Climate Finance will be key to new global agreement by 2015

Climate Finance will be key to new global agreement by 2015

In the first introductory blog, Managing Director, Noel Casserly, reflects on the challenges ahead to agree a new global climate agreement by the end of next year and how progress on the issue of Climate Finance will be one of the essential building blocks.

In a little over 18 months representatives of more than 195 countries will meet in Paris to finalise a new global agreement on climate change under the UN system. The objectives are to reduce carbon emissions  dramatically and prepare for the unavoidable consequences of climate change. The new agreement is to be implemented from 2020. Major longstanding differences on how to tackle the problem remain obstacles between the countries who are parties to the UN Convention on Climate Change:

  • How to address the share of responsibilities between  developed and developing countries  and whether the legal requirements should continue to be referenced to the original 1992 UN Climate Change Convention.  This the approach is favoured by China, India, Philippines, Saudi Arabia and others but opposed by US, Russia and others as it would rigidly differentiate the legal obligations of rapidly emerging and industrialised economies for the future;groupings that may have made sense in 1992 but are clearly not rational or workable in the post‐2020 period.
  •  A critical issue is the level of ambition. At the UN climate conference in Cancun, Mexico, in 2010 countries agreed to a long-term global goal to reduce greenhouse gas emissions to a level which limited global average warming to below 2C above pre-industrial levels.  Developing countries, particularly those most vulnerable to the impacts of climate change fear that there may be some back-tracking on this.  In the latest round of submissions to the UN so far, only the EU explicitly mentioned the 2C target.
  •  Climate finance also remains a very contentious issue and how far developed countries should provide aid for developing nations to cut carbon emissions and prepare for unavoidable consequences of climate change. In Copenhagen in 2009, developed countries pledged to mobiilize $100 billion annually by 2020. Countries are divided on the extent that developed economies would source financial aid for poorer countries from the private or public sector, and whether they should also supply low carbon technology assistance.

Many countries believe that progress on climate finance will help to unlock progress in the other areas.  Funding and other support for developing countries comes from a wide variety of sources – international institutions and mechanisms, national governments and the private sector. Given the complex multi-level global climate finance architecture there have been repeated calls not only to simplify access, in particular for Less Developed Countries, but for greater institutional and capacity development  that would enable donors to support country-owned climate change programmes and build on existing national systems to meet international climate change priorities.

While climate finance, for the most part, has been programmed bilaterally by developed countries, a significant proportion of climate finance has also been channelled through multilateral development mechanisms such as the Adaptation Fund,  the Clean Technol­ogy Fund and the Strategic Climate Fund, the World Bank’s Global Envi­ronmental Facility (GEF),  etc   as well as regional programs (e.g. the EU’s Global Cli­mate Change Alliance).

The newly established Green Climate Fund will play an instrumental role in channelling new and predictable financial resources to developing coun­tries to support mitigating greenhouse gases and to adaptation to the impacts of climate change.  The Board of the Fund meets in Korea on 18th to 21st May, see  and will make decisions on a number of crucial elements of its operating procedures including the guiding framework and procedures for accrediting national, regional and international implementing entities and intermediaries as well as the approval process, including the criteria for programme and project funding.

The effectiveness of climate finance remains a thorny issue internationally. Any assessment   must  go beyond wheth­er absolute targets are  met, rather than what impact financial flows  have. Ensuring money is well spent is vital for maintaining support for an international climate finance regime.  Ideally funding should support activities that have a powerful transformative or demonstrative  effect,  be used in a cost-effective manner and be nationally owned and aligned with local and national priorities. 

We at  strongly believe  that there are several critical lessons from many years of development co-operation and advocate that;

  •          Programmes for each nation must be country-led
  •          Countries must have strong climate change leadership which is supported from the top
  •          Country ownership and alignment with partners’ agendas and systems
  •          Harmonisation of donor activity and mutual accountability for delivery of results
  •          Assessing results essential to ensure continuous learning and accountability
  •          Monitoring and evaluation must be considered at different levels of activity (e.g. international, national,
    local, project level)
  •          Effectiveness is approached in different ways depending on who the actor is (e.g. provider, supporter or
    recipient of aid).

In future Blog postings the SmartEarth team will further explore the challenges and opportunities for developing countries in accessing climate finance and capacity building as well as the positive and proactive role that private sector can and must play.

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Noel Casserly

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