Copenhagen
Additionality of climate finance still a top priority in 2010
Last Thursday the Overseas Development Institute hosted a lunchtime meeting on the topic of climate finance additionality. The presentations centred on the ODI/ONE paper produced in the run-up to the Copenhagen climate change summit last December, which showed that if climate finance was diverted from existing development assistance budgets then Africa would lose out.
Of course one of the major impacts of climate change is to make the Millennium Development Goals harder to achieve. One of the phrases that stood out at the event was that Africa is now essentially being forced to ‘develop in hostile circumstances’. This situation is not helped when politicians engage in dubious accountancy practices that simply repackage development assistance as climate aid.
For ONE’s Executive Director Jamie Drummond, a speaker at the event, the key is now to focus on how we can raise finance for climate adaptation and mitigation from outside of public budgets. For example, innovative finance ideas such as carbon taxes or aviation levies could raise large sums that could go directly to helping poor communities cope with climate change.
There are, though, opportunities associated with climate change for Africa. The continent has huge potential for renewable energy generation and to a large extent has not started down the path of carbon-driven industrialisation. A new green economic model for development could not only be the answer to growth and jobs in Africa, but also pioneer a low-carbon future for the world as a whole.
Climate change panel must be about action, not words
Tucked away in the accord agreed in December’s Copenhagen climate change summit was a promise to form a ‘High Level Panel’ to examine how exactly the target of mobilising $100bn a year for developing countries by 2020 would be reached. Now, after a frustrating delay, it appears that the Panel is finally up and running. UN Secretary-General Ban Ki-moon announced last week that it would be chaired by Prime Minister Meles Zenawi of Ethiopia and Prime Minister Gordon Brown of Britain. Other members of the Panel will be announced shortly and are likely to be appointed for 10 month terms.
Now that the Panel is set up it is critical that it acts swiftly to come up with a range of options for raising substantial additional finance. For example, there is headway being made on new taxes of the financial sector and it may also make sense to authorise use of the International Monetary Fund’s Special Drawing Right to help make the transfer to a low carbon economy. New levies on aviation and shipping could also be part of the solution, whilst there will also be revenue raised from carbon certificates.
The Panel needs to look at all of these and come up with a realistic plan of action – possibly using a combination of the above options rather than one alone. What we know is that all of these ideas are technically feasible, but it is political will that is lacking. The Panel therefore needs to play its role in galvanising politicians across the world to make sure that promises to developing countries are kept.
There is no doubt the members of the High Level Panel will have one of the most challenging jobs in the world this year. However, as long as they are focused on action and not just talk, then they could be the people who restore trust in climate negotiations and deliver the vital extra resources to help Africa adapt to climate change.
Africa a big loser if climate finance is not additional
Africa will lose out if money pledged by rich countries at the Copenhagen climate change meeting last December does not come in addition to their existing aid promises. This is the stark message in a research paper from leading development think tank the Overseas Development Institute (ODI), commissioned by ONE.
The report states that if finance for climate change adaptation were to come from existing and promised aid flows it would necessarily result in a money being taken away from health and education, and reallocated to sectors such as agriculture, coastal defence and water.
While sub-Saharan Africa receives 38% of global aid, the World Bank estimates that their share of adaptation needs is 22% – in part because there is less expensive existing infrastructure to protect. ODI conclude that “It is crucial to underline the importance of additionality of climate finance to aid. If this is not explicitly stated and implemented, the possibility of aid diversion allocated according to adaptation needs is likely to lead to the neglect of aid to Africa.”
The findings come just days after Bill Gates warned in his annual letter that health funding could be cut if the $100bn target set at Copenhagen took money out of other development priorities. “If just 1% of the $100bn goal came from vaccine funding, then 700,000 more children could die from preventable diseases” he wrote. If countries do not avoid this type of dangerous double counting, the already off track Millennium Development Goals will be dealt another heavy blow.
