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5 Insights from Developed Countries' Fast-Start Finance Contributions

Sven Harmeling, Takeshi Kuramochi, and Steffen Kalbekken also contributed to this post.

How are we going to deliver climate finance at a sufficient scale to help developing countries mitigate and adapt to climate change? Parties to the UNFCCC--including those at this month’s intersessional in Bonn--are struggling to agree on the answer to this question. The UNFCCC established a Standing Committee on Climate Finance to take stock of global progress towards this goal, while a work program on Long-Term Finance will continue this year.

As these various groups debate the future of climate finance, it’s important to look back at progress and trends thus far. The fast-start finance (FSF) period offers important insights into how different developed countries are approaching the challenge of delivering international climate finance. These lessons can inform future efforts.

Major Insights from the Fast-Start Finance Period

Developed countries report that they delivered more than $33 billion in FSF 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? How has it been allocated, and what is it supporting?

Building on Momentum: 2 Ways to Make Progress at the Bonn Climate Talks

Delegates at the April UNFCCC intersessional in Bonn, Germany made some encouraging progress. As negotiators gather again this week, it’s important that they build on this progress and take action on two key topics: raising ambition, and establishing core elements of the 2015 international climate action agreement.

Indeed, there’s an even greater sense of urgency since delegates met for the April intersessional. The world crossed a perilous and alarming threshold, with atmospheric carbon dioxide levels exceeding 400 ppm, a level that has not been experienced in at least 800,000 years and possibly not for millions of years. Plus, this may be the last intersessional before COP 19 in Warsaw in November. Negotiators must move forward on raising ambition and establishing the 2015 Agreement if COP 19 is to have a successful outcome.

Raising Ambition Now

The need for countries to make more ambitious emissions-reduction commitments remains self-evident—even more so, now that the world has exceeded 400 ppm of atmospheric carbon dioxide. In Bonn, negotiators are set to focus on the transformation of the energy system.

Turning Climate Action into a Reality

This post was written by Ricardo Lagos, former president of Chile and a member of the high-level advisory panel for the Climate Justice Dialogue. The Climate Justice Dialogue project is a joint initiative between WRI and the Mary Robinson Foundation-Climate Justice. This piece originally appeared on Reuters Alertnet.

Global emissions just crossed 400 parts per million, an ominous threshold for the climate. Despite this marker, there are signs of new life for international climate action, including during the recent United Nation’s climate meeting in Bonn, Germany.

It’s become abundantly clear that in order for the world to reach an international climate agreement by 2015, the usual approach isn’t going to work. World leaders need to find common ground and work toward solutions. They need to engage their citizens and infuse new passion into the issue. Climate change is not just an environmental issue – it is one of the great moral tests of our times.

In Chile, we know all too well the impacts of climate change, marked in particular by more frequent droughts and increasing water scarcity. This affects people and our economy across sectors, from agriculture and manufacturing to mining and energy. Sadly, the people most affected by climate change are the poorest and most vulnerable members of society.

In the face of this challenge, we need a new narrative that engages people and presents the issue as a social and economic story rather than as just an environmental one. We need to create a world in which people prosper but without increasing pollution. This is not a distant dream, but a real possibility.

3 Encouraging Signs of Progress from the Bonn Climate Talks

A slight breath of fresh air entered the UNFCCC climate negotiations this week in Bonn, Germany. Held in the old German parliament—which was designed to demonstrate transparency and light—the meeting took on a more open feel than the past several COPs and intersessionals.

Instead of arguing over the agenda, negotiators got down to work, discussing ways to ramp up countries’ emissions-reduction commitments now and move toward a 2015 international climate action agreement. Reaching these two goals is imperative. It was encouraging to hear delegates make progress across three key issues involved in achieving them:

1) "Spectrum of Commitments"

This idea—put forward by the United States—is that every country should determine its own national “contribution” to curbing global climate change and present it to the international community. A “spectrum” of various commitments would thus emerge, which could be included in some sort of formal agreement.

2 Big Issues to Watch at this Week’s Bonn Climate Talks

It’s been almost four months since the last UNFCCC negotiations in Doha, Qatar (COP 18). Countries decided in Doha to finalize the second commitment period of the Kyoto Protocol, wrap up a series of decisions on the Bali Action Plan, and outline a plan to establish an international climate agreement by 2015. Countries will gather this week in Bonn, Germany, for the first formal conversations since the Doha meeting.

