Were those pledges completely cynical manipulation? Nearly all observers—and none more than the developing nations they are supposed to help—hope not. But the only way to know is by observing the action of the pledging nations: are they holding up their end of the deal? Unfortunately, by failing to define what would count as climate finance and who would count it, negotiators opened the door to numerous contrasting statements regarding the fulfillment of these promises.
In the absence of clear language in United Nations Framework Convention on Climate Change (UNFCCC) decisions on key issues related to climate finance, contributor countries have been able to decide in a vacuum what they would count as part of their commitments. For example, developed countries’ financial pledges were stated without a baseline or reference year. This is like the European Union or the United States committing to reduce its emissions by 30 percent by 2020, without indicating if this percentage was below 1990 or 2005 levels. That is, a pledge is meaningless without such clarifications.
More fundamentally, the question of what counts as “climate finance” is itself still not internationally agreed-upon. The consequence of this is that contributing countries have adopted a variety of accounting and reporting practices, making it impossible to assess the achievement of their pledges.
Now, less than three months before world leaders gather in Paris to reach an international climate agreement, some developed countries have come forward with a statement that they need to provide “increased transparency” on their progress towards the $100 billion goal. In their joint statement issued on September 6, those countries admit that the current data is inadequate.
This is long overdue and certainly most welcome. However the statement is troubling in at least two respects.
First, these developed countries stated that they have reached “a common understanding of the scope of mobilized climate finance” and that they have elaborated a “common methodology for tracking and reporting” toward the $100 billion goal. Such a move is concerning because it excludes beneficiaries from having their say in what should count as climate finance, how it should be counted, and who counts it. This is a fairly stunning omission of meaningful participation by recipient countries.
No wonder issues related to whether climate finance is truly “new and additional” or merely “rebadged” (relabeled) aid activities are not even cited in the joint statement. What is desperately needed is a robust MRV (measurement, reporting, verification) system designed under the UNFCCC to say what counts for climate finance flows. While cumbersome, the UNFCCC process allows all parties to “buy in” to the processes, and building a robust “MRV of Finance” requires broad participation.
Second, the ministerial was silent on a clear plan on how the developed countries would meet the goals set out back in Copenhagen. There is no way to tell if the increase in climate finance that developed countries will celebrate in the coming weeks was mainly driven bymethodological developments in accounting (for example the increased coverage of data about non-concessional flows targeting climate objectives) rather than real advances in financial effort. In this regard, accounting for the range of North-South private flows mobilized to fight climate change—the main focus of the joint statement—is a Pandora’s box that developed countries are just starting to open. If developed parties are not conservative in their methodological choices, they would undoubtedly be able to show that they have already met the $100 billion goal or that they are not far from it. What credibility will they then be able to maintain?
Needless to say, improvements in data collection and measurement methods are essential to deepen our understanding of international financial flows that are relevant for mitigation and adaptation. This statement endorses valuable work led by the multilateral development banks to improve project categorization. But those improvements themselves will not help much in reinforcing trust between parties to the climate negotiations if their only purpose is to show that developed countries have already done their part. They must be used to establish more transparent commitments in the future.
Accountability and transparency are the only way for the world to know that OECD countries are holding up their end of the deal, to know that the pledges made in Copenhagen were not simply cynical manipulation. On the road to Paris, OECD countries need to remember that they approved a set of recommendations on good pledging practiceback in 2011. The OECD declared that they needed to specify all parameters, be comparable in their terms, dates and baselines, realistic in their periods and amounts, have monitoring and measurement responsibilities assigned, and donors should provide sufficient information “to allow beneficiaries and third parties to track performance.”
It would be very wise of them to follow with this approved set of recommendations in December this year when they advance a new financial package for the years to come.