Eight Unmet Promises: the Climate Finance Fiasco

Despite lavish promises in 2009, with over US$30 billion pledged to help mitigate climate change in developing countries, a shameful 20 percent of that amount is all that has been turned into action on the ground.

London, 27 November 2012. The most detailed analysis to date of how well rich nations have kept promises to provide poorer ones with funds to tackle climate change issues was published today. The research concludes that rich countries have collectively and comprehensively failed to fulfil eight substantive pledges. Published by the International Institute for Environment and Development (IIED) — the study comes as countries prepare for the latest round of intergovernmental climate-change negotiations, which begin next week in Doha.

Saleemul Huq: Injection of goodwill needed 
The wealthier nations promised in 2009 to provide developing countries with US$30 billion by the end of 2012, and said this should be “new and additional” finance balanced between support for adaptation and mitigation activities. The donor nations made additional pledges about transparency, governance and the need to help the most vulnerable nations first.
But so far, only US$23.6 billion of the US$30 billion promised has been committed. And only 20 percent of the fast start finance has been allocated to projects that will help poor nations adapt to a changing climate. Less than half of the fast start finance is in the form of grants, with the rest is loans, which means poor countries must repay with interest the costs of adapting to a problem they have not caused.

Also, rich nations have not provided enough transparent information to prove that their contributions are really new and not just diverted from existing aid budgets, says the report. To examine transparency in more detail, the researchers evaluated donor nations across 24 measures. On the resulting scorecard, no donor nation scored more than 67 percent.
“Without transparency about how and when rich countries will meet their climate finance pledges, developing countries are left unable to plan to adequately address and respond to climate change,” says co-author Timmons Roberts of Brown University in the United States, whose Climate and Development Lab led the research.

David Ciplet, also of Brown University, adds: “Only two of the ten donors we assessed are delivering their fair share of climate finance, based on their ability to pay and how much they have contributed to climate change through emitting greenhouse gases in recent decades.”

On these measures, Norway has performed best, providing five times its fair share. At the other end of the scale, both Iceland and the United States contributed less than half their fair share. The broken promises will make it harder for developing countries to take seriously what richer nations say at the UN climate change talks, which take place in Doha, Qatar from 26 November to 7 December.

One way to restore trust would be for rich countries to channel their climate finance through funds that the UN Framework Convention on Climate Change set up as they have a governance structure with equal representation from developed and developing nations. Also critical will be to fulfil the US$30 billion promise by the end of the calendar year, and to ensure that this money is delivered to support projects in a timely manner.

This is something that, in 2010, all rich countries agreed should be a feature of funds through which they channel their climate finance. Yet, so far, rich nations have channelled only two per cent of the climate finance through these UNFCCC funds.

The poor track record of rich nations in meeting their fast start finance pledges has raised serious concerns that these countries will also renege on their bigger promise to ensure that US$100 billion flows to developing nations each year by 2020 to help them to respond to climate change.
“With trust in short supply, and little time to negotiate a global response to climate change, the UN talks need an injection of goodwill,” says Saleemul Huq of IIED. “The rich nations can provide this by making good on their past promises and showing poorer nations that they are serious about working together to tackle this global challenge.”

(Source: IIED Press Release)

Read related articles:

Green Disc 2012: Sustainable Development Solutions for All (this is an info kit on mitigation and adaptation strategies produced by the The UNCSD Small Island Developing States Partnership in New Sustainable Technologies