Open Letter On Securing Better Climate Finance Promises

Dear Delegate,

Decades of impressive promises on development aid have not been kept by the countries which made them. At Gleneagles in 2005, the G8 committed to double aid to Africa to $50bn by 2010. Yet by the end of this year only 61% of that money will have been delivered .

Similar promises are now being made with climate finance – a total of $30bn in the 2010-12 period, and $100bn per year for developing countries by 2020. But we don't have any indication as to how these figures will be reached, nor any guarantee that they won't be taken from dwindling aid budgets.

We therefore propose five key principles which should be applied to any climate finance promise made during the ongoing UNFCCC negotiations. Governments and institutions should address these principles when they make climate finance announcements. In response developing countries, media and civil society must ask – does this welcome commitment meet the TRACK principles of the “charter for good promises?” In other words is the promise Transparent, Results-oriented, Additional, are any Conditionalities clear, and how will we know whether it is being Kept?

The EU’s interim report on fast-track finance is an example of a welcome initiative that could be strengthened if more attention were played to these principles. Greater country-by-country analysis of commitments, insertion of stronger language on additionality to existing and promised ODA, and a clearer guarantee that all money delivered for adaptation will be grants rather than loans, are all steps that the EU can take to build on their report.

The most vulnerable countries, particularly those in Africa, did nothing to cause this climate crisis but are being hit first and worst. The pledges on fast-track finance and the $100bn per year for adaptation and mitigation will add up to nothing unless governments abide by these principles in Bonn, Cancun, South Africa and beyond. Justice tells us that these promises cannot be broken.

Yours sincerely,

The ONE Campaign

The five TRACK principles and the five questions to ask:-

1.    IS IT TRANSPARENT?

Every numerical commitment should come with – or be swiftly followed by - a clear presentation which shows: over how many years the commitment is for; a clear deadline; which budget line item the commitment is coming from; what the initial baseline is; and how the budget line item will change in future years.  Often official commitments are multiannual, and one lump sum is announced when in fact it is the sum of many individual separate annual contributions.  Therefore every climate finance commitment should have all the key information disclosed by each donor separately about that promise.  This information needs to be comprehensive, comparable and timely, and be available and accessible to the citizens of both recipient and donor countries. All this information should be available and accessible, ideally in machine readable formats, on websites and in line with the International Aid Transparency Initiative format standards.

2.     IS IT RESULTS-ORIENTED?

Financial promises should link expenditure to real-world outcomes.  In the context of finance for adaptation these outcomes should be set by the recipient countries. A clear presentation of desired results will help the citizens of developing countries hold their government accountable for delivery of these results.

3.    IS IT ADDITIONAL?

Perhaps the most difficult aspect of promise making, and one which makes it vulnerable to abuse, is judging whether or not any of the money promised is new and additional – something which is often demanded by activists and claimed by promise-makers. However, claims of additionality are quite slippery. If implemented adequately the first principle of transparency should take care of many of the concerns about additionality. But because of confusion about the term it is proposed that it be its own special principle.
The scope for confusion can be readily seen.  For example, spending may be ‘additional to previous levels’, ‘additional to promised increases above current levels that were already previously planned’, or ‘additional for the issue in question but at the expense of other objectives within the overall budget’.  New additional money for any given initiative could come either from efficiency savings, or from a reallocation from other budgets, or from an entirely new allocation into the budget as a whole – all this information should be readily accessible or a judgement about additionality will be hard to make.  Overall, every promise that claims to be ‘additional’ must answer the question ‘additional to what?’

4.    IS IT CONDITIONAL?

Often increases in resources are conditional upon changes in policy, both from the government and other agencies who are programming the resources, and above all from the recipient developing country implementing partner. Some conditionalities are onerous and much research has shown that conditions that impose policy choices on the recipient tend to be counterproductive. Others are important and necessary (i.e. the need for fiscal transparency and good audits and monitoring of projects). In either case, however, it is important for the conditionalities to be clear and openly presented.

5.    HOW WILL WE KNOW IT’S BEEN KEPT?

As part of any major promise a mechanism should be identified, preferably an independent mechanism, to measure and monitor progress through the lifecycle of the promise to help ensure the promise is kept and performance along the way is publicised to citizens and the media. Key moments should be identified, such as the Cancun Summit, where public interim progress reports can be delivered.  This mechanism should build on and support domestic accountability systems in the recipient countries.

More information on the TRACK principles