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Entries tagged "Green Climate Fund"Page Previous 1 • 2 • 3 Next
February 12, 2013 · By Janet Redman
Europe has taken a bold leap forward to implement an innovative plan that could help protect people and the planet. Poised to set an example of climate leadership for the developed world, will countries like the United States come along?
At the end of January European Union finance ministers approved a proposal by eleven EU member states to implement a coordinated financial transaction tax (FTT) — a tiny tax on trades of stocks, bonds, and derivatives. Through a process known as “enhanced cooperation,” this subset of EU countries (dubbed the EU11) was able to move forward with a common tax policy without having to include all 27 EU member states. The European Parliament gave the proposal a green light in December 2012, and the EU Council waved it forward at their meeting last month without a vote because of overwhelming support among member states.
EU tax commissioner and FTT proponent Algirdas Šemeta called it "a major milestone.”
The next step in making the FTT proposal a reality is for the eleven member states in the “coalition of the willing” to agree to details of the common tax. Negotiations are expected to wrap up and a formal agreement officially approved by the European Parliament in 2013.
The implications are potentially huge for climate finance. That’s the money that communities in developing countries need to make the transition from climate-vulnerable to climate-resilient, and from dirty energy development to low-carbon development.
The cost of that shift is measured in the hundreds of billions (some say trillions) of dollars. Rich industrialized countries have promised to deliver $100 billion a year by 2020. A fraction of what’s needed, but still a big lift compared to today’s levels of around $10 billion a year (if you count generously).
At the tax rate originally proposed by the EU Commission of a harmonized minimum 0.1 percent for stocks and bonds and 0.01 percent on derivatives, the EU11 FTT has the potential to raise up to €37 billion (nearly $50 billion in US dollars) every year.
France, which implemented a financial transaction tax in August 2012, has already made a commitment to direct 10 percent of the tax revenue to global public goods like development, health, and climate change (3.7 percent is destined for the Green Climate Fund). Members of Germany’s Social Democrat party have made general political murmurs that if they succeed in upcoming elections they will send revenue from an FTT to development to help meet the country’s 0.7 percent ODA goal.
Global campaigners are pushing the EU11 to be ambitious in targeting a significant portion of their FTT revenue to fight climate chaos. Members of the Pan African Climate Justice Alliance used the recent 2012 global climate summit to call for the eleven countries to deposit 25 percent of the money raised into the Green Climate Fund. Representatives in the EU parliament and from developing countries are also calling for FTT revenue to be used by developed countries to meet their mid-term and long-term financing obligations.
With Timothy Geithner stepping down as Secretary of Treasury there’s renewed optimism that the Obama administration might support an FTT under Jack Lew’s leadership of the Department. Supporters of the tax are planning to raise the issue at Lew’s confirmation hearing in Washington DC tomorrow.
This would be a move that experts like Joseph Stiglitz endorse, who said, “as Mr. Obama’s second term begins, we must all face the fact that our country cannot quickly, meaningfully recover without policies that directly address inequality. What’s needed is… a more progressive tax system and a tax on financial speculation.”
An FTT that raises revenue for a fund that supports developing countries in dealing with the disproportionate impacts visited upon them by climate change is an important step in fighting global inequality. Here, the EU11 can be a global leader.
 The 11 EU member states that have entered into enhanced cooperation are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Any other member state may join the enhanced cooperation if they wish.
December 6, 2012 · By Janet Redman
While the costs of mitigating and adapting to climate change rise and thus the need for climate finance in developing countries grows, wealthy governments shift focus from public support to private finance. But can the private sector meet the needs of those most impacted by climate change?
In the halls of the UN climate negotiations in Doha, Qatar, you will hear a mantra that’s being echoed by developed country governments from their capital cities to international forums. It goes something like this: We’re broke. There’s no public money. And so, we have to use the scarce resources we do have to leverage massive wealth in the private — and particularly the financial — sector.
You’ll also find in the halls of the annual climate summits the faces of private interests — industry reps, investors, and carbon traders. They’re a regular fixture here, but this year the private sector has taken centre stage in debates over climate finance.
At COP18 there are seven times as many side events about getting private finance and carbon markets engaged in climate action as events highlighting the role of public funds.
There has also been a strategic shift in the rhetoric of developed countries away from talking about “providing” climate finance to speaking about “mobilising” money. The former implies public flows. The latter suggests countries are shifting emphasis toward looking outside national budgets for financial resources.
Nowhere is the trend toward privileging the private sector more apparent than in the Green Climate Fund (GCF) — the newest financial institution under the climate Convention. After many contentious debates during the Fund’s design phase, industrialised nations succeeded in creating a sub-fund that guarantees the private sector direct access to the fund.
Countries did win one concession — a ‘no-objection procedure’ that is meant to keep multinational corporations and international investment banks from going directly to the Green Climate Fund to undertake work in countries without the knowledge of national capitals. But investors are already starting to push back, saying that any kind of vetting process by the UN would make private sector engagement untenable.
In light of these challenges, the GCF’s board will have to grapple as they write the Fund’s business model this year with the question of what the ultimate purpose of the Green Climate Fund is — to maximise the involvement of the private sector, or to support low-carbon, climate-resilient sustainable development in poorer nations as its mandate states?
