Climate finance: The elephant in the room

Global transition

As the UNFCCC negotiations in Bonn wrapped up on Saturday, civil society organisations were left feeling both hopeful and cautious; nothing new there.

While we have seen positive movements around the Green Climate Fund, there is still a lack of clarity around the various elements that will make long-term climate finance both operational and effective. Looking towards a climate deal in Paris, it was clear in Bonn that climate finance was the elephant in the room. Through mentioning the various terms – ‘means of implementation’, ‘support’, ‘funding’- it is clear that developed countries are still not willing to commit the much needed finance to complete this climate agreement.

The GCF:

CAN Europe was encouraged by the convergence of countries around the initial figure called for by both the Chair of the GCF and the Executive Secretary of the UNFCCC. The sum around which they are coming to an agreement falls very short of what is need – it is a mere US$15bn – but it is a starting point. We like to call it ‘seed money’!

This fund will need to be increased consistently between now and 2020 in order to ensure that the communities and countries at most risk of climate impacts are adequately supported.

Financing climate adaptation:

Adaptation has been left out in the cold when it comes to financing climate action. It was asserted in Bonn that only 8-9% of all climate finance goes to adaptation. This is not enough. Civil society has been calling for a 50/50 balance between climate mitigation and adaptation through existing funding streams. The Adaptation Fund has been working well in channeling much needed money to developing countries but it is still severely under-resourced. Whether this funding continues through the AF or folds into the GCF (which would then manage and disperse as needed), the priority for adaptation stays the same. This should not be forgotten.

Private Finance:

Developed countries continue to speak about private sector finance more and more, particularly as they are not meeting commitments to funds pledged in 2009. Despite the private sector being looked at as the key to unlocking high amounts of money, NGOs still demand that public finance should be the cornerstone of climate finance, particularly for adaptation. If private finance is to be a tool then it is essential that the donor countries leveraging this source put in place safeguards and transparency mechanisms to ensure that private finance delivers on the commitments made for climate action. It must be just as accountable as public finance and on a needs-based approach. If private sector finance is to be a more referenced and sought out source of climate finance donor countries must ensure that it upholds and honours the needs of developing countries tackling climate change.