WRI Publications Feed: COP 18: Doha

Greenhouse Gas Mitigation in the EU: An Overview of the Current Policy Landscape

Sarah Parsons — Thu, 29 Nov 2012 18:33:42 -0500

Executive Summary

In 2009, the European Union (EU) pledged a unilateral greenhouse gas (GHG) reduction target of 20 percent below 1990 levels by 2020, rising to 30 percent if “other developed countries commit themselves to comparable emission reductions” (European Council 2009). The EU’s GHG target forms one pillar of a so-called 20-20-20 package that, in addition to the 20 percent GHG reduction, demands a 20 percent share of renewable energy sources in gross final energy consumption along with a 20 percent improvement in energy efficiency by 2020. In addition to its 2020 targets, the EU has also set a long-term GHG reduction goal of 80 to 95 percent from 1990 levels by 2050.

In the context of these goals, this report provides a summary of existing and emerging EU policies that are likely to reduce GHG emissions across the EU. Our analysis focuses on policies that are mandatory or provide a financial incentive, such as the European Union Emissions Trading System (EU ETS) – a cornerstone of EU climate policy – the Renewable Energy Directive, and the Biofuels Directive. We discuss the relationship of these policies to the EU’s GHG and energy targets, and identify key issues to watch in the EU’s evolving policy landscape.

This report draws on projections from the “Energy Roadmap 2050” to assess whether the EU is on track to reach its GHG, renewable energy and energy efficiency targets. We find that the EU is on track to surpass its 2020 GHG reduction and renewable energy targets based on current policies, but that additional measures will be required to meet the 2020 energy efficiency target and the 2050 GHG reduction goal.

New and emerging policies, including the Energy Efficiency Directive, reforms to the EU ETS, and a proposed Energy Taxation Directive, which aims to restructure taxes on energy products, provide options that can begin to bridge this gap. It will be important to monitor these developments, as well as the EU’s positioning in the international community vis-à-vis the possible strengthening of its 2020 target.

Greenhouse Gas Mitigation in the United States: An Overview of the Current Policy Landscape

Sarah Parsons — Thu, 29 Nov 2012 18:11:27 -0500

Executive Summary

In 2009, at the 15th meeting of the Conference of the Parties, President Barack Obama pledged to reduce U.S. greenhouse gas (GHG) emissions “in the range of a 17 percent emission reduction by 2020 compared with 2005 levels.” To date, this pledge is not enshrined in or supported by any domestic law. However, a variety of federal policies and programs are directly and indirectly reducing GHG emissions. In addition, U.S. state and local governments have authority to adopt GHG-reduction policies, and some are taking noteworthy actions.

In the context of the U.S. GHG reduction goal, this report examines key existing and emerging federal policies that are likely to reduce GHG emissions in the United States. Pages 10-12 also provide examples of policy actions being taken by U.S. states. For federal policies, our discussion focuses on those that are mandatory or provide a financial incentive, such as the American Recovery and Reinvestment Act of 2009 (ARRA), tax credits for renewable energy, and new standards for passenger cars and trucks. These programs, and others that are considered in the pages that follow, will drive significant reductions in U.S. GHG emissions.

Will this be enough to meet U.S. GHG reduction goals? Although this report does not provide an exhaustive assessment of U.S. policies, U.S. government GHG projections suggest that additional policy action is likely to be necessary for the United States to achieve the president’s GHG reduction target and continue significant emissions reductions after 2020. At this time, no promising initiatives are being considered in the U.S. Congress to drive further reductions in GHG pollution.

However, federal agencies already have the authority to do more, and have begun to take action. Additional policies such as standards for existing power plants, additional energy efficiency standards for appliances and equipment, and policies that reduce HFC consumption, can drive additional reductions in 2020 and beyond. WRI is conducting a separate analysis to quantify the possible reductions from these policies and to examine their impact on the United States’ 2020 reduction target. Moving forward it will be important to track action on these and other policies.

