Cash Rules Everything Around … Climate Change

by Paolo Cozzi

One of the accomplishments that allowed negotiators to claim the Cancun climate talks as a success was the progress made on the development of a “Green Climate Fund.” Negotiations are coming together in mid-March to theoretically hammer out the details of this multi-billion dollar pot which will help vulnerable nations cope with Climate Change, protect forests and develop low-carbon economies. The Green Climate fund is one of the vehicles expected to be used to help developing nations cope with climate change. While the very fact that there is any progress is encouraging, there are a number of potential stumbling blocks in this process.

The first such obstacle is, predictably: money. And whether there will be enough of it. So-called “fast-start finance” was first announced in the COP15 talks in Copenhagen in 2009, with a pledge to raise $30 billion in assistance for developing nations between 2010 and 2012, along with a promise to raise $100 billion annually by 2020. However, a lot of that is slow to materialize, and some developing nations are concerned with what they see as developed nations, rather than providing “new and additional” funding, dressing up other foreign aid as fast start finance.

Political realities within the United States make achieving these goals even more difficult. With a climate-denying Freshman class in the House of representatives, and the Republican party on a spending-cut crusade, the Obama administration’s is coming up against opposition from a Congress with an aversion to the words “international” and “climate.” Indeed, recent attempts have been made by Congress to fire the US representative to international climate change negotiations. UN officials have suggested that in order to reach $30 billion, at least 10 will need to come from the US. This is a lot of water to draw from a climate-denying stone, and when foreign aid is on the chopping block, even if the United States were to come up with the money it would be hard to argue that it was “new and additional.” Indeed, one of the Obama administration’s pledges at Copenhagen, to set aside $1 billion over three years for the protection of tropical forests, was downgraded prior to even submitting the budget proposal to $759 million. It’s hard to see where the cash is going to come from.

However, let’s suppose Senator Jim Inhofe (one of the most vocal climate-deniers in the Senate) has a greenhouse gas epiphany, and everything else goes according to plan, so by2020, $100 billion is flowing into the developing world in the form of aid, loans, loan guarantees, investment, etc. Climate Change in developing countries, is solved, right? Wrong. First, recent reports by the United Nations Development Programme (UNDP) and the United Nations Framework Convention on Climate Change (UNFCCC) put the cost of climate change adaptation alone to be between $86 billion and $171 billion per annum by 2030. That does not include money spent on clean development to ensure that developing nations don’t follow our lead and burn every piece of coal they can get their hands on. In a future potentially without a Kyoto protocol and associated CDM, this piece looks particularly tricky and like something that needs to be kept in mind.

Some argue that if the United States is unable to follow through on these commitments, it will damage its reputation. While this may be true with regards to relations with specific countries – Bangladesh could very well hold a grudge about adaptation funding, Brazil about tropical forests, the Maldives because their very existence is threatened – the US doesn’t hold that much credibility on climate change to begin with. For one after showing leadership in helping put the Kyoto protocol together, the US signed it immediately, never ratified it, and actually removed its name from the document later. Also, though until recently the largest emitter of greenhouse gases on the planet, the US has been unwilling to commit to binding targets, and has made significantly less progress at a national level than many other OECD countries. The US is looked to leadership because it’s big, rich and powerful, not because we’ve gotten out in front of the climate issue. Though the US isn’t likely to meet its commitments within the next year or two, and climate finance might not get where it needs to be, I wouldn’t be counting on people shuning the US at next year’s major climate talks in Durban, South Africa.

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