The millions of people around the world who took action in the run-up to Copenhagen, including tens of thousands of ONE members, will now be needed more than ever as we attempt to make sure that vital work on climate does not come at the expense of the world’s poorest people.
Read the report ‘Climate financing and Development – Friends or foes?’
Update: The Financial Times today published a letter from ONE’s co-founder and Executive Director Jamie Drummond on this important issue. Read the letter here.
Without ‘additionality’ of climate funds, Copenhagen adds up to nothing
As world leaders fly home from the climate change summit, the agreement reached in Copenhagen could add up to nothing unless the funding offered is not double counted from existing aid promises.
Late last night an agreement was brokered by the US, China, South Africa, India and Brazil. This included $10bn a year in so called ‘fast track’ financing for the next 3 years and $100bn a year by 2020 for poor countries to cope with climate change. But currently these sums will largely be subtracted from promised resources to help these same countries fight poverty.
ONE has been campaigning hard against this dangerous double counting, which undermines both sustainable international development and a good global deal on climate change. Last week we handed over a petition from more than 80,000 ONE members to the Danish government, as chair of the summit, and the US delegation. We called on them to ensure that new funding is additional to existing and promised aid flows and that development promises are kept in full.
Here’s what ONE’s Executive Director Jamie Drummond had to say on the agreement that was reached last night:
“Climate change is putting additional stress on poor countries – which is why they need additional funds to cope with it – on top of existing and promised aid levels.
Promises of aid made by the G8 in Gleneagles in 2005 must not be lost in Copenhagen. Without a clear commitment that these climate funds are additional, the dollar amounts are next to meaningless.
This debate over ‘additionality’ might seem arcane, but within the details lie billions of dollars – and very real impacts on millions of lives. Without this additionality, Copenhagen adds up to nothing.
It is not clear how a cap on 2 degrees will be achieved, but it is very clear that much more can and must be done, including harnessing the potential of African and other developing countries to be renewable energy hubs and help capture carbon through growing trees.”
ONE supports the African proposal for an interim target of US$50bn by 2015 on top of existing and promised aid to help the poorest countries – many of them in Africa – with pressing adaptation needs. The “Copenhagen Accord” mentions a High Level Panel to assess how alternative sources of funding can contribute to raising genuinely additional funds.
This urgent High Level Task Force should be convened immediately to look into alternative sources of climate finance to complement additional public funding from rich countries. These sources could include: revenue from aviation and shipping, international auctioning of emissions allowances, a financial transactions tax and the proposal to use the IMF’s own currency, known as Special Drawing Rights. The need for accountability and transparency for these new funds is also paramount.
With the agreement in Copenhagen weaker than we hoped, we now know we have much more work ahead of us.
Baaba Maal Talks Climate
Yesterday I had the honour of speaking to Senegalese singer and guitarist Baaba Maal after he had performed at a special event here in Copenhagen.
Watch the video:
Baaba Maal, one of Africa’s most famous musicians, is attending the Copenhagen summit as the climate change ambassador for Africa Talks Climate, a ground-breaking research and communication initiative that explores the views of African citizens on climate change.
Baaba Maal performing at the event in Copenhagen last night
Yesterday in Copenhagen
At 6am yesterday morning I found myself tramping through deep snow on my way to the Bella Centre where COP15, the global climate change negotiations, are taking place. After waiting in line outside in subzero temperatures (I don’t think I’ve ever felt so cold in my life), I finally got into the building, which is hosting over 100 Heads of State, 5,000 journalists and plenty of others in a vast cavernous building.
In the morning UK Prime Minister, Gordon Brown presented the Mexican President, Felipe Calderón, with the GLOBE Award for International Leadership on the Environment. Accepting the award Calderón called for a renewed effort to reach an agreement in Copenhagen.
