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Climate change: Where is the money?

By Liu Guangyuan
BRUSSELS. - Yet another round of UN climate talks kicked off recently, this time in Warsaw, occurring against the backdrop of Typhoon Haiyan, which has reportedly killed at least 10 000 people in the Philippines.

But two new papers point out that funding promised to help countries adapt to climate change have been insufficient and untransparent.

In fact, from 2010 to 2011, commitments for adaptation finance decreased in the Philippines, according to a joint paper by Oxfam, the World Resources Institute and the Overseas Development Institute. The paper looked specifically at a 2009 commitment made by rich countries - which came to be known as "fast-start finance" - to fund developing countries' adaptation efforts. Another recent Oxfam paper also showed that rich countries have failed to keep that 2009 promise.

At the opening of the UN talks in Warsaw, Naderev Sano, the Philippines' climate change negotiator, reportedly announced that he would embark on a voluntary fast until there was action that would protect his country's future. The 2009 fast-start finance commitment, which called for developed countries to provide US$30 billion between 2010 and 2012, was made at the UN Framework Convention on Climate Change meeting in Copenhagen. At the same meeting, the developed world promised to mobilise US$100 billion a year by 2020.

A number of think-tanks and academics have since underlined the difficulty of identifying and accounting for this money because of discrepancies in reporting, the lack of a common understanding of what "adaptation" and "vulnerability" mean, and a lack of transparency.

At a recent board meeting of the Adaptation Fund, a fund set up under the UNFCCC, an aid official said money is running short. "It (the Adaptation Fund) has eight approved adaptation projects (for developing countries) stuck in the pipeline that require about US$60 million," said Sven Harmeling, climate change advocacy coordinator for the NGO CARE International.

The new paper by Oxfam "estimates a total of US$16,3 billion of finance for 2013 . . . though the actual net budget allocations may be closer to US$7,6 billion, as some countries have counted loans that will be repaid". The amount, whether US$7,6 billion or US$16,3 billion, "is well below even the lowest estimate of what it is going to cost developing countries to adapt to climate change", said Oxfam.

No one knows for sure how much money developing countries will need to adapt. The UNFCCC has estimated that by 2030, poor countries will need between US$28 billion and US$59 billion a year to adapt. The World Bank thinks between US$20 billion and US$100 billion should do it. The European Union Commission put the amount between US$10 billion and US$24 billion a year by 2020, and the African Group of climate change negotiators arrived at a sum of more than US$67 billion a year.

But Oxfam points out "by comparison, developed countries spent US$55-90 billion a year during 2005-2011 on fossil fuel subsidies; the Netherlands is spending 1 billion euros (about US$1,3 billion) to protect its lowlands from flooding; and Australia will spend US$12 billion till 2018 on adapting to domestic water stress."

The ODI/Oxfam/WRI paper, which looked at funding flows for adaptation into four countries - Nepal, the Philippines, Uganda and Zambia - noted that these countries' "efforts to be accountable to their own citizens for addressing the impacts of climate change are hindered by the lack of transparency and accountability of donors."

Lack of clarity on what counts as adaptation finance, "incomplete donor reports . . . and the volume of adaptation finance that actually flows to recipients outside of the beneficiary country are just a few of the challenges that these countries face . . . Donors need to be much more explicit about what they are spending their money on if these countries are to be able to make sure there are adequate resources flowing to address the needs of the most vulnerable and that these resources are being used effectively." Oxfam said that 24 developed countries have still not confirmed their climate finance for 2013. "For 2014, the situation is even worse as countries (that) together provided 81 percent of Fast Start Finance have still not announced any figures. Just one country, the UK, has announced its plans for climate finance in 2015."

"Rich countries must make it clear to poor countries what money is available now and in the coming years to help them adapt to climate change and reduce their emissions," said Oxfam's climate spokesperson, Kelly Dent, in a press statement. "Uncertainty from one year to the next makes it impossible for vulnerable countries to take the action they need to protect their citizens. This murkiness will only heighten distrust around the negotiating table."

The Adaptation Fund has approved environmental and social safeguards that must now accompany any application for funding. For instance, if a project involves the relocation of people from a vulnerable area, the proposal must include details and plans about the new home for those displaced.

This is a "positive development", said Harmeling. The fund also allows direct access if the project-implementing authorities in a country are approved by the board. Developing countries favour direct access to funds as it provides them with more say over how to spend the money.

Rwanda and the Pacific Ocean islands, for example, can now directly access money from the Fund should they submit project proposals that are approved. "Direct access provides countries with a strong sense of ownership and raises the bar in terms of implementation," said Harmeling.

The WRI/Oxfam/ODI paper shows that Nepal and the Philippines have "prioritised local development processes", which have helped strengthen a sense of ownership over adaptation efforts. In other places, such as Zambia and Uganda, there has been "a less explicit focus on local-level planning". - Irin





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