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Entries tagged "Green Climate Fund"

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Durban Diary: Repaying Climate Debt

November 29, 2011 ·

A major flashpoint at the UN Climate summit in Durban is how nations in the global north should deliver the money that they're supposed to give countries in the global south to support efforts to deal with climate change.

Delegates at COP17 have presented different visions of how the Global Climate Change fund will work. Photo by UNClimateChange. It's not chump change. The UN Department of Economic and Social Affairs says it will cost developing countries upwards of $1 trillion every year to address climate change in the coming years.

Many negotiators want the UN to open the doors of the Green Climate Fund created at last year's summit in Cancun. They're also debating the scale and sources of long-term finance. The U.S. government is blocking both conversations.

Instead, Washington wants the private sector to take a leading role, and for tricks like carbon trading to leverage public money by raising big bucks in the financial market. This might sound good, but it would just add another roulette wheel to the casino economy that plunged the world into the worst recession since the 1930s.

Therefore, civil society groups and developing–country governments have demanded that the Green Climate Fund not serve as yet another game room for financial speculators to gamble with public dollars. A growing movement for innovative sources of climate finance — including a tiny tax on financial transactions — has shown that money is available for global public goods like climate change programs.

Now we just have to mobilize the political will of rich countries to share the wealth. With European countries adopting austerity measures, and a U.S. Congress that barely believes that the climate is changing, that'll be an uphill, but necessary, struggle.

Will the next two weeks of climate negotiations unleash a violent storm that makes our planet uninhabitable? Or can governments come together to keep our future safe?

As the second day of climate talks are winding down, storm clouds are building again.

Janet Redman, co-director of the Sustainable Energy & Economy Network at the Institute for Policy Studies, is observing the United Nations climate talks in Durban, South Africa. www.ips-dc.org
Join the global call for climate justice by participating in 1,000 Durbans in conjunction with the December 3rd Day of Action on Climate Justice.

A Small Tax on Finance, A Giant Leap Forward for the Climate Fund

June 16, 2011 ·

This week in the German city of Bonn, climate activists turned up the heat on government officials attending the UN climate talks, calling for a tiny tax on financial speculation to help pay for the fight against global warming.

The action in the streets outside the talks, in which youth sporting green Robin Hood caps asked negotiators on their way into the meeting to put money falling from the pockets of high-rolling financiers into the Green Climate Fund, mirrored demands being made inside the summit for a financial transaction tax (FTT), also called a financial speculation tax or Robin Hood Tax. These actions are part of a growing international campaign. In a press conference during the first week of climate talks, Bolivian ambassador Pablo Solon called on countries to adopt an FTT to “generate real funds immediately.” The money is desperately needed in developing countries to adapt to a warming world and for poor-but-growing nations to reduce their own carbon emissions by investing in clean energy.

The UN pegs the price tag for developing country adaptation and greenhouse gas mitigation at around $500 to $600 billion each year in the coming decades. Failure to cut carbon pollution quickly will push costs even higher.

At a press conference in Bonn that brought together labor, youth, environment and development groups from around the world Tetteh Hormeku of the Africa Trade Network called for an FTT, a tax that economists estimate could raise up to $600 billion per annum for the just transition to sustainable economies. “In short,” Hormeku said, “we have to raise the scale of our ambition… of our finances to match the reality of the challenge that we face.”

“We are here today to urge the governments of the world to do the right thing; to impose a financial transactions tax and make the appropriate investments in a greener, cleaner economy,” added Bob Baugh, Chair of the AFL-CIO energy and environment task force and executive director of the AFL-CIO Industrial Union Council. “It is time that the financial institutions, whose reckless actions brought the economic crisis that much of the world is in today, step up and do their part; and make a positive contribution to a cleaner planet and good jobs.”

Meanwhile, the French national assembly passed a resolution supporting a Europe-wide financial transaction tax by a margin of 477 to 2. Statements made by parliamentarians and French president Nicolas Sarkozy called for some of the revenue raised to go to climate change programs.