This was immediately followed by a press conference by the Africa Group, who stated their support for Ethiopian Prime Minister Meles Zenawi, who is leading the African delegation, and emphasised that the Africans are all here speaking with one, united, voice. As this was going on, the room was steadily filling up with more and more people. I soon realised why. US Secretary of State Hillary Clinton arrived to announce a US commitment to long-term financing for adaptation, mitigation, and deforestation for the world’s poorest people.
Later I heard from the Burkina Faso and Bangladeshi delegations, the Speaker of the US House of Representatives, Nancy Pelosi, and then from the European Union. I was also lucky enough to catch an update on the state of play from Yvo de Boer, the United Nations Framework Convention on Climate Change Executive Secretary. His opening line was about holding tight saying that ‘the cable car is moving’. Over the last few days talks have stalled and progress has been very slow, but yesterday he believed that things were moving forward again at a better pace.
But with the summit now in its final day, time is running out for an agreement to be reached.
Clinton Delivers Big
This morning as weary-eyed negotiators made their way to the Bella Center for the final 48 hour push in the climate negotiations which seemed all but deadlocked, US Secretary of State Hillary Clinton caffeinated the room with big news – a US commitment to long-term financing for adaptation, mitigation, and deforestation for the world’s poorest people. One of the key hurdles to the negotiations to date has been this item of long term financing. Short term financing numbers, also referred to as the fast track fund, have been on the table for some time: a $10 billion per year commitment for years 2010, 2011, and 2012. The actual mechanism and its transparency are still being worked out, but commitments have been pouring in from the EU, Japan, and others towards the fast track fund, and the US has stated that it will contribute its fair share.
The long term, and the scale of the long term financing, has however been an issue with varied opinions and much debate. So this morning when the US announced its endorsement of long term financing, with a number attached to it – $100 billion per year by 2020 – the negotiations seemed to get rejuvenated. This number is also in line with the African proposal which calls for $10 billion per year in fast track funding for years 2010, 2011, and 2012; $50 billion per year by 2015; and scaling up to $100 billion per year by 2020. All of this is however, contingent on a global effort.
From Secretary Clinton’s announcement, “And today I’d like to announce that, in the context of a strong accord in which all major economies stand behind meaningful mitigation actions and provide full transparency as to their implementation, the United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries. We expect this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. This will include a significant focus on forestry and adaptation, particularly, again I repeat, for the poorest and most vulnerable among us.”
Read the full statement here:
For immediate release and posting.
U.S. DEPARTMENT OF STATE
Office of the Spokesman
For Immediate Release December 17, 2009
2009/T17-1
Remarks
Secretary of State Hillary Rodham Clinton
At the United Nations Framework Convention on Climate Change
December 17, 2009
Copenhagen, Denmark
SECRETARY CLINTON: Thank you all for coming this morning. I arrived in Copenhagen several hours ago. I’ve just had a briefing on the state of the negotiations. I’d like to give you a brief report on where we stand and then make an announcement.
First, let me thank Todd Stern and the terrific team representing the United States at this conference. Actually, they’ve been representing us ever since the beginning of the Obama Administration over this past year.
We appointed Todd Stern as our first-ever Special Envoy for Climate Change because we understood that this is one of the most urgent global challenges of our time, and it demands a global solution. Climate change threatens not only our environment, but our economy and our security — this is an undeniable and unforgiving fact.
So in addition to the robust actions that the Obama Administration has taken at home — from the historic investment in clean energy included in the Recovery Act to the new efficiency standards for cars, trucks, and appliances — we have pursued an unprecedented effort to engage partners around the world in the fight against climate change. And we produced real results.
President Obama launched the Major Economies Forum on Energy and Climate which brought together key developed and developing countries. He also spearheaded an agreement, first among the G20 and then the Asian-Pacific Economic Cooperation nations, to phase out fossil fuel subsidies.
And after a year of diplomacy, we have come to Copenhagen ready to take the steps necessary to achieve a comprehensive and operational new agreement that will provide a foundation for long-term, sustainable economic growth. Our U.S. delegation includes not just the President of the United States, but six members of his Cabinet.
