Climate and Development Lab
Connect with the CDL on Twitter:
  • Home
  • About
    • Authors
    • Alumni
  • CDL in the News
  • Publications
    • Scholarly Articles & Chapters
    • Policy Briefings
    • Books & Special Issues
    • Submissions to the UNFCCC
  • Projects
  • Multimedia
  • Contact

Climate Finance: Time to Know Who Gives What

5/18/2016

 
Picture
By Romain Weikmans and Timmons Roberts

​
​










​As the first climate change negotiations after December’s landmark Paris Agreement  open in Bonn this week,  controversies around levels of funding for poorer countries to fight climate change may re-emerge. The absence of internationally-agreed accounting rules for climate finance makes it harder to establish whether promises are being met and which countries are doing their part.  Most debates also confound two purposes of climate finance accounting – whether it is about developed countries’ financial efforts toward developing nations or about assessing the broader question of how much financial resources are being devoted to fighting climate change. So what can be done about it?
Wealthy nations claim they have delivered on promises of ‘Fast Start Finance’, and that they are on a legitimate path to the US$ 100 billion per year goal for 2020. Fast Start Finance refers to  ‘new and additional’ financial resources approaching US$ 30 billion during 2010-2012. This promise was made by developed countries at the contentious Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC), held in Copenhagen in 2009. There, developed countries also collectively pledged to mobilise US$ 100 billion per year by 2020, with balanced allocation between adaptation and mitigation. Those financial commitments were reiterated in subsequent COP decisions, including in the Cancun Agreements (see Paragraph 98) and during the Paris Climate Conference in December 2015 – when the US$ 100 billion mobilisation goal was extended to 2025 (see Paragraph 54).

However, activists, researchers, other observers and developing countries all dispute the amounts developed countries say they have given in climate finance. Contrasting statements on the fulfilment of climate finance promises made by developed and developing countries’ representatives and by civil society observers are rendered possible by the absence of internationally-agreed accounting rules. These should also permit meaningful comparisons between developed countries’ performance with regard to the provision of climate finance, but they currently fail to do so. The COP 21 Paris decision document and this year’s negotiations provide a key opportunity to set this problem right.

For Two Purposes, One System Won’t Do

As highlighted in our recent Climate Strategies Policy Brief, the OECD’s Rio Markers methodology forms the basis of the current climate finance accounting system used by most developed countries to report to the UNFCCC. However, this methodology is not well suited for the assessment of contributing countries’ financial effort toward adaptation and mitigation in developing countries. In addition, most debates around climate finance accounting confound two purposes which are quite different.

The first approach to accounting for climate finance flows stresses the fact that the developed nations created the problem of climate change, and that they also are the ones with the resources to help developing nations avoid increasing their emissions and deal with the impacts already occurring from a destabilized climate system. In this view it is critical to prove that funding is coming from wealthy nation governments and that this funding is actually being delivered, as specified under various provisions in the UNFCCC Convention, in the Paris Agreement, and in multiple other decisions. Under this approach the implicit or explicit purpose of the climate finance accounting system is to account for developed countries’ financial effort toward developing countries.

A second and very different approach argues that it doesn’t matter much to know where the money comes from, but rather that to address climate change we need to “shift the trillions” of private and public investors to drive a green energy revolution and shift toward climate-resilient development pathways, both in poor and rich countries. In this approach the aim of the climate finance accounting system is to assess the scale of financial resources globally devoted to the fight against climate change.

These approaches vary by their aims, the parts of the Paris Agreement they align with, which flows they focus upon, whether the flows need to be public grants and concessional (i.e., low interest) loans or can also be “mobilised” private finance, whether non-concessional loans and export credits can count, how granular data needs to be, and whether self-reporting is seen as adequate. We call these approaches “meeting financial obligations” (Approach 1) and “Tracking resilient/low carbon finance” (Approach 2).

Both approaches are important for different sets of reasons. However, when it comes to designing an accounting system, the worst outcome is one that mixes the two and results in modalities that are inappropriate for the underlying purpose of each approach.

A Window of Opportunity

Little noted in the Paris Decision text is a call for the elaboration under the UNFCCC of “modalities for the accounting of financial resources provided and mobilised through public interventions” (see Paragraph 57). Such modalities will be “considered” in December 2018 and could lead to the adoption of a recommendation by the COP. Such a decision is long overdue and should be celebrated. However, in agreeing to postpone to 2018 the formal consideration of such a framework, negotiators implicitly accepted that we will continue to live in what we have described as a “Wild West” of climate finance for the next three years, at least.