Sarkozy has promised to make FTTs a centerpiece of the G20 meeting in France in November. On June 15, the Brazilian parliament unanimously adopted a similar resolution calling for the Brazilian government to support a broad-based FTT. In the Bundestag, German lawmakers recently held a debate on the form and function of an FTT, and all of that country’s political parties expressed their support for the idea to the EU tax commissioner.

A global day of action has been called for June 22nd to demonstrate the breadth and depth of global public support for a tax on financial speculation and to build pressure on France, Germany and other European countries to move forward in implementing an FTT. In the United States, National Nurses United and other labor allies will descend on Wall Street demanding high-rolling financiers pay their fair share for the public goods and services that are on the chopping block due to budget short falls.

The Obama administration has not supported a tax on speculation (although several bills have been introduced in Congress), and could do severe damage to the momentum for an FTT in Europe if it sends discouraging signals. Already the U.S. has repeated several times in the Bonn round of climate negotiations that it doesn’t want to talk about innovative sources of climate finance like the FTT.

Climate activists have a message for Obama and his band of merry men at the State and Treasury Departments – If you can’t lead, at least stay out of the way!

Bonn Climate Talks

June 7, 2011 ·

The Institute for Policy Studies has joined with Friends of the Earth International, Jubilee South Asia, Pan Africa Climate Justice Alliance, Third World Network, and other movements and organizations fighting for climate justice in the international policy arena at the UNFCCC intercessional talks in Bonn.

We will provide regular updates on key policy areas and issues being debated here at the climate talks — such as emissions reductions, climate finance, halting deforestation, and carbon markets, among other issues.  We invite our allies to use these updates to help inform regional and national activities, provide information for media outreach, and enhance national and regional advocacy plans. Please feel free to circulate.

Update No. 1: Bonn Climate Negotiations

The Big Picture

United Nations climate negotiations resumed in Bonn, Germany, on June 6. This session follows the slow progress made at earlier talks in Bangkok in April, and are essential for building momentum toward the Durban climate conference in November.

The Bangkok talks were focused on setting the agenda for the negotiations for the rest of the year and were setback by divisions between countries over the scope of international climate talks. In Bangkok, some rich developed countries insisted on limiting the negotiations to implementing the narrow range of issues agreed at Cancun; in contrast most countries supported continuing under an agreed workplan from 2007 (the Bali Action Plan).[1]

The Bonn talks are to be based on the broad agenda advocated by most countries in Bangkok, but the clash in the "paradigm" for the negotiations will underline further disagreements in Bonn. These fault-lines include:

  • Setting binding emissions reduction targets through the Kyoto Protocol
  • Insufficient emissions reduction targets currently on the table
  • The Green Climate Fund

1. Setting new binding emission reduction targets in 2011?

The Kyoto Protocol represents the current model of international climate law – it requires developed countries to set binding emission reduction targets and to meet them over a 5 year period. The first five-year period ends in 2012 and time is running out to agree on targets for the next ‘commitment period’ (2013-2017/2020) in accordance with the mandated negotiations, which have been running since 2005.

Developing countries, particularly the Africa Group, have made clear that a continuation of the Kyoto Protocol is essential, as it provides a paradigm of legally binding emission reduction targets. Some developed countries, including Russia and Japan, have indicated they will walk away from their international legal obligations to agree commitments for the period after 2012. The United States is similarly opposed to binding emissions reduction targets. Instead of negotiating science-based targets reflecting their fair share of the global effort, they are now proposing a “pledge-based” system in which each country does whatever it determines domestically.

Bonn represents a pivotal moment for the future of the Kyoto Protocol. The Bonn climate talks need to pave the way for agreement in Durban on the next phase of legally binding emission reduction targets. Durban is the last chance to agree, as the first phase of commitments ends in 2012. If there is no agreement in Durban, the world may be faced with climate anarchy, without an international regime in place.