We have now reached the critical juncture in these negotiations. I understand that the talks have been difficult. I know that our team, along with many others, are working hard and around the clock to forge a deal. And we will continue doing all that we can do. But the time is at hand for all countries to reach for common ground and take an historic step that we can all be proud of.
There is a way forward based on a number of core elements: decisive national actions, an operational accord that internationalizes those actions, assistance for nations that are the most vulnerable and least prepared to meet the effects of climate change, and standards of transparency that provide credibility to the entire process. The world community should accept no less.
And the United States is ready to embrace this path.
First, we have announced our intention to cut our emissions in the range of 17 percent below 2005 levels in 2020 and ultimately in line with final climate and energy legislation. In light of the President’s goals, the expected pathway in pending legislation would extend those cuts to 30 percent by 2025, 42 percent by 2030, and more than 80 percent by 2050.
Second, we also recognize that an agreement must provide generous financial and technological support for developing countries, particularly the poorest and most vulnerable, to help them reduce emissions and adapt to climate change. That’s why we joined an effort to mobilize fast-start funding that will ramp up to $10 billion in 2012 to support the adaptation and mitigation efforts of countries in need.
And today I’d like to announce that, in the context of a strong accord in which all major economies stand behind meaningful mitigation actions and provide full transparency as to their implementation, the United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries. We expect this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. This will include a significant focus on forestry and adaptation, particularly, again I repeat, for the poorest and most vulnerable among us.
So there should be no doubt about the commitment of the United States to reaching a successful agreement here in Copenhagen and meeting this great global challenge together.
But ultimately this must be a common effort. We all know there are real challenges that remain in the hours left to these negotiations. And it is no secret that we have lost precious time in these past days. In the time we have left here, it can no longer be about us versus them – this group of nations pitted against that group. We all face the same challenge together.
I have often quoted a Chinese proverb which says that when you are in a common boat, you have to cross the river peacefully together. Well, we are in a common boat. All of the major economies have an obligation to commit to meaningful mitigation actions and stand behind them in a transparent way. And all of us have an obligation to engage constructively and creatively toward a workable solution. We need to avoid negotiating approaches that undermine rather than advance progress toward our objective.
I am deeply concerned about the consequences for developing countries – from Bangladesh to the Maldives, from the Caribbean to West Africa and the Pacific Islands – if we cannot secure the kind of strong operational accord I’ve described today. We know what the consequences will be for the farmer in Bangladesh or the herder in Africa or the family being battered by hurricanes in Central America. Without that accord, there won’t be the kind of joint global action from all of the major economies we all want to see, and the effects in the developing world could be catastrophic. We know what will happen. Rising seas, lost farmland, drought and so much else. Without the accord, the opportunity to mobilize significant resources to assist developing countries with mitigation and adaptation will be lost.
Over the next two days, we will be discussing these issues further. This problem is not going away, even when we leave Copenhagen. But neither is our resolve. We must try to overcome the obstacles that remain. We must not only seize this moment, but raise our oars together and row in the same direction toward our common destination and destiny. And the United States is ready to do our part. Thank you.
“We will drown if we don’t act.”
It’s week two of the climate talks. And while world leaders continue to confront the challenges of climate change in Copenhagen, Africans have been gathering together in their communities for months to share stories and search for solutions to help fight the effects.
Throughout the fall, Oxfam conducted dozens of these community-wide climate hearings across the African continent.
In the town of Assella, Ethiopia, over ten thousand people ran, walked, even rode to a local stadium to make their voices heard.
In Hadado, Kenya, a local man told the crowd, “I have never seen the situation this bad—there is no water at all. Cattle are our livelihoods, and when they are gone we have nothing left. Our children can’t go to school because they have to spend all day looking for water for the cattle. We desperately need another borehole and more water here.”
