Climate finance – a hot topic in Bonn


In Bonn, a city that’s starting to feel like my second home, the negotiations are in full swing.  My specialist subject, climate finance, is a hot topic here. It’s a big issue – covering where the money will be sourced from, how it is counted, and where it will flow through.  But essentially it’s one of the keys to unlocking the potential to reduce emissions in developing countries and help them adapt to the impacts of climate change.

In the first week here at the UNFCCC session, we saw intense and polarised discussions on where the money will flow through. At present there are almost 20 funds, not to mention the plethora of bi-lateral agreements between developed and developing countries that all deliver climate action.  Developing countries have huge difficulties accessing the small fragmented pockets of money available.  Under these circumstances they were asking for more coordination and oversight to ensure that all countries have equal opportunities to the money they require to help them develop in a sustainable manner.

This seems eminently sensible and fair, but not so to the US and other developed countries like Japan, who disagree on having “their” money going to countries that they don’t trust or necessarily like. So the crux of the matter is that developed countries are still treating this money like aid, and not justice.

Developed countries have a legal obligation to financially support poor nations: this legal obligation stems from the fact that for over a century, we, in the industrialised north, have pumped emissions into the atmosphere, constraining the ability of developing countries to follow our development pathway, and to top it all off, these emissions have and will wreak climatic havoc in developing countries.

Part of the solution to this problem, is for developed countries to find money which comes from ‘innovative sources’, such as penalising polluting activities and using these flows for climate action in poor countries.  The Copenhagen Accord, the political agreement cobbled together in the last 24 hours of the epic Climate Summit, contained little of worth or substance.  But it did task a high level panel to look into the alternative sources of funding to reach the $100 bn per annum by 2020, also agreed in the Accord.  Whilst $100 billion falls far short of what is needed for developing countries to play their part in limiting temperatures to well below 2 degrees, the panel was something civil society cautiously welcomed.

Out of the ashes of Copenhagen, the UN Secretary General took the bull by the horns and transformed the High Level Panel in the Accord, into a High Level Advisory Group (AGF), comprised of 20 or so individuals with political, economic and financial acumen.  But the toxic hangover of the Copenhagen Accord has tainted this prestigious group and its work.

This week in Bonn, representatives of the group came to present to the Parties how they were beginning to undertake their work, and announce a new line up.  Previously, Gordon Brown as PM of the UK had co-chaired the Group with PM Meles from Ethiopia.  Since Brown’s departure from government, David Cameron invited Chris Huhne, our new Secretary of State for Energy and Climate Change, to become a member, and the Norwegian PM Stoltenberg was fast tracked from member to co-chair.

One of the key questions the Parties and the AGF will need to face over the coming months is how to complement and not duplicate each other’s work. One way in which to give the negotiating parties a heads up would be an interim report, which would allow the negotiators to attempt to see how they could incorporate the recommendations of the group into the new negotiating text.  No such luck. The task of the group is too great to deliver such an interim report.

There is a delicate balance at stake here.  Whilst we urgently need the finance to help poor countries take climate action, the spirit of the Copenhagen Accord lives on in the AGF, and this concerns some negotiators, who question the AGF’s legitimacy.  Whilst these concerns are valid, through de-legitimising this Group, Parties may find they allow the Group space to not deliver on the task in hand.

A very real anxiety on behalf of civil society is that this group will undertake an academic analysis of different ways in which to raise the money.  This would be deeply disappointing: we need this group to look at various concrete options for how the money could be raised, and put these forward as recommendations to the UNFCCC.

We need parties here in Bonn to really raise their expectations of what this group should deliver, if we don’t remind them of how important and urgent their task is, we could run the risk of letting them deliver a long shopping list of options, which would only serve to undermine their credibility among their critics and let down the international community.

Liz Gallagher 10/06/10

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