In their efforts to develop accounting modalities for the 2018 deadline (see box 1 for a proposed timeline), we call on UNFCCC negotiators to acknowledge the fundamentally different features of the accounting system associated with each approach described, and to develop climate finance information systems that are truly fit for purpose.

Box 1. Proposed timeline for the development of modalities by 2018

§  May 2016: Agreement of work programme for developing modalities for accounting climate finance
§  Nov 2016: Details of work programme and update from SBSTA to the COP
§  Jan-Feb 2017: Parties submissions due for proposed language
§  May 2017: COP combines submissions into zero order draft text
§  Nov 2017: Draft text developed
§  May 2018: Draft text debated
§  Nov 2018: Draft modalities proposed to Parties: agreement on a recommendation to the CMA
§  CMA 1: Consideration and adoption of the recommendation by the CMA

Source: Fit for Purpose: Negotiating the New Climate Finance Accounting Systems.

Romain Weikmans is Postdoctoral Research Fellow at the Climate and Development Lab, Brown University and Fellow of the Belgian American Educational Foundation.
Timmons Roberts is Ittleson Professor of Environmental Studies and Sociology at Brown University, USA and a Climate Strategies member.


Originally published by Climate Strategies.

Comments are closed.
    Tweets by @ClimateDevLab
    CDL in the News

    28 Dec 2018 - Edwards in the NYT on electric vehicles in Latin America

    24 Dec 2018 - The Public's Radio RI interviews Roberts on how the fossil fuel industry outspends environmental groups on campaign contributions & lobbying

    19 Dec 2018 - EcoRI News: New Report Claims RI Climate Council Falling Behind Targets

    17 Dec 2018 - 'We must move beyond business as usual,' says new report on Rhode Island's inadequate climate plan.

    12 Dec 2018 - 
    Isabel Cavelier, Guy Edwards and Lina Puerto “COP25 en 2019: reto y oportunidad para elevar la ambición climática en América Latina” El Espectador

    4 Dec 2018 - Whitehouse, Ciciline meet with climate lab

    28 Nov 2018 - Edwards quoted in New York Times story on Brazil backing out of hosting UN summit on climate change

    11 Oct 2018 - Brookings Institute Climate reality requires starting at home: Weaning from fossil fuels

    23 Sep 2018 - Edwards quoted in Financial Times on Argentina energy future

    13 Jul 2018 - Europe and Latin America can blaze a trail on implementing the Paris Agreement
    ​
    1 Jun 2018 - Brookings Institute One year since Trump's withdrawal from the Paris climate agreement

    21 May 2018 - Edwards article in World Politics Review: Is the G-20 Heading for a Showdown With Trump on Climate Change?

    11 May 2018 - Edwards Op-Ed in Washington Post 

    22 Jan 2018 - Roberts Op-Ed The climate solution no-one in Davos will be talking about

    ​15 Dec 2017 - Edwards' article on how Regional and domestic politics could sabotage Brazil's bid to host UN climate change talks in 2019 ​
    ​
    8 Nov 2017 - Roberts quoted in Reuters story on financing loss and damage

    9 Oct 2017 - EcoRI article describes Roberts' testimony against the natural gas power plant proposed for construction in Burrillville, Rhode Island

    17 Sep 2017 - BBC Radio 5 featured a live interview with Roberts about Trump's conditions for staying in Paris

    4 Sep 2017 - Roberts comments on the use of his work in a report by Rhode Island Department of Health on the proposed power plant in Burrillville, Rhode Island 

    17 Jul 2017 - Roberts mentioned in NPR's story on the US having a say in UN climate spending
    ​
    15 Jul 2017 - Roberts calls for solid climate policies in RI

