By Brandon Wu
If the conversation on equity and overall tone of discussions at last week’s UN climate change talks in Bonn was a pleasant surprise, other aspects of the negotiations remained uninspiring.
It’s clear that unless developed countries make concrete commitments to meet their ethical and legal obligations to provide climate finance, progress in these talks will be difficult at best.
Finance is required to help developing countries adapt to current and future climate impacts and transition to low-emissions development pathways.
Yet finance was barely discussed in any meaningful way in Bonn – as one commentator put it, it was “the elephant that’s not even in the room.”
After the Fast Start Finance period ended in 2012, no further collective climate finance commitments have been made.
It’s completely unclear how developed countries will scale up to meet their goal of $100 billion per year by 2020, and in fact it appears quite possible that climate finance totals may actually decrease from Fast Start Finance levels – $10bn annually – in the next few years.
This lack of finance would be particularly devastating for vulnerable communities in developing countries, which have the least capacity to cope with increasingly severe climate impacts – impacts that are happening now, not waiting until 2020.
The structure of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) negotiating track is such that climate finance for immediate adaptation needs is orphaned out of the process: ADP Workstream 1 focuses on the 2015 agreement that will create a new climate regime starting in 2020, and Workstream 2 focuses on pre-2020 mitigation.
This might be less of a problem if concrete commitments for short-term finance were made at COP18 in Doha – but instead, Doha saw a conspicuous lack of such commitments despite the ending of the Fast Start Finance period.
As a result, developing countries are left with the likelihood that badly needed adaptation and mitigation programs will remain unfunded, and there is no predictability in finance that might enable these countries to create well-planned responses to the challenges posed by climate change.
There are some conversations about climate finance happening in venues outside the formal UNFCCC negotiating tracks, but unfortunately these have largely focused on how public funds might be used to leverage private investment that could then be counted towards developed countries’ obligations.
Civil society groups, including ActionAid, believe the full $100 billion should be public money provided on a grant basis, in line with “polluter pays” principles – and this is particularly important for adaptation needs, which are unlikely to be attractive to private investment seeking short-term profits.
Civil society groups, multilateral institutions and various government agencies have come up with all sorts of ideas to generate large sums of public funds for climate finance, including financial transactions taxes, redirection of fossil fuel subsidies, closure of corporate tax loopholes, levies on emissions from the international shipping and aviation sectors, use of IMF Special Drawing Rights, and more.
The political focus on private finance should be redirected towards implementing some of these “innovative sources” of public money, which could serve the needs of the most vulnerable in a way that private investment could not.
Time to commit
Next month in Bonn and at COP19 in Warsaw this November, there are at least two steps developed countries could take to build trust and good will in the negotiating process and begin addressing climate change in the immediate short-term.
These countries should productively engage in the equity conversation, as they did last week in Bonn, and agree to an effort-sharing arrangement that acknowledges core principles of fairness including historical responsibility.
In the short term, they should also put their money where their mouth is, backing up the pledges they have made on climate finance, which is desperately needed for urgent adaptation needs, with actual commitments of public finance.
We should always keep in mind that if we fail to respond to climate change in time, with deep emissions reductions and adequate, predictable climate finance, permanent climate-induced loss and damage will increase to unimaginable proportions.
Without urgent action – which developed countries have the responsibility and capacity to lead – we will not be able to avoid irreversible loss of life, land, biodiversity and even, in the words of one presenter at a workshop last week, “a breakdown of national and international order.”
In the midst of complex negotiating processes like the UNFCCC, the stark reality of the scale of what is needed to fix the climate crisis is something we can’t afford to forget.
Brandon Wu is a Senior Policy Analyst at ActionAid, specializing in Climate Finance. Follow him on Twitter @Brandoncwu