The Japanese Fast-Start Finance Contribution

Sarah Parsons — Wed, 28 Nov 2012 12:42:08 -0500

Executive Summary

Developed country governments have repeatedly committed to provide new and additional finance to help developing countries transition to low-carbon and climate-resilient growth. This assessment considers Japan’s efforts to provide “fast start finance” (FSF) between January 2010 and February 2012 in the context of the pledge by developed countries to mobilize USD 30 billion from 2010 to 2012 under the United Nations Framework Convention on Climate Change (UNFCCC). It is part of a series scrutinizing how developed countries are defining, delivering, and reporting FSF.

Given the size of its economy, Japan has a major role to play in delivering FSF.

Japan’s USD 15 billion FSF commitment is one of the largest amongst developed countries, but it is important to consider the contents of this commitment. Japan has played a significant role in global efforts to finance climate change activities in developing countries, and its FSF commitments accounts for almost half of the FSF that developed countries have pledged for 2010-2012. However, it is essential to better understand the broad range of instruments and activities that the government includes in its FSF, as different governments consider different types of finance to constitute FSF, so self-reported figures are not directly comparable between countries.

Other official flows (OOF) such as export and investment insurance, non-concessional loans, and guarantees make up around 40% of Japan’s total FSF contribution so far, and there is some ambiguity around the role of leveraged private finance. OOF amounts to as much as USD 5.1 billion of the USD 13.2 billion mobilized by 29 February 2012 sincethe announcement of the Hatoyama Initiative in September 2009. This includes USD 3.1 billion of leveraged private finance. While the role of leveraged private finance in the Japanese pledge is ambiguous, as discussed in the section on Methodology, we have included it in the analysis presented in this paper.

Japanese FSF is heavily weighted toward mitigation. About 70 percent of Japanese FSF addresses mitigation objectives. Most mitigation finance, in turn, is financed through loans (both ODA and non-ODA), which constitute about 75 percent of the contribution for infrastructure development projects, such as urban transport projects. There is a more even balance between adaptation and mitigation objectives within the grant portion of the FSF contribution (adaptation: 30 percent, mitigation and REDD+: 27 percent, multiple objectives: 43 percent). A significant share of Japanese FSF addresses one or more non-climate objectives in addition to mitigation or adaptation urban transport projects. Asia receives the most FSF among all regions, irrespective of financial instrument type. It is worth noting that the Japanese FSF includes a number of “clean” fossil fuel power plant construction projects, such as a natural gas combined cycle (NGCC) power plant project in Central Asia. There is a need for greater clarity amongst members of the international community about how support for lower carbon fossil fuel facilities should be treated in the context of climate finance.

On balance, it is not clear that the entirety of the Japanese FSF is “new and additional.” While the FSF contribution reflects some new effort to address climate change, it is unclear that the contribution as a whole can be considered “new and additional.” Since the start of the FSF period, Japan has substantially increased international finance that explicitly targets climate change. Some Japanese agencies have also begun integrating climate change into aspects of development assistance and development finance. Applying five different criteria proposed by experts and practitioners, however, the results indicate that at least a portion of the Japanese FSF spend is not new and additional. A significant share of Japanese FSF reflects pre-existing pledges to development assistance initiatives to scale up climate change related finance such as those articulated in the Japan Cool Earth Partnership of 2008. Furthermore, Japan’s FSF cannot be seen as additional to its existing commitments to scale up development finance to 0.7 percent of its GNI.

FSF reporting follows Japan’s standard processes for reporting on conventional development assistance, whose transparency can be strengthened to meet new needs associated with FSF. There is room for improvement in terms of the transparency, accountability and credibility of Japanese FSF. Some of the identified issues may be attributable to the fact that Japanese FSF contains a large number of projects supported by a variety of channeling institutions. This has made it difficult for the government to present a clear overview of Japanese FSF.