2. Will those new pledges be enough?

The latest science shows that negotiators at Bonn will be out of touch with what the latest science clearly requires if the world is to avert dangerous climate change. The current pledges risk warming of 2.5 to 5 degrees according to the United Nations Environment Programme. The problems with developed countries’ proposed targets are manifold: they are too low to meet what the science requires but they are also accompanied by ‘creative accounting’ proposals which result in emissions reductions only on paper. Furthermore the extensive use of offsets will see rich countries shift the burden for reducing emissions to developing countries – while doing almost nothing at home.

Analysis revealed in Bangkok showed that when emission reductions were converted into gross amounts – rather than percentages – it was clear that developing countries’ pledges for emission reductions were even higher than those from developed countries (3.6 Gigatonnes to occur in developing countries with only 1.9 Gigatonnes to occur in developed countries).[2] Together, these pledges fell well short of the 14+ Gigatonnes the UN says is necessary to be on path to remain below 2 or 1.5 degrees C.

In addition, the emissions reduction targets proposed by developed countries are ridden with loopholes. The rules currently being considered do not take into account emissions from shipping and aviation, overestimate emissions reductions by forests and land use in developed countries and allow the carry-over of unused pollution permits and offset credits . This means that the total emission of developed countries could actually increase even if their ‘official’ targets say they are making reductions.[3]

The debate over these rules, how they shift the burden of reducing emissions to developing countries and whether they are in line with the science will be of central importance in Bonn – particularly as the agenda sets particular time for addressing this issue.[4]

3. Creating a "Green Climate Fund"

In Cancun, one of the few areas of agreement was the establishment of a "Green Climate Fund" (GCF) to oversee the collection and disbursement of "climate finance." Currently the details of the GCF are being negotiated by a ‘Transitional Committee’ (TC) which has already met in Mexico in April and again in Bonn from May 30.

Flashpoint issues in the negotiations of the GCF have already included the role of the World Bank as its trustee, given concerns regarding its potential conflicts of interest due to its role in financing fossil-fuel based projects, and its practice of mixing roles as a banker, financial advisor and project implementer (known as the "Arthur Anderson syndrome" following the financial crisis). This conflict may be compounded by proposals relating to secondments and staffing of the new fund, which draw heavily on the World Bank as a source.

Similarly, many observers are concerned that the process of the GCF is off-track. It is currently heavily focused on technicalities and structure – without having agreed to what the priorities of the fund should be or the actual scale of public funding. In Cancun, countries agreed to a "goal" to "mobilize" $100 billion by 2020 from “a wide variety of sources”. However, developed countries are yet to commit to any specific level of public funding.

A further critical question here is what a "balanced" allocation of finance between adaptation and mitigation really means.[5] It is to be expected at Bonn that developing countries, who are the most vulnerable to climate impacts, will push the GCF to identify the needs and priorities of recipients before designing structures to best meet those needs.

Finally there is concern that the GCF is too focused on "private finance" options (through loan guarantees, publicly-provided insurance, or other risk sharing instruments) and thus risks putting too much power into the hands of profit-driven interests. Market failures and distortions by private interests are a significant structural cause of the climate crisis and many countries fear a continued focus on the private market could have the effect of financing projects that are ineffective at confronting climate change but are very effective at transferring public monies into private coffers. These countries and observers will be pushing for the GCF to be primarily funded through public sources (including innovative mechanisms such as Special Drawing Rights and the "Robin Hood Tax").

 

[1] See recent affirmation of the importance of the Bali Action Plan and the Kyoto Protocol at the India-Africa forum, 25 May 2011, (para 7), http://pib.nic.in/newsite/erelease.aspx?relid=72319

[2] Stockholm Environment Institute, “The Implications of International Greenhouse Gas Offsets on Global Climate Mitigation” (March 2011), www.sei-us.org/Publications_PDF/SEI-WorkingPaperUS-1106.pdf

[3] Stockholm Environment Institute, “Assessing the current level of pledges & scale of emission reductions by Annex I Parties in aggregate, AWG-KP In Session Workshop, Bonn, 2. August 2010; and, Kartha, S. “How Accounting Tricks, Loopholes, and Strategic Carbon Banking Could Negate Developed Countries’ Copenhagen Pledges”, Tellus Institute Brown Bag Lunch Series, 10 November 2010.

