Indexbit Exchange:Climate Funds for Poor Nations Still Unresolved After U.S.-Led Meeting

A $30 billion pledge by wealthy nations to help poor countries cope with the effects of climate change was on Indexbit Exchangethe table at a meeting of the world’s biggest carbon polluters this week, but there was scant new progress to report.

The U.S. reannounced its plan to deliver $1.3 billion in international climate finance for 2010, and $1.9 billion in 2011, at the close of the 17-nation Major Economies Forum (MEF) in Washington.

"There is not anything new in the announcement coming out of the MEF," said Ilana Solomon, a climate policy analyst at ActionAid, a global anti-poverty agency.

Solomon noted that the 2011 climate allocation jumped to $1.9 billion from the $1.4 billion in President Obama’s budget earlier this year, thanks to some double counting.

"The administration seems to now be counting $386 million from other programs which have ‘co-benefits’ for climate adaptation and mitigation, such as investments food security and health programs, as climate finance," Solomon said. "This double counting raises serious questions."

At the international climate talks in Copenhagen last year, the world agreed to provide $10 billion in new fast-track finance per year from 2010-2012. For rich nations, that promise was one of the few areas where they could demonstrate a breakthrough.

To the dismay of poor countries, however, there is little sign of the cash pouring in.

Further angering developing countries, the funding pledges can be channeled through a variety of aid organizations, including the World Bank, which often sets conditions and fees on its handouts. Poorer states want the money funneled through a single global fund set up under the U.N. Framework Convention on Climate Change (UNFCCC).

Nearly 50 percent of U.S. climate dollars would flow through the World Bank. Less than 5 percent would be dispersed through the UNFCCC, according to government figures.

"The World Bank is in no way accountable to the UNFCCC," said Solomon. The bank, she added, "is in many ways actually exacerbating climate change through continued lending in fossil-fuels, and is not trusted to manage climate finance by many developing countries."

Todd Stern, the U.S. climate envoy, called the U.S. commitment "a very significant step up from what we’ve had before." Stern said there is nothing standing in the way of the funding being released.

"There are no preliminary steps that need to be done in order to have funding start to flow," he said.

At the MEF talks, there was "a broader agreement that funding needs to be made available," Stern said. But concrete aid commitments were not in play.

"There is an appreciation by everybody in the room that it’s important to make good on that commitment," he added. However, "there wasn’t a lot of individual country explanation of what everybody’s doing."

Nations remain reluctant to lay out specific, and adequate, dollar amounts. The EU, for instance, has pledged to throw $3.36 billion into the fast-start pot for this year. According to an analysis by the World Resources Institute, however, pledges by individual members states have not yet reached this goal. A gap of over a billion dollars persists.

Stern said it would be up to the countries themselves to figure out how to budget sufficient funds and monitor their release.

"Each of the donor countries is going to be keeping a good record of what they’re doing," he said.

Advocates are hoping that an April 22-23 meeting of the G20 finance ministers will force clarity on the issue.  

Mark Lutes, a policy coordinator at the WWF Global Climate Initiative, said the G20 could do two things on fast-start finance. For starters, the group could include in their statement the exact pledges by developed country members. They could also spell out how they will ensure the money "is not just recycling past commitments or shifting aid funding from development to climate," Lutes said.

The purpose of these alternative forums, like the MEF and the G20, is to help build consensus on sticking points on the road to the next major UNFCCC conference, planned for Mexico in December. This week’s gathering was the sixth of the MEF under Obama’s watch.

Representatives of the 17 major economies of the world, the United Nations, and representatives of Colombia, Denmark, Grenada and Yemen were in attendance.

The U.S. said it is considering holding another MEF later this summer.

Dragged to Light: Rich-Poor Rift Over Copenhagen Accord

Overall, the conversation at the MEF "was candid and constructive," said Michael Froman, U.S. deputy national security adviser for international economic affairs.

According to Stern, the rich-poor divide is overstated: "There is more convergence than you might think at the broad level." He said nations share the view that the negotiations must build on the progress made at the Copenhagen summit.

The two-week talks in December ended in the Copenhagen Accord, a non-binding document hashed out on the sidelines mainly by the U.S. and the BASIC bloc of nations — China, India, South Africa and Brazil. It was merely "noted" by the 193 nations of the Conference of Parties after objections by a handful of developing countries.

Those developing nations, most vocally Bolivia and Venezuela, accused the rich of being undemocratic and not transparent.

Washington, however, strongly favors the Copenhagen Accord as a blueprint for a new global warming treaty. Stern said a "good outcome" in Mexico this year would be continuing what was done in Denmark.

"We are very much in the glass half-full camp and think the Copenhagen Accord did quite a bit and was an important agreement," he said.

In Cochabamba, Bolivia, this week, at the first World People’s Conference on Climate Change, the glass half-empty camp made its complaints known to the world. For the 7,500 developing nation advocates there, the Copenhagen Accord represents a breakdown in UN climate negotiations and should be scrapped.

The goal of the conference, according to its organizers, is to give the poor nations who were left out of dealings in Denmark a voice on climate change. Unlike Copenhagen, they say, the meetings have been open and inclusive. The goal is to build a model for future UN climate talks.

This division over the status of the Copenhagen document in future talks reveals a potentially paralyzing rift between rich and poor — whether to use it as a baseline for agreement or set it aside in favor of the existing two tracks of UNFCCC negotiations.

For his part, Stern said there is "a lot of support" for the idea that the Copenhagen Accord be brought in and "reflected" in the negotiations this year.

Exactly what the final form will be at the end of the year, however, is being "left open," he said, stressing the need to keep realistic expectations.

See also:

Confusion About Copenhagen Accord Casts Cloud Over UN Climate Treaty

Nations Threatened by Climate Change Call on Developed World to Give 1.5% of GDP

More than a Quarter of World’s Poorest States ‘Associate’ with Copenhagen Accord