The largest issue is that the information on FSF is disaggregated, although project-level information provided by the implementing agencies is detailed. Most of the climate finance projects could not be easily identified without extensive key word research on the websites of implementing agencies. This study identified about 250 likely FSF projects, amounting to USD 11.7 billion or nearly 90 percent of the amount committed by 29 February 2012. At the same time, about 500 FSF projects – most of which are of relatively low monetary value – could not be independently identified.

The Japanese government has already taken steps to strengthen the transparency of Japanese FSF, such as adding information about channeling institutions to the list of FSF projects included in its second submission to the UNFCCC. However, additional information would facilitate an informed discussion of the adequacy of FSF efforts. The following practices would further strengthen the transparency of Japanese climate finance reporting:

Provide a complete list of the projects that have been supported through the Japan FSF spend. Specify the climate finance projects that constitute aggregated numbers in the official documentation;
Include hyperlinks to the relevant webpages that describe the projects that have been supported through FSF in this proposed project list, as this would substantially enhance stakeholder access to information on the FSF contribution and understanding of its objectives;
Compile all information on its climate finance contributions in one easily accessible format, and support access to supporting information on the individual projects that constitute the FSF spend;
Explain the eligibility criteria for the ODA and OOF flows that have been counted towards the FSF contribution;
Work in cooperation with other contributor countries and multilateral institutions to strengthen and harmonize bilateral and multilateral reporting on climate finance.

Monitoring the Receipt of International Climate Finance by Developing Countries

Sarah Parsons — Fri, 07 Sep 2012 10:19:30 -0400

Executive Summary

The 2010 Cancun Agreements and 2011 Durban Outcome call for developing countries to register, monitor, and report on support received, and for developed countries to improve their reporting by using more complete climate finance reporting guidelines. Doing so will enable information on climate change finance from developed countries to be matched with information from developing countries. The lack of detailed guidance makes it difficult for developing countries to decide how to respond to calls to report climate finance received.

This paper explores the challenges faced by three Asian countries, that is, Indonesia, the Philippines, and Vietnam in monitoring finance for climate change. Challenges faced in the three focus countries can be grouped into five categories, and are summarized as follows:

Definitions and Criteria: Countries and donor institutions use a variety of definitions and criteria in identifying climate finance and distinguishing it from other development finance. For the three focus countries, no formal climate finance marker system or definitive guidance exists to help address this definitional issue.
Classifications and Indicators: Sector and activity type classifications also vary widely among donor and recipient institutions, and often do not lend themselves well to climate finance. For example, in the Philippines, there is no energy-specific classification in its current official development assistance (ODA) monitoring system.
Financial Instruments: The type of financial instrument monitored can carry both political implications as well as technical challenges. From a political standpoint, many developing countries and NGOs hold that climate finance—especially adaptation finance—should be delivered primarily in the form of grants. From a technical standpoint, all three countries expressed challenges in monitoring grants, while their loan monitoring systems are fairly developed.
Source: Private finance could potentially play a very important role in international climate finance and its monitoring may be something developing countries could explore for domestic purposes. However, domestic private finance monitoring efforts in the focus countries are often not coordinated with ODA monitoring efforts, nor do they include climate-specific information.
Institutional Arrangements: In the three focus countries, institutional responsibility for the coordination of national climate finance and development of monitoring systems is generally fragmented. Institutional platforms and databases for gathering data on climate finance in particular do not exist. Countries have two options, that is to either modify existing systems or to develop standalone/complementary standardized climate data systems for climate finance.

Despite significant challenges in building their capacity to monitor the receipt of climate change finance, government officials consulted in all three countries expressed an interest in doing so. Such efforts would require several steps, including, for example:

Developing the institutional arrangements and technical platforms necessary to monitor climate finance received. This may include the formation of an interministerial working group on climate finance with an agenda item dedicated to monitoring climate finance, and a complementary (stand-alone) management information system.
Agreeing on and adopting climate finance-specific definitions, criteria, and classifications.
Agreeing on the scope of information to be tracked (type of financial instrument, private versus public, etc.).

