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Six international development banks will test a joint process to report on their funding for climate change adaptation
By Megan Rowling
The African Development Bank (AfDB) says it and five other multilateral banks have settled on a joint process to report on their funding for climate change adaptation.
This is significant, because researchers have complained for some time that it’s almost impossible to know how much is being spent on helping vulnerable countries adjust to more extreme weather and rising seas because there is no common system for recording climate aid.
At a workshop at last week’s U.N. climate talks in Bonn, the six banks agreed on a definition of adaptation and the principles of the joint methodology they will use to account for and allocate adaptation finance.
They now plan to test this methodology and make it public by this year’s annual U.N. climate conference, which kicks off in late November in Qatar.
Besides the AfDB, the participating institutions are the World Bank, the Asian Development Bank , the European Investment Bank, the Inter-American Development Bank and the European Bank for Reconstruction and Development.
“Having a joint ... methodology for tracking aid spending that contributes to climate change adaptation means the multilateral development banks and development partners can engage in substantive analysis of climate finance,” Mafalda Duarte, the AfDB’s chief climate change specialist said in a statement.
“We will be better able to measure, report and verify climate financial flows and the results they support,” she said.
The move will go at least some way towards appeasing climate finance experts.
They have stepped up calls for a unified reporting system since rich countries pledged in 2009 to mobilise a sum approaching $30 billion to help poorer nations tackle climate change between 2010 and 2012 (money known as ‘fast start finance’), rising to $100 billion a year by 2020.
FAST-START FOG
Earlier this month, the World Resources Institute (WRI) and Overseas Development Institute (ODI) published working papers examining the fast-start contributions of Britain and the United States - £1.06 billion ($1.64 billion) and $5.1 billion respectively.
On the bright side, the researchers found an increase from climate spending in previous years - a more than four-fold rise in the case of Britain’s annual funding for climate objectives.
But they say both Washington and London are counting in their fast-start donations projects and programmes they were already supporting before 2010, meaning not all the resources are “new and additional” as promised.
The United States, for example, is including its contribution to the Montreal Protocol Fund to help developing countries phase out ozone-depleting substances, which it has backed since the early 1990s. Both countries are counting their financing for the Climate Investment Funds, pledged before the fast-start period began.
To make matters worse, the approach isn’t consistent. Japan tags leveraged private finance as fast-start money, whereas Britain and the U.S. count only public finance. The U.S. includes export credit but the UK doesn’t.
As a result, the self-reported contributions of each country are not directly comparable, the WRI and ODI researchers say.
“This strengthens the case we and other commentators have made for clear and compatible definitions and systems to track climate finance in support of a meaningful assessment of delivery on climate finance pledges,” they write in a blog on their findings.
It’s also difficult to know how much money has actually been received by governments and other organisations in developing countries, they add.
As well as better information from rich country donors on this, they urge comprehensive and frequent reporting by the multilateral institutions that manage large volumes of climate funding, including the development banks. So far, their disbursement reporting practices have been “mixed”, they note.
If the new reporting initiative just launched by the main international development banks puts in place the building blocks for a clearer and more transparent system, then it could go some way towards rebuilding developing countries’ confidence in climate finance.
Some poorer, vulnerable states say they have received little or nothing so far; nearly all say it is not enough. Knowing how much is flowing from which donors to where will help clear the fog, and provide a sounder basis for working out effective ways of raising more money in the coming years.
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