EU finance ministers must be prepared to give concrete assurances that climate finance will not fall off a cliff in December, but will continue to be provided to support climate action in developing countries, argue Satu Hassi and Wendel Trio.
Satu Hassi is a member of the European Parliament for the Green Group and Wendel Trio is director of Climate Action Network Europe in Brussels.
EU finance ministers today (13 November) will hammer out details for how to keep the EU’s commitment to providing climate finance to developing countries, in preparation for the next UN climate summit starting in Doha in a few weeks.
A pathway forward must be found soon, as the “Fast-Start Finance” (FSF) period, established at the UN conference in Copenhagen for the period 2010 to 2012, runs out at the end of this year.
EU finance ministers must be prepared to give concrete assurances that climate finance will not fall off a cliff in December, but will continue to be provided to support climate action in developing countries.
Right now there is no roadmap for how the EU plans to meet its share of the $100 billion annually by 2020 already promised to developing countries, nor is there any money in the UN’s Green Climate Fund. A lack of clarity on finance beyond 2012 could spell disaster for vulnerable countries already struggling to cope with the effects of a changing climate.
In particular, the EU should be considering the needs of the vulnerable countries with which it formed a newfound and successful coalition in Durban: the Alliance of Small Island States (AOSIS) and Least Developed Countries (LDCs).
If not backed up by a solid European climate finance package beyond 2012, the EU may find it hard to negotiate with its new allies in Doha.
At a minimum, over the coming three years we need to see developed countries committing to at least double what has gone into fast start finance, as well as a political commitment to fill the empty Green Climate Fund (GCF) with $10-15 billion over the same period. Based on historic responsibilities, the EU should deliver about one third of this commitment.
Troubled economic times are no excuse to renege on commitments, as there are many possibilities to catalyse innovative sources of public finance. Finance ministers should agree that half of all the revenues from the auctioning of emission allowances under the EU ETS are used to support climate action in developing countries.
In particular, committing revenues from aviation in the ETS to go to the GCF could both help the EU fulfil its climate finance commitments and potentially reduce opposition to the scheme from outside countries. This Ecofin meeting is the right time to make this decision.
Some innovative sources of finance, such as taxes on shipping and aviation fuel and a EU-wide financial transaction tax, have already been identified and plans to use them are ostensibly moving forward.
Finance ministers should now ensure that any funds generated from such innovative sources go towards development and climate finance. Ministers must also give clarity on the potential of private sources of finance, including which types of sources would be used and for what purposes.
A good step forward was recently taken as South Korea was chosen as the seat of the GCF, putting an end to the ongoing debate over which country would host the Fund. Now developed countries can instead put their efforts and energy into delivering the $100 billion annually that has been promised for desperately needed climate funding in developing countries.
We hope that finance ministers will consider these issues.