Just a few days ago, the European Investment Bank (EIB), the financing arm of the EU and its 27 member countries, formally joined the ranks of other multilateral development banks and the World Bank in creating its own climate change fund — thus contributing to the proliferation of new climate funds, supporting the claim of other development organizations to be best equipped to manage large climate financing sums and thereby further undermining a future leadership role of the UNFCCC and its financing mechanisms in the emerging global climate finance architecture.
The new Interact Climate Change Fund, ICCF was established in cooperation with the French development agency (AFD) as well as a group of 15 bilateral European development groups organized in the Association of European Development Finance Institutions (EDFI). Focus of the new Fund, whose finance volume was not publicly disclosed, are private sector investments in climate change projects in Africa, the Caribbean and the Pacific, Asia and Africa, all to be undertaken in the course of this year, which the ICCF aims to support by matching investment amounts. The Fund will act as “catalytic lead investor” in renewable energy and clean technology projects to extend energy access and provide energy stability in developing and emerging market economies.
Many hopes around the globe are directed at the work of the UN High-Level Advisory Group on Climate Change Financing, which has been working now for a couple of weeks on finding innovative ways to raise the US$ 100 billion per year by 2020 that the Copenhagen Accord had promised long-term for fighting climate change. God knows, we need urgent actions on adaptation and mitigation, especially in the poorest countries, and the financial commitments and North-South transfers to pay for them.
But for me personally, the 19-member expert panel and its process have already become a big disappointment — even before they present any preliminary findings, as they are scheduled to do in a few weeks time at the climate talks in Bonn.
Two main shortcomings are the cause for my dashed hopes: The composition of the 19 member panel is all-male — as if women (at last count still slightly more than 50 percent of the human population) weren’t affected by climate change and thus shouldn’t have views on how to finance actions to combat it. And the work of the panel is non-transparent, non-participatory and — at least so far — unaccountable.
Slender on gender AND on transparency — a double-whammy (by the way, obvioulsy related) that for me cuts to the heart of whether anything this group will come up with by Cancun has legitimacy and moral standing.
Last week the so-called Petersberg Climate Dialogue ended after two days of meetings, hosted by Germany and Mexico, which had brought environment ministers and representatives of 43 countries to Bonn, Germany. Amid a lot of mutual reassurances on the need for strengthening the UNFCCC, the promise of a new momentum in international climate talks as well as urgent calls for a higher level on ambition in emissions reductions, the critical issue of climate change financing received some attention, albeit little new cash.
No, no, this was not a financial coming-out party of the countries present, during which check books were graciously pulled out of the pockets and large checks for adaptation and mitigation efforts written. Financially, Petersburg provided only peanuts, even if Germany as host felt compelled to promise a small contribution of EUR 10 million to the Adaptation Fund.
Budget cuts are painful, no doubt about it. In times of empty coffers and growing deficits some really hard choices have to be made. Too bad that one of the first cuts in Germany’s ongoing budget negotiations under the conservative-liberal coalition government has been to the credibility of Germany as a leading nation in international climate policy.
Just three months ago at the COP 15 in Copenhagen, German “climate chancellor” Angela Merkel and her G8 chums had promised developing countries who felt wounded by the minimalist Copenhagen Accord instead of the hoped-for comprehensive post-Kyoto Agreement a financial band-aid in form of quick and non-bureaucratic fast-track climate financing of an additional US$ 30 billion (approximately € 23 billion) over the next three years. The EU’s share was supposed to be € 7.2 billion, of which some € 1.26 billion (or € 420 million per year 2010 to 2012) were to be paid by the Merkel government.
‘Additionality’ to existing development aid is the key criterion here, and thus the litmus test for the credibility of international climate finance pledges, as a new Post-Copenhagen analysis by hbf and ODI emphasizes. Germany had promised that its contributions to the short-term finance pledges given in Copenhagen would be additional to existing ODA.
It is ironic, really.
The question about financial transfers from the industrialized to the developing countries – one of the most contentious issues throughout the two weeks’ negotiations in the Bella Center – might be one issue area, where a final Copenhagen declaration could show a clear way forward – albeit in an otherwise weak and watered down political statement by Head of States, a sad remnant of the earlier, grander vision of a comprehensive “Copenhagen Deal”.
Finally, concrete numbers – the most to be expected for a future “Copenhagen Climate Fund” – are on the table. And while they are not as grandios as hoped for, they will, if collected and tranferred speedily, go a long way to improve the lives and livelihoods of men and women in the devleoping world as well as the world’s climate. Over the next three years, industrialized countries commit to transfer some $30 billion in short-term financing to developing countries. Most of these funds over the next three years would probably be delivered through existing (climate) financing mechanisms, including at the multilateral development banks and the GEF. (A reminder: It took seven years from COP decision to the start of operations of the new Adapation Fund). By 2020, a “Copenhagen Climate Fund” under the direct authority of the UNFCCC would then collect some $100 billion per year by 2020.
This at least, is what a three-page outline document for a political declaration, the result of a “green room”-type meeting of 30 countries came up with after a long night of negotiations early Friday morning. But it seems also the outline of what is politically possible as a financing framework, with its baselines seemingly holding throughout the high-level segment of the negotiations and the statements by Obama, Merkel, Lula & Co. (more…)