Such efforts should be complemented and furthered by support at the international level, both in the form of consistent yet flexible guidance that takes into account the domestic challenges outlined in this paper, as well as financial and capacity building support from developed countries.

Case Study: Applying Information for Adapting the Agriculture Sector in Bundelkhand, India

Sarah Parsons — Tue, 04 Sep 2012 16:25:44 -0400

This case study examines two projects implemented by Development Alternatives to highlight the multiplicity of data sources involved in adaptation decision making, provide an analysis of how information was used, and explore the challenges associated with information use for adaptation decision making in the agricultural sector.

This case study is part of a series under the World Resources Institute project, Information for Climate Adaptation in South Asia: Identifying User Needs. Each of the case studies in this set explores an aspect of information use in adaptation decision making. The goals of this series are two-fold:

Provide insights into how information (such as climate projections, stakeholder interviews, and environmental monitoring) can be used to support adaptation decisions; and
Guide investments by national governments and their development partners in information systems that can inform decision making around risks related to climate change.

This case study series was supported by the UK Department for International Development. Case study authors used the same framework of guiding questions for their research, which consisted of literature reviews and interviews.

Case Study: Information Use in Nepal's National Adaptation Programme of Action

Sarah Parsons — Tue, 04 Sep 2012 16:14:36 -0400

Nepal is passing through a turbulent period of transition, reorganizing its internal political boundaries, establishing a federal structure, and changing the very nature of the national government. Since 2008, Nepal’s priorities have been dominated by these political imperatives, a post-conflict peace process, and attempts to integrate Maoist ex-insurgents into the national mainstream. This dynamic presents numerous challenges for the government in seeking to meet the country’s development and environmental needs. Climate change adds extra stress to these needs in the form of heightened weather variability, extreme events, and other impacts on the country’s natural and social systems.

Provide insights into how information (such as climate projections, stakeholder interviews, and environmental monitoring) can be used to support adaptation decisions; and
Guide investments by national governments and their development partners in information systems that can inform decision making around risks related to climate change.

Case Study: Communicating Modeled Information for Adaptation Decision Making

Sarah Parsons — Tue, 04 Sep 2012 15:30:27 -0400

The HighNoon project, which began in 2009, set out to assess the impact Himalayan glacier retreat and expected changes in the Indian summer monsoon on the distribution of water resources in Northern India. The project’s aim was “to recommend appropriate and efficient response strategies to enable adaptation to hydrological extreme events.” The project used information from scenarios generated by regional climate and hydrological models and integrated it with stakeholder perspectives to identify and prioritize adaptation strategies. This case study examines the HighNoon project in order to explore how adaptation-relevant information can best be packaged and disseminated to different users and audiences at the state, district, and block levels.

This case study is part of a series that fall under the World Resources Institute project, Information for Climate Adaptation in South Asia: Identifying User Needs. Each of the case studies in this set explores an aspect of information use in adaptation decision making. The goals of this series are two-fold:

Provide insights into how information (such as climate projections, stakeholder interviews, and environmental monitoring) can be used to support adaptation decisions; and
Guide investments by national governments and their development partners in information systems that can inform decision making around risks related to climate change.

The U.S. Fast-Start Finance Contribution

Kevin Lustig — Thu, 17 May 2012 11:54:20 -0400

Executive Summary

OpenClimateNetwork.org

Visit openclimatenetwork.org for the latest analysis, project info, expert perspectives and more.

Developed country governments have repeatedly committed to provide new and additional finance to help developing countries transition to low-carbon and climate-resilient growth. This assessment considers U.S. efforts to provide “fast start finance” (FSF) in fiscal years 2010 and 2011 in the context of the pledge by developed countries to mobilize $30 billion1 from 2010 to 2012 under the United Nations Framework Convention on Climate Change (UNFCCC). It is part of a series scrutinizing how developed countries are defining, delivering, and reporting FSF.

Given the size of its economy and its historic responsibility as a top emitter of greenhouse gases, the United States has a major role to play in delivering FSF. Key characteristics of the U.S. FSF contribution are quantified in Figure 1.