[4] On Thursday 9 June 2011 according to preliminary schedule.

[5] This is a reference to the objective of the fund from the Cancun outcome document – see Annex III of 1/CP.16, http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=2.

World Bank Doesn't Belong at the Green Climate Fund's Drawing Table

April 5, 2011 ·

The UN climate talks held in Cancun late last year paved the way for a new Green Climate Fund to channel money for developing countries to build resiliency, protect forests, and bring low-carbon technologies and practices into mainstream use.

That marked a critical victory for developing countries, but the biggest fights have yet to come. In the coming year, a committee of 40 government representatives (25 from developing and 15 from developed countries) will be working furiously with the UN and other institutions, as well as finance, gender, community participation, and other experts, on making this fund a reality. They must do everything from creating a management structure to forging a global definition of "clean energy."

This ambitious task is meant to result in a Green Climate Fund that can handle the tens, if not hundreds, of billions of dollars a year developing countries will need in the coming decades to combat climate change and at the same time continue their fight against poverty.

It's fundamentally disturbing, however, that the World Bank — the planet’s leading cheerleader for a growth-without-limits development paradigm — is elbowing its way to the front of the line to help design the new fund, almost guaranteeing itself a permanent role in its management.

More than 90 environment, development, human rights, and anti-debt organizations from around the world conveyed this concern in a letter to the Secretary of the UN Framework Convention on Climate Change (UNFCCC) and the convener of the first fund design meeting.

In the letter, civil society leaders called for strictly limiting the World Bank's role in the design on the Green Climate Fund for the following reasons:

First and foremost, the World Bank continues to finance dirty coal, oil and gas projects. According to a World Bank Group Energy Sector Financing Update prepared by the Bank Information Center, the global lender supported fossil fuel projects to the tune of $6.6 billion in 2010, a 116 percent increase from the year before. That included $4.4 billion for coal power projects, more than it spent on all new renewable energy and energy efficiency projects combined for the year ($3.4 billion). So while the World Bank is undeniably increasing it renewable energy financing, the volume is still dwarfed by its fossil fuel lending.

Bobby Peek, director of groundWork/Friends of the Earth South Africa, an environmental justice group in Durban, South Africa, that endorsed the NGO letter, noted, “Only a year ago the World Bank made its largest loan ever to dirty energy, signing $3.75 billion over to the Eskom energy company to build a 4,800MW coal-fired power station in South Africa.” He asked, “Is this the institution we want to put in charge funding the solutions to the climate crisis?”

Bank officials say that the Eskom power plant — and similar coal projects in other countries — are important for bringing access to electricity for energy-poor families. But environmentalists and local activists argue that the project will benefit large mines and smelters, not the local community.

In fact, in an independent review of the Bank’s 26 fossil fuel loans in 2009 and 2010, Oil Change International found that none of these clearly identify access for the poor as a direct target of the project. The Bank agreed that not a single coal or oil project could be classified as improving energy access.

To the World Bank’s credit, it may be about to change course to a degree. A leaked draft of its new 10-year energy strategy revealed plans to move away from supporting new coal projects in middle-income countries. But environment and development groups argue that the language used in that draft document is riddled with loopholes. The energy plan also includes a massive scale-up of hydropower mega-dams that threaten to displace communities, destroy fisheries, and release their own greenhouse gases.

The Green Climate Fund should remain fully independent from the World Bank. Its design committee should engage experts from UN agencies and all regions of the world. Experts on gender, sustainable development, poverty alleviation, renewable energy and efficiency technologies, indigenous peoples, human rights, and social and environmental safeguards should weigh in, too.

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