Direkt från COP20, Lima: Fast money, slow talks
Climate negotiators may not have much in common with bankers, but they are no strangers to discussing large figures of money. One of the hot topics in Lima is money coming from developed countries and used for climate measures in developing countries, what is known as climate finance. The point is that the developed countries should contribute to curbing the emissions of developing countries, which constitute more than half of the global emissions and are growing. They should also contribute to the costs of adapting to climate change in developing countries. Both because the developed countries are richer and emit more per capita than the developing countries, but also because they are responsible for a lot of the historical emissions which are causing climate change today. The figures are large: at COP15 in Copenhagen the developed countries agreed to mobilise 100 billion US dollars by 2020. The last seven years has climate finance moved up on the agenda in the negotiations, and is now an issue which may block the negotiations.
The Green Climate Fund
The most divisive issue is the money pledged by industrialised countries to the Green Climate Fund. The Fund is a newly created institution which is supposed to start funding mitigation, adaptation and forest projects in developing countries already next year. Its governing body has equal representation of industrialised and developing countries, giving the developing more influence over how to spend the Fund’s money compared to the World Bank or bilateral climate finance. During the autumn, the industrialised countries have pledged a total of 10 billion dollars to the fund, thus meeting the target set by UNFCCC Executive Secretary Christiana Figueres. The funds will flow to the Fund over the next four years. The US is the largest contributor with 3 billion dollars, while Sweden will contribute 4 billion SEK. Yet, many developing country negotiators are not clapping their hands. They argue that the industrialised countries should come up with 15 billion, and that most of the money were already promised as climate finance. The industrialised country negotiators are on the other hand displeased that they do not get any credit when they for once meet a target. They provided the money with the expectation that providing funds would send a positive signal to the negotiations. So the negotiators still spend time discussing whether to welcome or just recognise the funding pledged to the Fund.
Public and private finance
Nonetheless will the money in the Fund only constitute a small part of the 100 billion. In Copenhagen the countries agreed that the 100 billion shall include both public and private finance, and multilateral as well as bilateral funding. In Lima practically everybody says that private funding is a good thing. Yet they disagree to which degree it shall count towards the 100 billion target. Private climate finance already constitutes more than 90 billion dollars, but most of these are investments in mitigation made for profit. Consequently, they do not solve the poorest and most vulnerable countries’ need for adaptation support, and if all of the private finance is counted towards the 100 billion target, the industrialised countries will not have to provide much public finance. The developing countries want more public finance from the industrialised countries to meet their mitigation and adaptation needs, and prefer that as much of this funding as possible flows through the Fund. Most industrialised countries feel that they have stretched themselves when providing money for the Fund. Although both groups have internal divisions regarding climate finance, they are more united than regarding other issues in the negotiations. So climate finance will continue to be a hot topic next year. The good news is that the climate finance is flowing.
Jakob Skovgaard, Statsvetenskapliga institutionen Lunds universitet