While these two aims don’t have to be mutually exclusive, lessons from existing private sector institutions – like the World Bank’s International Finance Corporation – show that private finance often bypasses low-income countries, fails to reach the poor in middle-income countries, and prioritises large corporations over small and medium enterprises.
In addition, the use of financial intermediaries to repackage and channel capital leads to serious challenges in transparency and public accountability. Particularly important is the fact that private sector money flows where the profit potential is greatest. For a climate fund this means big, mainly mitigation activities — not community-scale projects, adaptation, or disaster relief.
Certainly, the private sector plays a critical role in any economy – and without its participation in making the shift away from dirty energy and polluting industry there will be no transition to a low-carbon future. But the private sector efforts that the Green Climate Fund should support are domestic enterprises that will reinvest wealth to meet the climate priorities of the people and communities most impacted by global warming.
December 1, 2012 · By Janet Redman
The 2012 UN climate negotiations are not expected to be a breakthrough moment in solving the unfolding ecological crisis, but these talks will set the course for a future deal that countries have agreed will enter into force by 2020.
What’s at stake is more than a little overwhelming.
Global warming has to be kept to less than 2 degrees Celsius above pre-industrial temperatures if we want to avert climate disaster. Scientists say that means we can send 565 more gigatons of carbon dioxide into the atmosphere. Meanwhile fossil fuel companies are planning to burn enough oil, coal and gas to release 2,795 gigatons.
And the impacts of a warming planet are already hitting home. Because of sea level rise the island nation of Kiribati in the Pacific Ocean is in negotiations to resettle its entire population in Fiji. And in the United States we’ve just experienced a summer of record-busting heat waves followed by a super-storm the likes of which meteorologists have literally never before seen.
From where I sit in Doha, however, any agreement to avoid predicted extremes in weather, economic disruption and loss of life that will accompany global warming looks a long way off.
According to the Intergovernmental Panel on Climate Change — the experts group that provides the climate convention with the latest science — global greenhouse gas emissions would have to peak and start coming down by 2015. That’s right — in three years. Then, by 2050, the nations of the world would need to halve their overall climate pollution.
For the United States that translates into something like a 50 percent reduction by 2020 and deeper than 80 percent cuts by 2050 — a quasi-political calculation based on our responsibility as far and away the greatest contributor to climate change and one of the economies most capable of adapting.
Delivering serious emissions cuts won’t be easy for any country. Re-orienting a nation’s infrastructure to be climate smart — from energy to food to manufacturing to transportation — won’t be cheap.
Not surprisingly, no country wants to be the only one — or one of only a few — that is obliged to overhaul its entire economy to be low-carbon and climate resilient. It would put them at a distinct competitive disadvantage, at least at first (of course, every dollar spent on prevention saves three in disaster cleanup later).
And so the two largest economies and biggest polluters on the planet — the United States and China — have somewhat cleverly staked out positions that set them on the dangerous path of Mutually Assured Inaction. Neither of them will act on climate until the other does — but neither of them really wants to anyway.
The U.S. climate team said in no uncertain terms before leaving Washington DC for Doha that a second Obama term doesn’t translate into a shift away from blocking a climate deal that big countries like China are not legally bound by.
Lead negotiator Jonathon Pershing has repeatedly insisted that he can’t bring home a deal he can’t sell to Congress — and unfortunately Congress is still in the pocket of polluters (look no further for evidence than a recent letter to President Obama from 18 Senators who accepted more than $11 million from dirty energy companies urging him to approve the Keystone XL pipeline and unlock the Canadian tar sands).
At the end of the first week of negotiations, with a fair and effective climate deal looking out of reach, it’s hard to see how developing countries — or civil society — can compel the industrial world to take bold action and live up to their responsibilities.
December 9, 2011 · By Janet Redman
It’s 2:30pm in Durban, South Africa, and I’m rushing back and forth from meeting to meeting in the convention center waiting for the final plenaries of the UN climate negotiations to start.
There’s a particular arc to the climate negotiations I’ve noticed – at least in the last five that I’ve attended. The first week is a lot of meetings with government delegations to discuss the issues we’ve been following all year, meetings with our colleagues to figure out our strategy for getting what we want out of the climate talks. NGOs release their reports, advocacy groups try to crank out suggestions for countries’ to introduce in the official negotiating sessions. There are lots of side events, panel discussion, receptions with free wine and eats.
In the second week there’s a bit of a lull, the doors on government meetings swing shut on most conversations and we’re left waiting outside meeting room doors trying get a scrap of paper here and a snippet of intelligence from a friendly government there.
By midway through the second week the high level ministers start arriving. Security gets tighter. Actions by youth, indigenous people, activist groups pop up here and there and are quickly shut down by the UN secretariat. Generally there are marches ‘outside’ that very few on the ‘inside’ even hear about (the exception was, of course, the demonstration by hundreds of thousands of people in Copenhagen in 2009).
By the time you reach the end of the second week, there’s a palpable sense of frenzy in the air. People are running back and forth in the halls waiting for some thing to happen. Anything.
