EU finance ministers pledged yesterday (8 November) to add €7.2 billion in short term funds to help poor countries deal with the effects of climate change.
“Despite the severe economic downturn and strong fiscal constraints in Europe, we have mobilised €2.34 bn also in 2011,” said the EU's Climate Action Commissioner Connie Hedegaard.
“This figure shows Europe's clear commitment to support actions for reducing emissions and adapting to climate change in developing countries. And after the first year of funding, it's very encouraging to see tangible results in a number of developing countries.”
The €2.34bn of fast start finance will be added to the €2.34bn already mobilised in 2010 towards meeting the EU’s €7.2bn commitment to a $30bn (€21.6bn) fund, made at the 2009 climate change summit in Copenhagen.
But NGOs claim that much of the money promised in the conclusions of the finance minister's meeting yesterday has been repackaged from previous aid commitments.
“The large majority of this money is not new,” Lies Craysnest, Oxfam’s climate change policy advisor told EURACTIV.
“Our findings suggest that [a sum of] only between €870m and €1.4bn of the €7.2bn is likely to be new. This means that quite a lot of the actual financing pledge will come from existing aid budgets,” Craysnest added.
Green Climate Fund
The money is intended to eventually form part of a $100 bn (€72.2bn) a year Green Climate Fund, “an enormous amount of money,” as one negotiator at Copenhagen put it.
“The infrastructure has to be put in place to manage that kind of money, the process has to be put in place, but first of all people have to see where the money is coming from,” he told EURACTIV.
Developing world nations argue that the sourcing of any Green Climate Fund should comes mostly from the public sector.
“The private sector won’t deliver what’s needed for the poorest and most vulnerable countries, particularly for adaptation activities where there are no profit-making incentives,” Craysnest said.
“Relying on the private sector to finance adaptation is a very dangerous strategy and the poorest will suffer as a result,” she added.
Oxfam, in common with EU countries such as France and Germany, instead proposes carbon levies on shipping, or a Financial Transaction tax that could raise climate funds and reduce CO2 emissions at the same time.
“A Financial Transactions Tax and carbon levy on shipping would be fundamentally useful,” Stephan Singer the head of the World Wildlife Fund’s climate and energy team told EURACTIV.
“These could provide substantive amounts of money with a very low surcharge, and are easier to regulate financially for adaptation and climate mitigation.”
The underlying ‘climate justice’ argument used by developing nations is that it is unfair to expect them to compete with an industrialised world which burned fossil fuels for 100 years, while making comparable CO2 cuts.
A technical analysis provided for the BASIC countries (Brasil, South Africa, India and China) proposed that the developing world be allowed to continue emitting carbon while developed countries become "net absorbers" of the substance.
Moreover, research in a recent report by the Climate Policy Initiative suggests that at least $97bn per year is already being provided “to support low carbon, climate-resilient development activities”.
Much of it predates the commitments that were made at the Copenhagen summit, although limited amounts come from developing countries themselves, the report says.
As such, the issue of defining whether existing funds pledges are really ‘new’ or ‘additional’, as the CPI report indicates, may take centre stage at Durban, and within the EU.
“One of the biggest problems at the EU level is that there’s no common baseline for countries and they’re delivering differing climate finance in different countries,” Craysnest said.
“The Commission itself researches definitions of "additionality" between different member states and it was clear that that there are 27 definitions,” she added.