In Cape Town, South Africa, Archbishop Desmond Tutu told a packed room that “We will drown if you don’t act. We are going down the tube together. Some might go in Mercedes Benz, others in local taxis.”
The Climate Hearings are an Oxfam project, as part of the tcktcktck.org Climate Campaign. Find out more about the Oxfam hearings in Africa here (don’t miss the photo essays, too)—and read about their global hearings here.
Copenhagen Update
World leaders are arriving in Copenhagen tonight and tomorrow, but there has not been sufficient progress in the negotiations in order to present them a solid document for final negotiations. The current draft text is still full of unsettled issues. (The U.S. and China presumably will not put more ambitious emission cut targets on the table, so a strong deal looks increasingly unlikely.)
Meanwhile, chances to get leaders to agree to “new and additional resources on top of existing and committed” funding are fading. There are two types of wording for additionality in the current draft [no consensus yet], one for fast track and one for long term financing.
Fast track funding (2010 – 2012) is supposed to be “new and additional”, which is to be interpreted as additional to existing ODA (funding) flows, whereas post 2012 funding is “scaled up, predictable new, additional and adequate.”
There will be a figure for 2010 – 2012 climate financing, presumably 10 billion, and an annex specifying the amounts per country. There seems to be relatively wide agreement on establishing REDD, but no intention to use carbon market mechanisms, so funding will come from the (limited) public sources. There is a general placeholder for aviation and maritime bunkers so support of a high level task force to investigate innovative financing seems sensible.
What is the CDM?
In the final post in his series looking at issues being discussed in Copenhagen, Joe Powell looks at the CDM…
The Clean Development Mechanism (CDM) was a product of the Kyoto Protocol and is designed to make sure emission reductions are implemented in a cost-efficient way.
The underlying idea is that in many cases emission cuts are cheaper to make in developing countries. Private companies invest in projects in developing countries, which result in lower emissions. Independent institutions then verify the amount of emissions saved and the private companies are given credits (known as Certfied Emission Reductions, CERs) equivalent to the amount of carbon saved. These credits can then be used in order to cut less emissions domestically, which is known as offsetting. The credits can also be traded on a “carbon exchange”. It all sounds a bit technical but the CDM is benefitting developing countries as they receive new investments in in clean technology. However, in its current form, it has been criticized as being cumbersome and bureaucratic.
Currently over 1,000 projects have passed the rigorous registration process, which requires evidence that “real, measurable and verifiable emission reductions that are additional to what would have occurred without the project” will take place. The vast majority of these projects are taking place in Asia. Despite its tremendous potential to generate renewable energy, Africa is barely benefitting. There are several reasons for this, but I just want to illustrate a particularly striking one: under the CDM rules, a wind park in India will generate several times more carbon credits than a wind park in Ethiopia. The rationale is that India generates the bulk of its power using “dirty” coal, whereas Ethiopia relies overwhelmingly on clean hydropower. So, the CDM argues that the so called “carbon content” of Indian electricity is higher, and replacing it saves more carbon. The result of this rule however is perverse as it gives countries an incentive to “go dirty” first and then be paid to “clean up”. And It penalizes countries that have low emissions.
ONE is therefore calling for CDM to be reformed so that Africa can better take advantage of its potential for offsetting projects and support global efforts to mitigate climate change. Africa can contribute a lot through small-scale projects, but these are currently less attractive to investors. Therefore it needs to become possible to generate CER’s through bundling several small scale interventions together. The mechanism also needs to become more predictable to encourage greater participation from the private sector. Finally, African countries and communities will need support to build up their capacity ,and in some cases start-up finance, to enable them to participate in this scheme. In this way CDM will really be able to take off in Africa and the continent can bring to bear its full potential in stemming climate change
You can read more about ONE’s policy on CDM in our document Africa and the Global Climate Deal.
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TAGS: Climate and Development, Copenhagen, Millennium Development Goals