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CLIMATE CHANGE: New Financial Scheme Turns Heat on Rich Nations
By Marwaan Macan-Markar
BANGKOK, Oct 11 (IPS) - A new financial mechanism to help the developing world deal with the
challenges posed by climate change looms as a major hurdle on the road
leading up to a United Nations summit in Copenhagen in mid-December.
Negotiators from the developing world and the developed world have only
five days of climate talks in Barcelona, Spain from Nov. 2 to 6 to bridge stark
differences that have emerged between the developed and developing nations
before they head to the Danish capital for the pivotal U.N. climate change
summit.
The only consolation, for now, seems to be hints that "there was some
convergence in language" between negotiators from the two camps over the
need for climate change funds for the developing world during the two weeks
of the U.N. climate change talks that ended here on Friday evening.
"Developed world negotiators came here and shared beautiful language, but
we want those words to be translated to real commitments in finance," Su
Wei, chief negotiator for China, told IPS. "We have to set up a new financial
mechanism that will be boosted by public funds from the developed world."
"Creating this new financial mechanism will be a crucial part of the
Copenhagen agreement," he added. "The burden is on the developed world to
help bridge the differences between them and the developing world."
"We came here with hope and confidence, but have to leave here with
disappointment and deep concern," Su told negotiators during the closing
session of the Bangkok talks. "In Barcelona we need to agree on financing."
His views were echoed by Bernarditas Muller, a leading climate change
negotiator for the Philippines. "We are extremely concerned by the lack of
numbers and clear funding commitments by the developed world," she told
IPS. "There is an attempt to shift the responsibility of financing to developing
countries, to depend on market mechanisms and the private sector."
Recent estimates by the World Bank placed the bill at between 75 billion U.S.
dollars and 100 billion U.S. dollars annually till 2050 for the developing
countries to cope and adapt to the ravages of global warming due to
greenhouse gas (GhG) emissions.
The Bank’s calculations were based on how much money developing
countries would need to adapt to an environment that would get warmer by
two degrees Celsius than pre-industrial levels by 2050. Such a warmer Earth
would result in "more intense" natural disasters, droughts, heat waves and
"extreme weather" patterns, revealed the Bank’s study, released on Sep. 30.
Just how wide the gap to create a new financial architecture was reflected in
the contrasting views expressed in a discussion paper on financing climate
change during the just-ended U.N. climate change talks. Driving the push for
such new funding mechanism was the Group of 77 (G77) and China, who,
with its 130 members from the developing world, makes up the largest body
of the over 180 countries that participated during the U.N. climate talks here.
For one, the developing world’s negotiators want the new mechanism to be
placed within the ambit of the U.N. Framework Convention on Climate
Change (UNFCCC), enabling its members who are party to the international
treaty to combat global warming to have a fair say in the disbursement of
funds.
This will ensure "an equitable and balanced representation of all Parties with
a transparent system of governance to address all aspects of the means of
implementation (of climate change funding) for developing countries," states
a proposal by the G77 and China bloc made available to negotiators – and
seen by IPS – during the last week of the talks here.
Proposals from negotiators of the developed world argued differently, placing
more confidence in international financial institutions like the World Bank and
the existing Global Environmental Facility, a partnership of some U.N.
agencies and the Bank, to guide climate change financing. This financial
arrangement ensures that the richer nations will continue to have a greater
say in the manner funds are disbursed to developing nations.
For another, the source of money for three funds – to help developing
countries adapt to climate change, for mitigation and a ‘Multilateral Climate
Technology Fund’ – exposed deep faultlines. Developing world negotiators
want the Copenhagen summit to endorse a package that would guarantee
new public funds for climate change beyond what the developed world gives
as its current development aid.
"The level of new funding can be set at 0.5 percent to one percent of the GNP
(gross national product) of (industrialised countries)," states the text of the
developing world’s proposal.
Last year, the developed nations gave close to 120 billion U.S. dollars in aid
to developing nations, reveals the Organisation for Economic Cooperation
and Development, a club for the rich, industrialised nations.
The European Union, seen by some developing country negotiators as the
bloc that should take the lead in the climate change talks, offered a mixed
message on the issue of financing. "We will need both public and private
financing," said Anders Turesson, chief negotiator for Sweden, at a press
conference.
"We will have a meeting for (EU) finance ministers on October 20," added
Turesson, who spoke on behalf of the EU at the climate talks. "Hopefully, by
Barcelona we will have a much more elaborate message on the financing
side."
The current pressure by the developing world for the developed world to
deliver stems from an "action plan" that all countries agreed to during a U.N.
climate change summit in Bali in December 2007. The summit in Indonesia
was seen as a breakthrough in environmental diplomacy, following the
agreement for the first time by the developing world to slash its own GhG
emissions on a national and voluntary basis on condition that the developed
world would fund the cost to create a green-friendly environment.
But serious discussions about climate funds from the countries responsible
for the largest chunk of GhG emissions – 37 industrialised countries, the EU
and the U.S. – had not surfaced till climate change negotiations in Accra,
Ghana, last year.
"The developed countries engaged with the developing countries on the
financial issue more seriously here. There was a slight improvement after the
Accra meeting," said Meena Raman, legal advisor for the Third World
Network, a regional think tank based in Penang, Malaysia. "But you cannot
say there was much progress because of what the developing countries want
with the new financial architecture."
"It is a fight over governance and source of funding," she told IPS. "Barcelona
will be a make or break moment on the financial architecture."
(END/2009)
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