$27.9 billion in “fast-start” funding has so far been pledged by industrialized countries to help developing countries mitigate and adapt to climate change, according to a new climate finance tracking tool released by the World Resources Institute (WRI). The tool aims to create transparency around climate change funds to ensure that rich countries follow through on their commitments and that the money is not wasted or “lost.”
WRI says that while the pledges represent “a significant step in the right direction,” donors “still have much to do in meeting their Copenhagen fast-start pledge.”
“While this represents a significant step in the right direction, developed countries still have much to do in meeting their Copenhagen fast-start pledge,” WRI states on the its web site.
“The Accord mandates that fast-start funds have a ‘balanced allocation between adaptation and mitigation,’ are ‘new and additional,’ are ‘prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa,’ and include ‘investments through international institutions.'”
“In addition to meeting these criteria, next steps for developed countries include ensuring that their pledges are actually delivered. Though the commitments are clear, their delivery is uncertain. Some of the funds have yet to go through national budget appropriations processes.”
The tool is available at Summary of Developed Country ‘Fast-Start’ Climate Finance Pledges.
WRI also released a set of Q&A’s on climate finance pledges to date.
Have developed countries met their fast-start finance pledge?
Based on our research, pledges publicly announced by developed countries thus far total USD 27.9 billion.1 While this represents a significant step in the right direction, developed countries still have much to do in meeting their Copenhagen fast-start pledge. The Accord mandates that fast-start funds have a “balanced allocation between adaptation and mitigation,” are “new and additional,” are “prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa,” and include “investments through international institutions.” While the Copenhagen Accord was not formally adopted by the Conference of the Parties, these criteria and others are often echoed in Party positions to the UNFCCC as well as in the negotiating text. It is not clear that developed countries’ fast-start finance contributions fulfill these criteria.
In addition to meeting these criteria, next steps for developed countries include ensuring that their pledges are actually delivered. Though the commitments are clear, their delivery is uncertain. Some of the funds have yet to go through national budget appropriations processes.
Do the funds have a “balanced allocation between adaptation and mitigation”?
Countries often specify the general objective that their fast-start funds will support. For example, of the EUR 2.39 billion confirmed pledge from 19 EU Member States and the European Commission, 63% will support mitigation while 37% will support adaptation. Several countries involved in the Interim REDD+ Partnership — a process created parallel to the UNFCCC to ensure effective and sustainable REDD-plus (reduced emissions from deforestation and forest degradation) actions over the next few years — have also specified that at least 20% of their funds will support REDD-plus. However, without an agreed-upon definition among countries of what constitutes a “balanced allocation,” we cannot answer this question.
Are the pledged funds “new and additional”?
“New” funding represents an increase relative to pledges or allocations from previous years. A number of pledges are restated or renamed commitments already made in the past. For example, Japan’s Hatoyama Initiative resembles the previously announced Japanese Cool Earth Partnership, with some new resources included in the Initiative. Countries such as the United Kingdom and the United States are counting previous commitments to the Climate Investment Funds (CIFs) as part of their fast-start finance pledge.
Funds that are “additional” ensure that their delivery does not result in the diversion of funds from other important objectives such as development. In other words, climate mitigation and adaptation funds should be additional to development aid. Parties to the UNFCCC have not yet achieved consensus on a clear and specific definition of ‘additionality’ that can be applied uniformly to developed country financial pledges. As a result, countries have proposed a variety of methods for defining the additionality of their fast-start finance.
Do the pledges include “investments through international institutions”?
A significant portion of the fast-start funds will flow through bilateral channels (from one country to another). The Climate Investment Funds (CIFs) and the Global Environment Facility (GEF) are the primary multilateral institutions through which other funds will be channeled. The governance of the funds has implications for the effectiveness and perceived legitimacy of the overall climate finance architecture. Developing countries generally prefer that institutions governing finance ensure developing country ownership of funded activities and prioritize funding for the most vulnerable countries and communities. Developed countries tend to emphasize the need to minimize bureaucratic costs and ensure the effective use of resources.
What are the next steps to ensure clarity on the delivery of climate finance pledges in the future?
It is difficult to track and monitor fast-start finance pledges in the absence of a common reporting system, akin to the one proposed by WRI. Current reporting systems of the multilateral development banks, under the UNFCCC, and under the OECD’s Development Assistance Committee are decentralized and often not comprehensive. The Conference of the Parties at COP-16 in December, if not sooner, should begin the process of creating draft guidelines for reporting of financial information in a comparable, transparent, complete, accurate and efficient manner. While implementing this common reporting format may take some time, in the interim Parties will need to increase the transparency of their fast-start finance in a coordinated way in order to demonstrate that they are delivering on their Copenhagen fast-start pledges.