide harmonized standard for the ideal curvature of the bananas sold within its borders.
Thus, the Dutch define additionality as “additional to the ODA target for the Netherlands” (which is 0.8 of their GNI); while the Swedish proudly proclaim that they are spending 1 % of GNI for ODA anyway (of which their new climate fast start money is therefore a part?). The French promise they are “not counting exiting activities in our fast-start money”, but only “further support for new activities”. The Finns define it as a “net increase in climate change funding using 2009 as a basis” which is part of the country’s ODA growth. Likewise the UK points to the rising ODA budget as its source for additional fast start climate funds. And in Germany, the spending over and above the baseline for climate financing in 2009 is counted as additional money, which does come mainly from the International Climate Initiative (which gets its money from the auctioning of emissions allowances under the European Emissions Trading System). Of course, there is the possibility that some of this funds are counted twice or shifted from one ODA budget line to another, as some questioners at the side event alleged, using some concrete examples. Short of a fully transparent and detailed reporting by the EU and all its member states’, we, the public, will probably never know for sure, which won’t allow us to hold them accountable for the use of increasingly scarce public funds.
By the way: no word if the costs for the nice buffet lunch provided after the EU side event were counted as part of the EU’s fast track finance commitment for 2010. I wonder….
Photo: uggboy with Creative Commons License
Tags: climate finance, Copenhagen Accord, EU, Fast Track Finance
[...] even necessary to believe that the money will actually flow in the end (and there’s already serious doubt about it). It suffices that developing nations expect that money, or parts of it, to be [...]