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Is climate finance little more than aid business as usual?

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Monday, 12 April 2010 16:54 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

An argument you hear over and over about the money rich countries have promised poor countries to help them deal with the impacts of climate change is that it should be different from aid. The reasoning goes like this: the world's wealthy, industrialised n

An argument you hear over and over about the money rich countries have promised poor countries to help them deal with the impacts of climate change is that it should be different from aid.

The reasoning goes like this: the world's wealthy, industrialised nations are responsible for messing up the global climate because historically they've emitted most of the greenhouse gases that are warming the planet. Yet the poorest people who are bearing the brunt of the impacts of climate change - more extreme weather and rising seas - are those who have polluted the least.

Therefore paying to help them cope is a way of righting climate wrongs. It's a question of compensation not charity.

This logic may be hard to dispute, but it seems many donors regard climate finance as aid 'business as usual' - at least for now.

The non-binding Copenhagen Accord, agreed at December's U.N. climate summit and backed by around 120 countries so far, commits developed countries to provide poorer nations with $30 billion by 2012 to tackle climate change, rising to $100 billion a year by 2020.

But with key issues - including how the money will be raised and delivered - yet to be ironed out by negotiators, rich nations are doing things their way.

Feathers were ruffled at this year's first round of U.N. climate talks in Bonn over the weekend when it emerged that Washington plans to cut climate-related aid to Bolivia and Ecuador, which have not signed up to the U.S.-brokered Copenhagen Accord.

The Washington Post reported that Bolivia, which has made its disapproval of the agreement clear, and Ecuador, which has said in writing it will not sign up, had been in line for funding under the Obama administration's climate change initiative. But after the budget for climate assistance programmes was cut by Congress, the allocation was revoked, although the decision is not yet final.

"There's funding that was agreed to as part of the Copenhagen Accord, and as a general matter, the U.S. is going to use its funds to go to countries that have indicated an interest to be part of the Accord," the Post quotes U.S. special climate envoy Todd Stern as saying.

The link between climate money and political support for the Copenhagen Accord is confirmed by an unnamed senior African diplomat who spoke to Britain's Observer newspaper.

"The pressure to back the West has been intense," said the source. "It was done at a very high level and nothing was written down. It was made very clear by the EU, UK, France and the U.S. that if they did not back them then they would suffer." The newspaper says other African diplomats tell of a similar carrot-and-stick approach.

Some developing countries are upset by this, believing they should have a bigger say in how the money is raised, allocated and spent than is the norm with traditional aid.

Talking to the Washington Post, U.S. envoy Stern said the United States is "supportive of a fund that's got balanced governance" in the long-term, but was unapologetic about who's running the show for now.

"We would see the shape of funding going forward over time being different from what occurs now," he told the paper. "But for the immediate, out-the-door money now, there's just not time to change that."

Research from the World Resources Institute shows that much of the money that has been promised between now and 2012 will come out of development assistance budgets and will be delivered through traditional bilateral and multilateral channels.

COPENHAGEN GREEN FUND

Many developing countries would prefer the climate finance to be disbursed through a new fund sitting under the umbrella of the United Nations Framework Convention on Climate Change and with equal representation of rich and poor countries.

One such mechanism already exists - the Adaptation Fund - although it is still finding its feet and has yet to disburse money for projects.

Climate activists say this fund could serve as a channel for the portion of the money in the Copenhagen Accord allocated to helping poor countries adapt to climate change. And it's a governance model that could be replicated for a broader "Copenhagen Green Climate Fund", which would include money to help developing countries limit their greenhouse gas emissions.

But such an arrangement would tip the balance away from donors, giving recipient countries more control than usual with aid. And clearly wealthy nations are not in a hurry to lose their bargaining chips when it comes to the difficult and tortuous climate negotiations.

Karl Falkenberg, director-general for environment at the European Commission, signalled earlier this year that countries that did not fully support the Copenhagen Accord may not qualify for future funds.

"If countries hesitate to commit to the Copenhagen Accord which has created this green fund then it's difficult to talk about the green fund with countries that are not clear whether they are in or out or whether they want it," he said. "We need to see a preparedness to work with the Accord."

In Bonn this weekend, Bolivia's chief delegate Pablo Solon suggested realpolitik is already kicking in. "We have received a cut of aid" from both Denmark and the United States, he told reporters. "We think they are very unfair. We think this is a way of punishing."

Reuters reports that Denmark has not in fact linked aid to acceptance of the Copenhagen Accord, but is plannning a general shift in development aid to help the poorest nations in Africa.

And one adaptation expert told AlertNet the European Union has recently made clear it does not have a policy of exempting countries that don't back the accord from receiving climate aid, realising this would not send out a good signal.

HIGH AND DRY

Another issue that's irritating the least developed countries (LDCs) is their scant representation on a high-level panel set up by the U.N. Secretary-General to mobilise the $100 billion per year of fresh funding promised by 2020.

The group of 19 experts is chaired by British Prime Minister Gordon Brown and Ethiopian Prime Minister Meles Zenawi, and includes Norway's prime minister, Guyana's president, U.S. President Barack Obama's economic policy adviser Lawrence Summers, top British academic Nicholas Stern, financier George Soros, the president of the African Development Bank and the head of the Commission of the West African Monetary Union, as well as officials from India, China, Brazil, Mexico and South Africa.

Other than Ethiopia, there are no direct representatives of the poorest countries.

"The most vulnerable countries (to climate change) are from the LDCs, so if they are not included in the high-level panel, that will not resolve the issue and it has created some sort of anger," Quamrul Chowdhury, a climate negotiator from Bangladesh, told AlertNet.

It certainly contributes to the feeling that donors aren't really looking to take a radically fresh approach to climate funding, rooted in justice rather than largesse.

That could change as talks to pin down the particulars of a new international framework for acting on climate change grind on. But it will require a sea-change in rich countries' attitudes towards those suffering the harmful effects of their carbon-profligate ways.

"The mentality they bring to this is that they are the donors, they decide what to do, beggars can't be choosers, and developing countries will just have to lump it," said Saleemul Huq, head of climate change research at the International Institute for Environment and Development. "But what they don't realise is that the climate change negotiations are not aid negotiations."

The words and actions of rich states to date suggest poorer, vulnerable nations have still got some work to do in hammering this point home.

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