Climate Finance Roadmap Charts Rocky Path for Developing Countries
With just a couple of weeks to go before this year’s United Nations climate summit (COP 22) in Marrakech, Morocco, a group of countries led by Australia and Great Britain published a roadmap to delivering the US$100 billion per year in climate mitigation funding that developed countries have promised for developing nations by 2020.
But civil society organizations are concerned that most of the funding will come in the form of loans, too much of it depends on private sector support, and not nearly enough money has been pledged to help the most vulnerable countries adapt to the climate impacts they already face, and will experience in the future.
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“Since the commitment was made in 2010, developed countries have significantly scaled up support to developing countries—aggregate levels were estimated at US$62 billion in 2014, up from US$52 billion in 2013,” the roadmap states. “We expect this upward trend to continue, as evidenced by the significant pledges made by many developed countries and multilateral development banks (MDBs) in 2015.”
Analysis by the Organisation for Economic Cooperation and Development (OECD) indicates that pledges in 2015 increased public climate finance from an average of US$41 billion between 2013 and 2014 to US$67 billion in 2020, and “modest assumptions about increased leverage ratios would lead to projected overall finance levels in 2020 above US$100 billion,” the roadmap adds. “We are confident we will meet the US$100 billion goal from a variety of sources, and reaffirm our commitment to doing so.”
OECD also projected that public finance for climate change adaptation will at least double between 2013-14 and 2020.
The roadmap lays out steps for developed countries to scale up their climate finance commitments, “significantly increase” adaptation funding, help developing countries implement mitigation and adaptation plans, clear barriers to developing countries’ access to available funds, and mobilize private sector funding.
But Oxfam UK climate policy lead Tracy Carty warned that the climate finance commitments so far were short on actual contributions and long on loans that will eventually have to be paid back. And some countries are simply “rebranding ordinary aid as climate finance,” The Independent reports.
The roadmap is a positive step, since it’s “the first time developed countries have said how they will meet the $100 billion,” Carty said. “But things just need to step up significantly,” based on a United Nations estimate that developing countries will need $140 to $300 billion per year by 2030 to adapt to climate change.
“Every dollar that is miscounted or overcounted, it’s the poorest people in the least developed countries who are suffering the most,” she said. “That’s a dollar they are not going to get.”
WWF said the roadmap “should serve to give confidence that climate finance transfers to developing countries will continue to increase, but ultimately fails to provide the needed certainty about future financing levels. It does provide a useful benchmark for assessing progress in meeting the US$100 billion target and financing the transition to low-carbon, climate-resilient development.”
The organization warned that the roadmap falls short in total funding levels, particularly for climate adaptation, and “uses questionable methodologies to measure and project financial flows which have been contested by developing countries and observers. This is especially with regard to accounting for loans and export credit agency financing.”
The plan also relies on private sector funding for almost one-third of the $100 billion countries had pledged to raise by 2020. That’s a problem because “it will be very difficult to direct profit-seeking private finance to adaptation needs, further limiting the availability of funds to developing countries,” WWF notes.