Poorly coordinated pools of cash are often going to projects and countries favoured by donors rather than to the most vulnerable, finance experts say
LONDON (AlertNet) – Figuring out how to raise the $100 billion a year in climate change assistance promised to poor nations is tough enough, but spending the money fairly and effectively may prove an even bigger challenge, climate finance experts warned this week.
Early flows of money aimed at helping poor and vulnerable countries curb their emissions and adapt to the effects of climate change are bypassing many corrupt or conflict-ridden countries, experts on a panel at the London-based Overseas Development Institute (ODI) said on Tuesday.
Instead, poorly coordinated pools of cash are often going to projects backed by donors rather than projects chosen by the recipient governments, they added.
The dilemma facing funders, they said, is whether to focus on ensuring money is well used by giving it only to capable governments – which perhaps need the help less – or trying to build much-needed government capacity in worse-governed nations but at the risk of wasting funds.
“What comes first? Should we be ensuring government leadership or (awaiting) a capable government?” asked Tim Gore, a climate change policy adviser for anti-poverty charity Oxfam.
In Cambodia, for instance, he said, donor money to support climate adaptation projects has largely been routed around government institutions, seen as weak and lacking in capacity. As a result, the government is getting little chance to learn and build its capacity in handling such funds, Gore said.
Ethiopia, in turn, has received substantial funding from major donor organizations, including the Global Environment Facility, for climate change adaptation projects. But none of the projects being supported is in the National Adaptation Plan of Action that Ethiopia developed to lay out its own priorities for climate adaptation efforts, Gore said.
Climate-vulnerable countries also face a struggle to apply for adaptation funding from a wide range of donors and funds, when what is needed is a “harmonized, streamlined international system consolidated under a (single) Green Climate Fund,” he said.
Efforts by donors to ensure money is well used have resulted in a handful of at-risk countries with relatively strong government and civil society institutions getting a disproportionate share of adaptation funding, said Tom Mitchell, head of the Overseas Development Institute’s climate change program.
Bangladesh, Niger, Mozambique, Senegal and Ethiopia, for instance, have received a relatively large share of adaptation money, while conflict-riven countries in central and west Africa and in the Middle East are being avoided, he said.
“Finance is being delivered based on… the willingness of countries to engage,” he said. As a result, “we’re seeing big gaps in delivery to conflict-affected states.”
Funds flowing so far, he said, also are going disproportionately to projects backed by donors – particularly capacity building efforts – rather than to projects identified by the countries themselves as priorities, including programs to improve food security and water management and to reduce disaster risks.
With funding being diverted around governments in many cases, help is also arriving largely in the form of small, short-term, project-specific grants made by one country to another, rather than as contributions to the national budget that countries could then use to fund more integrated programs focusing on their own priorities, Mitchell said.
The demand from recipient countries that climate funding be “additional” to, or on top of, existing development aid is also creating complications, Mitchell warned. Climate adaptation and anti-poverty programs often overlap dramatically, he said, and separating climate adaptation funding to prove it is additional threatens to waste funds and create unneeded duplication.
“Addressing poverty and vulnerability has to be at the core of the adaptation agenda if we’re going to make a difference,” he said, and that means “we can’t keep highlighting the additionality/separability of that finance.”
So far, donor countries have pledged about $3 billion to $4 billion in climate adaptation finance, actually approved spending about $1 billion of that and disbursed around $350 million, Mitchell said. That spending is far short of the $30 billion in climate assistance by 2012 - balanced between adaptation and mitigation measures - that donors agreed to provide at the Copenhagen climate talks in late 2009.
Rich nations have pledged to come up with $100 billion a year by 2020 to help vulnerable countries deal with the effects of climate change and curb their own emissions, with funds expected to come from a wide range of sources, including new international taxes and government budgets.
Efforts to put together an international climate fund have so far focused largely on how to raise the money rather than how to spend it – something that now needs to change, the experts said.
Climate adaptation funding is “one of the challenges for this generation,” said Marcus Manuel, head of ODI’s Centre for Aid and Public Expenditure, which works to ensure development aid effectiveness.
“If we get it right we can make a tremendous difference. If we get it wrong, we can waste huge sums of money,” he said.
The problem, said Lisa Elges, a climate expert with Transparency International, is that “most countries that are very vulnerable to climate change are also very vulnerable to government weaknesses.”
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