Could finance derail Paris climate talks?
Developing nations want the developed world to help them meet the costs of mitigating the effects of climate change and transitioning to a low-carbon economy. But the money might be hard to come by.
Washington — When it comes to curbing climate change, developing countries are asking the developed world to put its money where its mouth is.
As international negotiators prepare to convene in Paris for momentous climate talks this December, leaders from around the globe say they are committed to tackling the problem of rising greenhouse-gas emissions. So far around 150 countries have submitted their “Intended Nationally Determined Contributions” (INDCs), which detail how much each country plans to cut emissions. The pledges cover around 90 percent of global emissions, and although they may not be enough to reduce global warming to below 2 degrees C, experts agree they could curb warming significantly and put the world on a path towards further emission reductions.
The pledges are voluntary, so there is a great deal of flexibility and comfort with what’s already on the table. But despite the optimistic outlook most actors are bringing to the table, one big sticking point remains. Many developing nations are requesting additional funds to help them deal with the worst effects of climate change and transition to a low-carbon economy. Some have even suggested that they would not sign an international climate agreement if monetary support is not available.
As the 2009 Copenhagen climate talks were winding down, developed countries agreed to provide $100 billion in climate finance by 2020. Today climate finance advocates say that much of that pledge has yet to be delivered, and there are questions about whether or not it includes both public and private funds. The United States promised to contribute $3 billion in climate aid, including $500 million to be included in the 2016 budget. But disputes in Congress cast doubt on whether it will be possible to bring these bargaining chips to the table in time for the December meeting. Despite these obstacles, experts say they are confident that countries will work together to plan for a low-carbon future, even if the exact amount of climate finance remains ambiguous.
“The focus in Paris will be much more on how to continue mobilizing support for developing countries in the future, beyond 2020,” said Elliot Diringer, executive vice president of the Center for Climate and Energy Solutions, in an e-mail to the Monitor. “Finance is always a very tough issue in these talks, but I’m pretty confident differences can be bridged.”
One of the key questions during the Paris negotiations will be whether to establish a new collective finance goal beyond 2020, experts say. Meanwhile, some advocates will be pushing for greater transparency in accounting and a more rigorous definition of what counts as climate finance.
“There are going to be pushes for adaptation and mitigation finance targets,” says Karen Orenstein, senior international policy analyst for Friends of the Earth, an environmental organization.
“This is to make sure there is an actual concrete process that guarantees a scaling up instead of the wild, wild west system we have now where countries just claim they are contributing something,” Ms. Orenstein adds.
Promises for future funding, however, are unlikely to be well received in Congress. This summer, the House of Representatives passed an appropriations bill that prohibits the US from allocating funds to the Green Climate Fund (GCF), a vehicle set up to facilitate investment in developing nations as they adapt to climate change and curb carbon emissions. Meanwhile, Republican senators are reportedly planning new legislation that would require Congressional oversight for funding the GCF.
While public funding can be politically tricky to mobilize, private sector money may flow a bit freer, observers say. Over 1,000 private companies are planning to convene in Paris to pressure governments to meet their INDCs. Meanwhile, many of these companies have pledged to reduce their carbon emissions, too. Insiders say it’s likely much of the $100 billion earmarked for climate finance will come from the private sector.
But some climate finance advocates argue that public funds must play a role.
"In terms of the adaptation of the poorest countries, it’s really important that it’s public money,” says Bill O’Keefe, vice president for government relations and advocacy at the Catholic Relief Services, an organization that supports humanitarian projects in developing countries.
“Helping small farmers adapt is not an equity solution that private investors will be jumping over themselves to get to,” he continues. “If we’re not willing to help them meet the needs of their populations so they don’t have to trade development for ecology, they won’t play ball."
State Department officials say the inclusion of $500 million for climate finance in the 2016 budget continues to be a high priority for the Obama administration, and the administration is confident the funding will be approved.
Some estimates suggest that developing nations aren’t as far from their 2020 targets as some would suggest – though getting a precise count can be difficult. A report released in October by the Organization for Economic Cooperation and Development (OECD) and the Climate Policy Initiative estimates that public and private finance mobilized by developed nations for climate action in developing countries reached $62 billion in 2014, up from $52 billion in 2013.
“By this measure, developed countries are more than halfway towards their 2020 commitment, which is encouraging,” Barbara Buchner, senior director of the Climate Policy Initiative says. “But clearly there is still some way to go.”