EU mulls climate billions for developing countries

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A draft report, discussed by EU environment ministers at an informal meeting on Saturday (25 July), calls for the immediate mobilisation of $1-2 billion to fund climate adaption in low-income, vulnerable countries.

The EU hopes that the release of the money between now and 2012 will be seen as a trust-building measure by developing countries in order to seal the deal on a new international climate treaty in Copenhagen in December.

The draft document is a joint effort by the European Commission and the Swedish EU Presidency. It was originally supposed to be published before last week's meeting of environment ministers, but was delayed and will instead be finalised in the coming weeks.

The presidency report comes in response to the Swedish Commission on Climate Change and Development, which reported its findings in May.

In addition to earmarking short-term funds, the draft report urges OECD countries to fulfil an existing commitment to provide 0.7% of gross national income as official development aid (ODA). Such an increase from the current 0.3% would effectively raise the yearly funding to poor countries from $180 to $280 billion by 2015, it notes.

The report suggests that adaptation would be funded by ODA in the short term, and draw from a mixture of development aid and additional sources in the longer term.

NGOs were quick to point out that industrialised countries had already committed to reaching the 0.7% in order to reach the Millennium Development Targets for poverty reduction. But the EU was now effectively suggesting that the funds would need to be stretched in order to meet climate goals at the same time, they claimed.

Oxfam International's climate change policy advisor Tim Gore argued that climate funding should come on top of existing overseas aid commitments, rather than from the existing $180 billion of ODA flows.

Air behind the numbers

The debate around additionality of climate funding is only just taking off in the EU and will likely spark controversy both between countries and within governments. In Germany, for example, an internal power struggle appears to be taking place over the governance of future climate funds, which the development ministry would like to control under its own budget. 

Last month, British Prime Minister Gordon Brown proposed a $100 billion annual climate fund by 2020, capping the share of development aid at 10% of this total (EurActiv 29/06/09). The Netherlands and Denmark are supporting the idea that climate funding should come on top of the 0.7%, while many other governments are still debating their position.

Moreover, draft papers indicate that the Commission is preparing to take on the problem of double-counting offset credits earned from financing emissions cuts in developing countries. Environmentalists point out that as these count towards developed country targets, they should not count towards financing reductions that must take place in developing countries too.

"Those are the two areas where scrutiny is going to be necessary to check that the numbers which are coming out in the debate are really what they claim to be," Oxfam's Gore emphasised.

Positions: 

Sweden's Environment Minister Andreas Carlgren said the EU would work to bridge the gap between science and the offers on the table. "EU countries will use all our contacts in order to work together to increase the possibilities of reaching an ambitious climate change agreement with sufficient global emissions reductions and financing. We need clear reductions in emissions, both from industrialised countries and rapidly growing economies," he said.

Environment Commissioner Stavros Dimas said: "There is a significant short-term need to help developing countries with strategies for development with reduced emissions, and measures for adaptation to a changing climate."

Timeline: 
  • 10-14 Aug.: UN Framework Convention on Climate Change (UNFCCC) meeting in Bonn. 
  • 28 Sept.-9 Oct.: UNFCCC summit in Bangkok.
  • 20 Oct.: Economic and Financial Affairs Council.
  • 21 Oct.: Environment Council.
  • 2-6 Nov.: UNFCCC meeting.
  • 10-11 Dec.: European Council.
  • 7-18 Dec.: UN climate change conference in Copenhagen.
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