This week’s intersessional is a low key, but important session. Negotiators will discuss two critical issues: How to substantially step-up the level of ambition by countries, companies, cities, and civil society; and how to ensure a strong international climate agreement by 2015. Progress on these two issues could bring the world one step closer to strong, international action to curb climate change.

Increasing Ambition

The final decision by all countries at COP 17 in Durban recognized that current GHG-reduction pledges are not adequate to keep global average temperature below 2 degrees C (the limit science says is necessary to prevent climate change’s most disastrous impacts). In Bonn, experts will put forth new ideas on how to ratchet up ambition in the short-term. Country representatives will also highlight best practices and success stories, in particular, the role that land use could play for enhanced mitigation and adaptation policies.

Tracking Greenhouse Gases: 3 Factors for Successful National Inventories

This blog post was co-authored with Soffia Alarcon-Diaz, an intern with WRI's Climate and Energy program.

Measuring and reporting greenhouse gas emissions (GHGs) across different sectors is no easy feat. But creating a national inventory of GHGs is one important step for countries to take toward managing them. Starting in 2014, many developing countries will begin providing more frequent updates to their national inventories under guidelines from the COP 17 Durban Platform. How can they best meet international reporting requirements and, more importantly, use the development of their national inventory systems to support domestic low-carbon growth?

In a new set of case studies (see the text box) we have documented experiences from Brazil, Colombia, India, Mexico, and South Africa—countries that have already made notable efforts to develop robust national inventory systems. Each study explores critical aspects of these countries’ inventory processes and provides lessons that could benefit other countries looking to further develop their own systems.

3 Attributes of Successful National Greenhouse Gas Inventories

Although each national inventory system is unique, the case studies reveal several common attributes of successful inventory improvement. Here are three:

Reflections on Climate Justice from Santiago, Chile

This piece was co-authored with Tara Shine, head of research and development at the Mary Robinson Foundation-Climate Justice.

We recently travelled to Santiago, Chile, a sprawling city of six million people just beyond the Andes. Our purpose was to attend the first sub-regional workshop of the Climate Justice Dialogue, a new initiative led by the World Resources Institute (WRI) and the Mary Robinson Foundation—Climate Justice (MRFCJ). But before we even made it inside the conference center, we were confronted by a poignant, real-life example of climate justice.

Upon arrival in Santiago, a taxi took us to a charming and quirky family-owned hotel. As we were welcomed at the concierge desk, we were surprised to find Chile’s Second National Communication among the tourist books and magazines.

National communications are reports submitted by countries to the United Nations Framework Convention on Climate Change (UNFCCC). They provide scientific information about national climate mitigation and adaptation measures, as well as project proposals that help increase a country’s resilience to the impacts of climate change. They’re important documents for climate negotiators and policymakers because they hold countries accountable for their commitments under the UNFCCC. They are not, however, something you would expect to find as recommended tourist literature.

We asked the hotel owner why he displayed this document so prominently . He responded with a wise smile, “Because it is important.” He then explained how climate change is already affecting Chile’s tourism industry: The retreat of Andean glaciers affects the availability of freshwater for irrigation and domestic use, mountain recreation, and for the animals and plants that depend on glacier-melt for survival. It also makes the glaciers—as well as the related fauna and flora—less accessible to tourists, affecting his revenue. He also expressed his concern over the inadequate response to climate change from the international community, the national government, and a Chilean middle class that’s engaging in unsustainable consumption patterns. He concluded that climate change is part of Chile’s current and future reality, and therefore should matter to anyone who cares about his country—including tourists.

New Blog Series Will Answer Your Questions on Climate Finance

Now is a critically important time for the world to focus on climate finance. Developing nations—those least responsible for causing global warming but most vulnerable to its impacts—need funding to adopt clean energy, protect infrastructure from sea level rise, and engage in other adaptation and mitigation strategies. But these activities are costly—the world will need to figure out how to fund them now in order to protect countries from future climate change.