    5 Jul 2017 - Roberts demands swifter action on CO2 release

    5 Jul 2017 - Roberts demands RI Governor Raimondo to take climate action

    30 Jun 2017 - Roberts gives advice on owning and using electric cars

    23 Jun 2017 - Roberts comments on how voters are persuaded by the terms 'climate change' and 'global warming'

    20 Jun 2017 - Roberts' involvement in local climate group is helping to fight fossil fuel development

    3 Jun 2017 - WPRO Radio's Steve Klamkin interviews Roberts on the Paris Agreement

    2 Jun 2017 - Roberts comments on US involvement in the Green Climate Fund

    2 Jun 2017 - BBC Radio 5's Faye Rusco interviews Roberts on Trump's withdrawal from Paris

    2 Jun 2017 - Roberts discusses the role of mayors and private sector companies post US pull-out of Paris

    1 Jun 2017 - Roberts gives more details about the US withdrawal from the Paris Agreement

    1 Jun 2017 - Roberts organizes emergency protest in RI

    1 Jun 2017 - Roberts comments on the implications of US withdrawal from the Paris Agreement

    1 Jun 20117 - Roberts share his views on the US exit from the Paris Accord

    31 May 2017 - Roberts cited on the far-reaching implications of US withdrawal from the Paris Agreement

    31 May 2017 - RI left vulnerable if US pulls out of Paris Accord, says Roberts

    24 May 2017 - Roberts chimes in on Trump's proposed EPA budget

    30 Apr 2017 - Roberts helps to 'fact check' Trump's first 100 days in office

    25 Apr 2017 - Roberts lobbies for people's march in RI to mark Trump's first 100 days in office

    23 Apr 2017 - Roberts cautions against threats to science at march for science in Rhode Island

    7 Apr 2017 - White House Chronicle's Llewelyn King interviews Roberts on Trump’s executive order and climate policy directions

    10 Mar 2017 - Roberts quoted in Providence Business News about new proposed fossil fuel infrastructure in Rhode Island

    6 Feb 2017 - Devex article on climate finance under the new administration quotes Roberts

    18 Jan 2017 - Roberts featured in NPR Marketplace segment on Obama's $500m donation to the Green Climate Fund

    29 Dec 2016 - Roberts quoted in Common Dreams article about the state of environmental justice in 2016

    19 Nov 2016 - EcoRI profiles Roberts and the new Civic Alliance for a Cooler Rhode Island

    14 Nov 2016 - Roberts featured in Rhode Island Public Radio segment on Trump and the Paris Agreement 

    12 Nov 2016 - Roberts quoted in Climate Home article on Republican plans to defund climate change programs

    10 Nov 2016 - Roberts quote appears in EcoRI article about Trump and the environment 

    9 Nov 2016 - Roberts quoted in InsideClimate News article on COP22 reaction to Trump's election

    9 Nov 2016 - Science Daily discusses new CDL article on paying for loss and damage

    9 Nov 2016 - Roberts quoted in Climate Home article on COP22 reaction to Trump's election

    8 Nov 2016 - Roberts' paper on paying for loss and damage discussed and quoted in Phys.Org

    7 Nov 2016 - Roberts' paper on paying for loss and damage discussed and quoted in Futurity article

    21 Sep 2016 - Roberts quoted in a Breitbart News article about Clinton's support following shift in climate change language

    20 Sep 2016 - Roberts quoted in a Climate Home article on Clinton's language around climate change after Sanders' endorsement

    5 May 2016 – Climate Home quotes Edwards on the announcement that Patricia Espinosa will lead the UNFCCC from this July 

    5 May 2016 - Dialogo Chino quotes Edwards following announcement that Patricia Espinosa will replace Christiana Figueres as head of the UNFCCC

    24 Apr 2016 - Deutsche Welle quotes Edwards on how ratifying Paris Agreement can boost prosperity in Latin America

    23 Mar 2016 – Edwards provides extended quote to Dialogo Chino on Obama’s trip to Cuba and Argentina
     
    25 Dec 2015 -  ConexiónCOP conversó con Guy Edwards sobre el nuevo acuerdo climático y America Latina

    14 Dec 2015 - Rhode Island Public Radio quotes Roberts on how Paris Climate Pact should steer New England toward clean energy

    11 Dec 2015 - Associated Press quotes Romain Weikmans on “Wild West” account on climate finance

    10 Dec 2015 -  Climate Home talks to Roberts about the lack of an independent system on climate finance

    Read more...

    Archives

    December 2021
    November 2021
    October 2021
    June 2021
    January 2021
    December 2019
    December 2018
    October 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    October 2017
    August 2017
    April 2017
    March 2017
    February 2017
    December 2016
    November 2016
    October 2016
    September 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    April 2012
    December 2011
    February 2009
    December 2008

    Authors

    The pieces featured in the blog are authored by CDL members and a diverse group of partners from around the world. The opinions expressed in these articles are the sole responsibility of the authors and do not reflect those of Brown University. 

    Categories

    All
    Civil Society
    Climate Finance
    Conference
    COP17
    COP19
    COP20
    COP21
    Energy
    Equity
    Latin America
    LDCs
    Legislation
    Loss And Damage
    Mitigation
    Policy Brief
    Publications
    Rhode Island
    Small Island Developing States
    UNFCCC
    United States

    RSS Feed

Proudly powered by Weebly