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Climate finance falling short for adaptation - research

Source: Thomson Reuters Foundation - Mon, 26 Nov 2012 10:29 GMT
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LONDON (AlertNet) - As a first three-year round of aid to tackle climate change draws to a close, researchers and campaigners say far too little has gone to help poor countries adapt to more extreme weather and rising seas, and there is a worrying lack of commitments from wealthy countries for the coming years.

At the U.N. climate conference in Copenhagen in 2009, rich governments said they would provide close to $30 billion from 2010 through 2012 to help vulnerable countries cope with climate impacts, and to develop in a cleaner way, including using more renewable energy.

This "fast start" finance was supposed to be "new and additional" money, allocated in a "balanced" way between climate change mitigation and adaptation activities.

But as the fast start period ends, analysis shows that large chunks of that money were either already announced before Copenhagen or drawn from development assistance. Only about a fifth has been allocated to adaptation, and more than half has been offered in the form of loans.

The amounts donors say they have pledged add up to nearly $34 billion, which includes $3 billion in leveraged private finance from Japan, according to a new review from the World Resources Institute (WRI). But only $28 billion of that has been budgeted or requested, and the exact definition of what can count toward fast start finance remains unclear, it added.

“This leaves room for doubt as to whether these targets are indeed being met,” said Clifford Polycarp, a senior associate at WRI.

And rich nations have yet to say how much they plan to keep on giving after the end of this year.

In Copenhagen, those nations promised to mobilise $100 billion a year in public and private finance by 2020. But there has been no concrete guidance on how that will be raised or what will happen in the interim.

"Developing countries are heading towards a climate 'fiscal cliff' without any certainty about how they will be supported to adapt to climate change after 2012 draws to a close," said Tim Gore, climate change policy advisor for Oxfam International.

"There is a real danger that climate finance will be scaled down in 2013, at a time when it needs to be scaled-up," he added in a statement.

According to a briefing released by the charity on Sunday, Canada plans no new climate finance, while contributions from southern and eastern European countries are "almost certain" to fall. New Zealand, the Czech Republic and the Netherlands have indicated they will maintain their climate aid at current levels, while the United States is expected "at best" to do the same.

The European Commission could increase its allocation, but such a hike would be vulnerable to efforts by European Union member states to scale back the EU budget, the briefing says.

"Should there be any decline in contributions from Japan and other major providers of 'fast start finance', these are unlikely to be offset by increases elsewhere," it concludes.

Major donors, including the European Union, have taken a cautious line in recent weeks, saying only that they will carry on giving climate aid. At the same time, they insist they have met their fast start promises, at least in terms of headline amounts.

On Friday, the European Commission said at Doha the EU will show it is on track to deliver its commitment of 7.2 billion euros. It will also “discuss with its developing country partners how major flows of EU climate finance can continue in 2013-2014”, and “provide reassurance” it will contribute its fair share of the $100 billion goal for 2020, it added.

Washington said in a recent overview it too had fulfilled its fast start promise of $7.5 billion, including $2.3 billion in the 2012 fiscal year. That total consists of more than $4.7 billion of assistance approved by Congress and more than $2.7 billion from U.S. development finance and export credit agencies, it added.


The Oxfam briefing calculates, however, that only a third of the fast start money was new, and only a quarter came on top of a longstanding promise by rich nations to provide 0.7 per cent of their gross national income in aid.

Just 43 percent was in the form of grants, and only 21 percent went to climate adaptation efforts, such as helping poor farmers obtain drought-tolerant seeds, install small-scale irrigation systems or access reliable weather and climatic forecasts, it says.    

This chimes with work by researchers at Brown University in the United States. In a paper released on Monday by the International Institute for Environment and Development (IIED), they also found that only 20 to 22 percent of the fast start money went to adaptation, around $1.5 billion per year.

This, they say, is "a far cry from the 50 percent required to achieve true 'balance'", and is a fraction of the tens of billions of dollars U.N. agencies estimate will be needed annually to help developing countries adapt to climate impacts in the coming years.

The Brown experts calculate that only 2 percent of fast start finance has been channelled through U.N. funds set up to enable the poorest nations to implement national adaptation plans. These need funding to the tune of around $3 billion, yet the Least Developed Countries Fund, the main vehicle for supporting them, has pledges of just over half a billion dollars.

Brown University researcher David Ciplet described this as "reprehensible", and said rich nations could build trust at the Doha climate conference, which starts on Monday, by agreeing to put in more money.

"A lot of effort has gone into creating those funds and national adaptation plans, but they are little more than empty shells. We would like to see that change," he told AlertNet.

Both Ciplet and Oxfam's Gore warned that the fledgling U.N. Green Climate Fund (GCF) could suffer a similar fate, unless donors start making pledges soon to fill its virtually empty coffers.


They also highlighted the uncertainty and unpredictability of the fast start aid, and argued for a common reporting system that would make climate finance more transparent.

At the 2010 U.N. climate conference in Cancun, countries agreed to set up a committee to improve coherence and coordination of climate finance, and oversee how it is reported. But the Brown researchers say transparency remains weak.

They scored fast start reports submitted in May by nine donors on 24 transparency indicators. Switzerland came top with 67 percent, followed by Liechtenstein and Australia. The United States ranked last.

"Without transparency about how and when rich countries will meet their climate finance pledges, developing countries are left unable to plan to adequately address and respond to climate change," co-author Timmons Roberts said in a statement.

The IIED briefing also examines whether rich nations have contributed their "fair share" of fast start finance, based on their ability to pay and their greenhouse gas emissions since 1960. Only two - Norway and Japan - are judged to have given enough, with New Zealand and Canada coming close, and the rest falling short.

Ciplet urged donors to rectify this at Doha.

"We hear that, because of the economic crisis, the terms have changed or that it's hard for wealthy countries to step up with more (climate finance), yet we see them continuing to give huge subsidies for fossil fuels. It's a question of what priorities we are making and how we use the money we have," he said.

Oxfam also called on officials and ministers due at the Doha talks to make progress on harnessing innovative sources of public finance, including charges on emissions from international aviation and shipping.

"If developed countries fail to agree a clear trajectory of financing to 2020, and if they fail to mobilise new innovative sources of finance in addition to their national budgets, developing countries will have little confidence that promises made in Copenhagen and reaffirmed in Cancun will be kept," the charity’s report warned. "Without this confidence, the prospects of finalising a comprehensive climate deal in 2015 are greatly diminished."



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