Climate finance: The Gordian Knot in the puzzle
L-RL The impact lingers under capacity constraint . Bangladesh suffers more of natural disasters under climate change impact
Climate finance is the most crucial issue in the climate negotiations. The basic principles of climate finance, such as `new and additional,' `adequate,' `predictable,' etc. are agreed upon by the Parties. But these principles are far from being operational. Basically, there are three aspects to this issue: a) supply side, b) demand side and c) governance of finance, which combines the two. The supply side relates to sources of mobilisation and the amount needed to address both mitigation and adaptation. The World Bank has estimated that: “In developing countries mitigation could cost $140 to $175 billion a year over the next 20 years (with associated financing needs of $265 to $565 billion).” For adaptation, the Bank estimates the costs to developing countries at $75 billion to $100 billion a year. Few other studies argue that these are underestimates, as the Bank did not consider all sectors and losses from extreme weather events. The money disbursed so far is wholly inadequate. Reports suggest that the majority of $30 billion fast-start-finance is repackaged money from overseas development aid, simply relabeled as climate finance. This is the reason Bangladesh has proposed to establish a system of finance registry under the United Nations Framework Convention on Climate Change (UNFCCC) with transparency and accountability in tracking the donor pledges and their delivery. In any case, the industrial countries have pledged to mobilize $100 billion as long-term finance by 2020. In the Panama discussions, annex 1 countries (A1Cs) were extremely reluctant to discuss sources of long term finance, or the initial capitalisation of the Green Climate Fund. But under pressure from the non-annex 1 countries (NA1Cs), some countries, such as the EU, Australia, and a few others have made submissions regarding this. The US is against discussing sources at the UNFCCC meetings. Similarly the BASIC countries', recent meeting (31 October 01 November 2011) failed to mention any sources of financing for the Green Climate Fund. On the demand side, Bangladesh has proposed that a vulnerability index be developed, so that the limited resources can be distributed equitably among the vulnerable countries on a priority basis. There are few existing models that assess national vulnerability, in all of which Bangladesh has been characterised as one of the most vulnerable countries (MVCs). At present there is much controversy surrounding the development of these indicators within the negotiating block known as the G77+China. Bangladesh insists that equal allocations, as in the case of budget for least developed countries (LDC) NAPA preparation, irrespective of the size of population or land area of a country, cannot be considered fair! The UNFCCC NAPA Guideline puts at the top the criteria loss of lives and livelihoods for selection of NAPA projects. It may be recalled that the very first principle of the Rio Declaration stipulates putting people at the center of all development activities. Governance of finance in Bangladesh is checked by it being a member of the 40-member Transitional Committee (TC), which operates the newly established Green Climate Fund (GCF). But four meetings of the TC have not led to an agreed design document, mainly because of the US and Saudi Arabia's opposition. The experience shows that it took 6-8 years to streamline the climate regime funds. So, there was serious apprehension that the new GCF may drag the negotiations again for years without delivery of `adequate, predictable, new and additional finance,' as stipulated in the Cancun Agreements. Besides, experience shows that absolutely little amount of climate finance is channeled through the three climate regime funds. So, the question is: where is the tradeoff between a democratically-governed financial mechanism with peanuts, and the donor-driven funds with huge money? The impacted communities don't differentiate between money coming from varied sources! It must be stressed that international funding for adaptation is not charity, but is based on moral and ethical obligations grounded in justice principles. The ideas of compensatory justice in view of the threat of climate change being a human and global security issue are grounded on the notion of harm and violation of development rights of impacted peoples due to climate change.
For all latest news, follow The Daily Star's Google News channel.
Comments