The U.S. FSF contribution of $5.1B reflects a positive effort made in challenging political and economic circumstances, but there is more to be done. Congress and key agencies have increased funding for climate change objectives relative to the pre-FSF period, and have begun to integrate climate considerations into ongoing portfolios. The global economic recession and the resulting pressure to cut spending, however, combined with an active subset of policy-makers who oppose U.S. action on climate change, have impeded further increases to climate finance.

The US does not count private finance toward its FSF contribution, but it does count non-grant instruments as well as development assistance. Loans, loan guarantees, and insurance constitute one-third of the U.S. contribution; grants and related instruments (including contracts and grant contributions to multilateral climate funds) account for the rest. Only a minority of the funds examined – 40% for adaptation and 29% for mitigation – support projects that clearly target climate change as a principal objective, although the remainder can in most cases still be expected to deliver climate benefits. (A greater share may principally target climate change, but adequate information was not available to support this conclusion.)

While the FSF contribution reflects some new effort to address climate change, it is unclear that the contribution as a whole can be considered “new and additional.” Since the start of the FSF period, the United States has substantially increased international finance that explicitly targets climate change. Some U.S. government agencies have also begun integrating climate change into aspects of development assistance and development finance. The United States is also counting as FSF projects and programs that it was funding – and that were likely delivering climate benefits – prior to the FSF period. Furthermore, the United States has distanced itself from targets and timetables to increase development assistance, and climate finance appears to be increasing at a significantly faster rate than development assistance.

There is a need for additional transparency and harmonization in reporting. The United States has made significant efforts over the past several years to improve monitoring and reporting on climate finance, as well as on foreign assistance. However, there is room for improvement.

We recommend that the United States:

Publish the criteria it uses to program and identify FSF.
Publish a detailed list of the projects and programs that constitute FSF, including, for each project, the amount, the administering agency, the financial instrument, the recipient country (where relevant) and institution, whether it is supported by core or non-core climate finance, and, to the extent feasible,information on disbursement status.
Identify and explain any discrepancies between such a project list and the total reported FSF sum, and explain how non-grant instruments are counted.
Provide complete information on U.S. FSF in a single document, so that users can avoid the need to download and reconcile over 240 documents to access this information.
Harmonize reporting between the FSF reports and the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) by ensuring that relevant FSF projects are tagged with the appropriate DAC Rio Markers and using consistent project titles between the two reporting systems.
Work in cooperation with other contributor countries and multilateral institutions to strengthen and harmonize bilateral and multilateral reporting on climate finance.

The UK Fast-Start Finance Contribution

Kevin Lustig — Thu, 17 May 2012 11:21:25 -0400

Executive Summary

OpenClimateNetwork.org

Visit openclimatenetwork.org for the latest analysis, project info, expert perspectives and more.

Developed country governments have repeatedly committed to provide new and additional finance to help developing countries transition to low-carbon and climate-resilient growth. This assessment considers UK efforts to provide “fast start finance” (FSF) in 2010/11 and 2011/12 in the context of the pledge by developed countries to mobilise funds approaching USD 30 billion from 2010 to 2012 under the United Nations Framework Convention on Climate Change (UNFCCC). It is part of a series of studies scrutinising how developed countries are defining, delivering, and reporting FSF.

The UK has a major role to play in delivering FSF. It is one of the richer economies in the developed world. Like other developed countries, it bears historic responsibility for contributing to the global accumulation of greenhouse gases. Key characteristics of the UK FSF contribution are quantified in Figure 1.

The UK has made a substantial effort to mobilise climate finance. Finance has been channelled through the Environmental Transformation Fund in 2010/11 and through the International Climate Fund (ICF) in 2011/12. GBP 1.06 billion had been spent and committed as of November 2011. It has also committed climate finance beyond the FSF period through the International Climate Fund (ICF), which will spend GBP 2.9 billion between April 2011 and March 2015.