But you wait.
And you wait. And you wait. And you wait.
Eventually, after all the deals have been struck behind close doors, poor countries have sold their future for a handful of magic beans, and the US is duly satisfied that nothing agreed upon will upset its position at the top of the economic food chain, the negotiations resume.
Then governments make statements, deliberate various versions of draft decisions, and release a significant amount of hot air until around 2am. In a final crescendo, countries start lining up like well behaved infantry ready to get behind any solution that brings an end to the talks so they can get the hell out of here and go to bed.
And then that’s it. We go back to our hotels exhausted wondering why our governments won’t take the climate crisis seriously enough to do anything meaningful to stop it. We try to convince ourselves that there are ‘hooks’ all over the decision taken that will help us reduce greenhouse gas emissions either at home or multilaterally, or that there’s way to use the final outcome to raise some money for those communities who are already reeling from drought, floods, landslides, heat waves, wild fires, and sea level rise.
So that’s where I am right now. Sitting on the floor, tied to an electrical outlet to power my computer, waiting for the plenary doors to open, and wondering if my government – or any of the other governments present here – will do anything of consequence to make sure our future is one of ecological stability instead of planetary chaos.
December 6, 2011 · By Janet Redman
As UN climate negotiations in Durban, South Africa, go into their final week, IPS got a quick update from Janet Redman, co-director of IPS’s Sustainable Energy & Economy Network, who is in Durban at talks.
Janet spoke to us from the corner of a crowded conference room at the summit about the current state of the negotiations:
Interviewer: It’s recently been announced that 2010 saw the most dramatic upswing in greenhouse gas output on record. How are folks in Durban reacting to this?
Janet Redman: Greenhouse gas emissions rose between 2009 and 2010 by a record-breaking 6 percent in one year. There’s a real sense of urgency here in Durban because of the news that emissions are growing at such an alarming rate.
But unfortunately that sense of urgency is not translating to action by the biggest historical polluters here.
In particular, what’s happened this week is a blame game that’s now shifted to the big developing countries. Developing economies still have incredibly high rates of poverty, even in countries that are considered “emerging economies” such as India and China. The EU and the U.S. are pegging the potential failure to reach a climate deal here in Durban on those two countries.
But we don’t need a new deal – or what some are calling a new mandate. What we really need out of this next week is to see countries agree to a second commitment period of the Kyoto Protocol, and to see a completion of the Bali action plan, which was a set of commitments and obligations that developing countries said they would take on with the support of developed countries and a commitment by the United States to take actions comparable to those of other wealthy northern countries. This was the compromise world leaders struck because the U.S. said it would never, ever sign the Kyoto Protocol.
The big news is that if developed countries are willing to agree to fulfill their own obligations that already exist in the convention and in this Bali action plan, then developing countries are considering negotiating internationally-binding activities that could take effect in 2020. That’s a pretty big deal. So basically, China’s already doing more than the U.S. is on renewable energy, but they’re even saying, we’re willing to take on binding commitments in the near future, as long as you show us good faith that you’re willing to do what you said you would do in Bali in 2007.
Interviewer: It sounds like there’s a lot of discussion on just renewing what’s already been agreed upon. Do you think that renewing or approving these already-negotiated terms would be enough?
JR: Well, in some sense it’s a first step toward a bigger change. One of the things that we’re hearing here is a call for a new mandate. I think that’s a real mistake because there are two existing mandates right now.
Again, the Kyoto Protocol is one mandate, and the Bali action plan is another mandate. The convention has set that up very clearly, so the idea of asking for a new mandate here in Durban actually undermines existing commitments that are science-based that have been agreed to already in the past 20 years since the UN Framework Convention on Climate Change was established.
So I think having movement on agreements would be enough to set the negotiations on a really positive track for subsequent periods after the second period of the Kyoto Protocol, but also on a positive track in terms of implementing the convention which of course is what this is all about.
Interviewer: There’s been discussion on possible threats to climate financing for developing countries. Are there any further observations that you’d like to share about that?
JR: Last week we were really concerned about the U.S. obstructing talks on opening the doors of the Green Climate Fund. As of earlier today, it looks like almost every country is satisfied with moving forward on the Fund, and building the Board that will put more meat on the bones of the GCF over the next year.
What’s still incredibly frightening is the blatant cooptation of the Green Climate Fund by the private sector, with unabashed support from the U.S. and the UK. If the financial sector and multinational corporations have direct access to the Fund and can bypass sovereign national governments, then we have a real potential for serious problems with democratic control, transparency, the application of social and environmental safeguards and basic standards, and the Fund’s effectiveness in achieving climate goals.
Finally, even if we get the Fund here in Durban it may be nothing more than an empty shell. The U.S. is still blocking a conversation on long term finance – both the scale that should be delivered on and the sources of where that money should come from. A text released last night did mention innovative sources of finance, but an outcome here in Durban needs to be much more specific about how countries will make that real. One thing they can do right now is commit to a work plan for implementing some of the leading proposals, such as a financial transaction tax.
Interviewer: Thanks very much for taking the time to talk to me, Janet!
JR: Thank you!