The problem is that it’s hard to draw attention to a topic that’s difficult to understand. The issue of climate finance is decidedly complex. Several entities--think-tanks, banks and other financial institutions, international institutions, governments, and public sector agencies--are involved in myriad activities related to climate finance. Understanding how they operate, interact, and contribute can be confusing. Even the vocabulary that defines climate finance can be inconsistent, abstract, and nebulous at times. These complexities make climate finance an issue that’s hard for people--even experts, sometimes --to wrap their heads around.

Introducing the Climate Finance FAQs Series

That’s where WRI’s new blog series, Climate Finance FAQs, comes in. Our experts will attempt to shed light on basic climate finance issues through a series of blog posts. By explaining these topics in plain language, we can make climate finance more accessible--and hopefully, draw broader attention to the pressing issue of how to pay for climate change mitigation and adaptation.

Are Developed Nations Falling Short on Their Climate Finance Commitments?

UPDATE 4/11/13: After this blog post was published, the OECD released updated figures for 2010 and 2011. The data still shows a decrease in commitments for adaptation, mitigation, and climate finance, as this blog post states. However, adaptation expenditures were 3 percent higher in 2011 than in 2010, as opposed to unchanged. (View updated figures.) The changes in the numbers are a result of donors entering new data for previous years or updating their old data. Preliminary data for 2012 shows that aid to developing countries continued to fall. Detailed figures for 2012 will be released in June 2013.

At the 2009 U.N. climate change conference in Copenhagen, developed nations committed to provide a collective $100 billion per year by 2020 to help developing countries mitigate greenhouse gas emissions and adapt to climate change’s impacts. Recently, the Organization for Economic Co-Operation and Development (OECD) released some surprising new data on this pledge. The figures indicate that developed nations’ recent climate finance contributions have fallen rather than risen toward the level of their 2020 commitment.

A Look at the New OECD Data

The OECD is a consortium of 34 wealthy countries. Among other joint initiatives, it provides a platform to monitor and share statistics on aid flows and climate finance contributed by its members. Most OECD members report both their climate finance expenditures and commitments using the “Rio Markers” (see text box), and the OECD secretariat periodically makes these numbers public. OECD members’ climate finance contributions represent a significant portion of the collective $100 billion commitment, so the numbers reported by the OECD give a good indication of developments in the climate finance field.

Surprisingly, new OECD numbers show that while adaptation expenditures in 2011 remained the same as in 2010, expenditures for mitigation activities decreased. Plus, the total commitment for climate finance decreased from $23 billion in 2010 to $17 billion in 2011.

While a “commitment” refers to the total amount of money a country will spend on an adaptation/mitigation project over a multi-year period—which is reported at the beginning of a project—an “expenditure” refers to the amount a country spends in a particular year on adaptation/mitigation activities. In January 2013, the OECD updated its data for 2011. It is difficult, of course, to predict or analyze trends based on only two years of data (the only data that’s currently available on OECD climate finance commitments). But given developed nations’ agreement to scale up climate finance significantly by 2020, this decrease is surprising—and could be concerning.

4 Ways the Green Climate Fund Can Support "Readiness" for Climate Finance

Research shows that developing countries will need about $531 billion of additional investments in clean energy technologies each year in order to limit global temperature rise to 2° C above pre-industrial levels, thus preventing climate change’s worst impacts. While developed countries have pledged to provide $100 billion of climate finance per year, this amount is well below what’s needed to help developing nations mitigate and adapt to climate change.

So how can countries bridge this funding gap? The answer lies in part on how well developing countries implement “readiness” activities, as well how effectively developed nations and international institutions like the Green Climate Fund (GCF) can mobilize finance to support them.

The Need for Readiness

To attract investments on the scale required, developing country governments must provide an attractive investment climate—one that encourages public and private sector investors to put their money into climate-friendly projects like solar and wind energy. On their end, developed countries need to offer financial and technical support for “readiness” activities that create the right conditions for said investments. Readiness includes any activity that makes a country better positioned to attract investments in climate-friendly projects or technologies. A few examples include: developing a policy to promote energy efficiency in industry; passing a law that gives a new or existing institution the mandate to promote renewable energy; conducting an assessment of a country’s wind energy resources; or strengthening a bank’s capacity to lend to small businesses in low-carbon sectors. International institutions such as the GCF can play a big role in supporting readiness activities, thereby helping developing nations attract the investments that will help them transition onto a low-carbon, climate-resilient development path.

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