The majority of UK finance is spent by multilateral institutions, in the form of capital contributions. UK contributions of GBP 715 million to the Climate Investment Funds (CIFs) administered by the World Bank in partnership with Regional Development Banks constitute the largest share of its FSF.

*The UK does not count private finance toward its FSF contribution, but it does count non-grant instruments as well as development assistance.** The majority of the projects supported do seem to have climate change as a principal objective.

While the FSF contribution reflects some new effort to address climate change, it is unclear that the contribution as a whole can be considered “new and additional.” Since the start of the FSF period, the UK has substantially increased international finance that explicitly targets climate change. The UK is also counting as FSF projects and programmes that it was funding – and that were likely delivering climate benefits – prior to the FSF period. Much of the funding counted was pledged prior to the FSF period, notably the contributions to the CIFs and Congo Basin Forest Fund. Climate finance appears to be increasing at a significantly faster rate than development assistance.

The UK is relatively transparent about its FSF spend, but more can be done. The UK discloses a list of projects and programmes to which FSF has been directed to interested stakeholders, and to the European Commission (EC) on an annual basis. The UK’s adoption of new transparency standards for its administrative processes is substantially strengthening its performance in this regard. Specifically, it participates in the International Aid Transparency Initiative (IATI) for its official development assistance (ODA) spending. In this context, government departments are now required to disclose the business case for all projects that receive public support. A business case presents the key components and purpose of the programme, and how it contributes to the achievement of relevant government UK strategic objectives. This includes relatively comprehensive information on the institutions receiving funding and implementing projects.

There is a need to improve access to information in practice. The commitment to disclose business cases was made in January 2011 and has not been applied retroactively. In practice, few business cases have yet been made available. We do note some discrepancies between aggregate and project-level reporting, although we recognise that the project list is a snapshot at a given moment in time of the collection of FSF recipients. As new systems to improve reporting and disclosure on the status of programmes funded by the UK government are implemented, we should expect to see higher levels of transparency realised in practice.

We recommend that the UK:

Disclose underpinning project-level spending information alongside aggregate reporting
Ensure that project lists consistently specify the recipient institution for finance to reduce discrepancies and enhance transparency
Work in cooperation with other donors and multilateral institutions to strengthen and harmonise reporting on climate finance, particularly with regards to the status of disbursement
Ensure that business cases for approved projects are publicly disclosed in a timely manner by all ICF implementing departments

Building International Climate Cooperation: Lessons from the Weapons and Trade Regimes for Achieving International Climate Goals

Kevin Lustig — Fri, 04 May 2012 15:42:34 -0400

About this Report

Watch

A conversation about the report with author Ruth Greenspan Bell and Jennifer Morgan, Director, Climate and Energy Program

Tackling global climate change requires countries across the world to engage in multigenerational cooperation (referred to herein as “collective action”) to advance a transition to a near-zero-carbon economy by 2050, in order to keep global average temperature increase below 1.5–2 degrees Celsius in comparison with preindustrial levels. No one country can achieve the necessary emissions reductions alone. If we are to succeed, there must be sustained political engagement across countries to solve difficult conflicts, such as the level of effort versus cost, or equity versus environmental rigor. Issues where agreement is needed include:

Targets, timetables, and actions for reduction—who does what, by when, and how?
Common standards for measuring emissions—what standards, who uses them, and when?
Robust mechanisms to verify the implementation of national actions—what, who, when, and how?

What might negotiators in the third decade of building collective action to address climate change learn from the experience of negotiators who manage other problems that by their nature require global action? This report contributes to this question by examining two such negotiating areas where considerable experience has been gained in devising agreements and institutions. The first is control of weapons of mass destruction, a field relatively unknown in the climate change world. The second, multinational economic arrangements, is more familiar ground but an area that warrants deeper examination. Although such arrangements have not “solved” weapons or economic challenges, notable progress has been made since the middle of the 20th century, and thus these arrangements offer valuable insights for climate negotiators.