Stock of Outward Foreign Direct Investment (OFDI) from Four Emerging Economies and Combined OFDI Flows, 1998–2011
Focus on Multilateral Agencies
This working paper is part of WRI’s Climate Finance Series, which tackles a broad range of issues relevant to public donors, intermediaries, and recipients of climate finance. A subset of this series, including this working paper, examines how public funds can leverage private sector investment...
This piece was co-authored with Smita Nakhooda of the Overseas Development Institute, with inputs from Noriko Shimizu (IGES) and Sven Harmeling (Germanwatch).
Developed countries self-report that they have delivered more than $33 billion in fast-start climate finance between 2010 and 2012, exceeding the pledges they made at COP 15 in Copenhagen in 2009. But how much of this finance is new and additional? Developing countries and other observers have raised questions about the nature of this support, as well as where and how it is spent. Independent scrutiny of country contributions can shed light on the extent to which fast-start finance (FSF) has truly served as a mechanism to scale-up climate finance. Our organizations have analyzed the FSF contributions of the United Kingdom, United States, and Japan, and analysis of Germany’s effort is forthcoming.
Our analysis revealed four key insights into the FSF experience:
1) Developed Countries Have Ramped Up Climate Support
The FSF period has been a difficult one: Developed countries pledged their climate finance support at the advent of unprecedented economic difficulty brought on by the 2008 financial crisis. Nonetheless, developed countries have sustained support for climate change adaptation and mitigation in developing countries, despite fiscal austerity measures that have substantially cut back public spending. Indeed, all of the countries we reviewed appear to have significantly increased their international climate spending since 2010.
In many cases, data limitations impede a direct or accurate comparison of fast-start spending to related expenditures before 2010. But the UK appears to have increased its climate finance four-fold relative to environment-related spending before the FSF period. Germany has nearly doubled climate-related finance. Japan previously mobilized $2 billion per year in climate finance through the Cool Earth Partnership; under FSF, it reports average spending of more than $5 billion per year. Finally, through its Global Climate Change Initiative, the United States has increased core climate funding from $316 million in FY09 to an average of $886 million per year in FY10 to FY12.
As we move into the second week of the UN climate talks, the desert sand is swirling around the conference center in Doha, Qatar. Countries spent the first week tying up some loose ends on several issues, but there are still many details to be worked out before the sand settles and Parties head home. It’s hard to tell whether this meeting will turn into a full sandstorm or clear up.
The uncertainty here in Doha contrasts greatly with the increasingly clear (and grim) climate picture that we’re seeing around the world. Yet another report was just published finding that global carbon emissions are at an all-time high. This publication comes on the heels of the recent UN Environment Programme report showing that the gap in emissions is growing even wider. And, recent World Bank analysis reinforced the potential catastrophic impacts of moving beyond 2 degrees Celsius of global temperature rise. The warnings are clear, but it’s hard to tell if negotiators are ready to respond with the urgency that’s needed.
The Current State of COP 18
Indeed, it is fair to say that most of the critical issues on the table at COP 18 are not yet resolved. All the questions around the Kyoto Protocol and a second commitment period are still open. Issues surrounding finance – including medium-term pledge levels, the long-term work plan, and how to track countries’ climate finance commitments – have yet to be worked out. Roundtables on the Durban Platform resulted in a good exchange of views, but it’s still unclear whether there will be a firm work plan for 2013 or whether it will remain vague. The most vulnerable countries are understandably asking for more action now – even before a new 2020 agreement kicks in – but most countries haven’t put forth specific proposals.
While it’s not surprising that so many topics are stuck after the first week, the lack of action puts additional focus on the role of Ministers. Many are already in Doha, and they have their work cut out for them if they want to make progress in the remaining week of the conference.
Japan’s fast-start finance (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...
WRI’s preliminary analysis on countries’ immediate “fast start” climate finance pledges announced thus far.
This post was co-authored with Kate DeAngelis, an intern with WRI's Climate and Energy Program.
Ambition is a word often used in the context of United Nations Framework Convention on Climate Change (UNFCCC) negotiations. While most people think of ambition as a strong desire to achieve something, the word has a more specific meaning when it comes to international climate action.
What Does Ambition Mean and Why Is it Important?
The UNFCCC’s ultimate goal is to stabilize greenhouse gas concentrations in the atmosphere at a “level that would prevent dangerous, anthropogenic interference with the climate system.” Scientists have found that in order to avoid devastating consequences such as mass desertification, glacier loss, extreme weather, and sea level rise, the international community must limit global warming to 2°C above pre-industrial levels. In the climate negotiations, “ambition” refers to countries’ collective will—through both domestic action and international initiatives—to cut global greenhouse gas emissions enough to meet the 2°C goal. Ambition further represents the actual steps countries are taking to meet that temperature goal.
Collective ambition is deemed to be lacking when the aggregate policies and actions of all countries are deemed insufficient to meet the 2°C goal. Countries are also judged on their own individual ambition levels, which are assessed based on their commitments to reduce greenhouse gases. In recent years, effective implementation of policies has emerged as an additional method for evaluating whether individual countries are sufficiently ambitious or not.
“Two years ago at the UNFCCC conference in Cancun, negotiators agreed that the world would seek to limit global average temperature rise to 2 degrees Celsius,” Andrew Steer, WRI’s president, said during a recent press call. “We are not on track for that. We’re a long way off, and the situation is very urgent.”
That’s why the upcoming U.N. climate negotiations in Doha, Qatar (COP 18) are so critically important. As sea level rise, wildfires, and devastating droughts showcase, climate change’s impacts are already being felt across the globe. Meanwhile, extreme weather events—most recently, Hurricane Sandy—serve as powerful reminders of what will likely become more and more the norm if action is not taken. When negotiators meet in Doha at the end of this month, they’ll need to figure out a way to make progress, both to finalize the rules of past decisions and how to come to an international climate agreement by 2015.
Listen to a recording of WRI's press call on the upcoming Doha climate talks.
The committees governing the $7 billion Climate Investment Funds (CIFs) – the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF) – will meet in Istanbul this week. Alongside these meetings, a range of stakeholders from civil society, indigenous groups, and the private sector will participate in a series of events organized as part of the annual Partnership Forum, which takes place from November 4-7, 2012.
Decisions made at these meetings are critically important for the funding of climate mitigation and adaptation activities in developing nations. They’ll have important implications for meeting the immediate investment needs of developing countries, as well as for long-term global climate finance. The meetings will mark the start of discussions on how to sunset the CIFs and transition to a new global climate finance mechanism—the Green Climate Fund.
The Intergovernmental Panel on Climate Change (IPCC) estimates that our best chance of containing global temperature rise to 2°C is to keep atmospheric concentration of carbon dioxide below 450 parts per million (we’re currently at 390 ppm). In addition to several other climate mitigation strategies, sticking to this cap will require significant new investment in low-carbon infrastructure and activities in developing countries.
Experts estimate the cost of funding this development to be about $300 billion annually by 2020, growing to $500 billion by 2030. The problem is, there’s a huge funding gap when it comes to meeting these costs—industrialized nations have only committed to mobilize $100 billion of new funds annually by 2020 to meet these needs. The world will need to figure out a way to come up with the rest of the funding if we’re going to prevent developing nations from feeling climate change’s most severe impacts.
Introducing WRI’s Climate Finance and the Private Sector Project
Tapping into the private sector is one way to bridge the climate finance funding gap. The World Resources Institute’s new Climate Finance and the Private Sector (CFPS) initiative has been designed to specifically address how the public sector can leverage private investment in a low-carbon future.