Topic: germany

The German Fast-Start Finance Contribution

Sarah Parsons — Thu, 09 May 2013 16:27:15 -0400

Summary

Industrialized countries have repeatedly committed to provide new and additional finance to help developing countries transition to low-carbon and climate-resilient growth. This assessment addresses German efforts to provide “fast start finance” (FSF) as a contribution to the pledge by developed countries to provide 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 scrutinizing how developed countries are defining, delivering, and reporting FSF.

Germany has increased climate finance in recent years and met its self-defined FSF pledge. According to the government’s FSF reporting, from 2010-2012 Germany provided a total of EUR 1.29 billion (approximately USD 1.7 billion) for climate action in developing countries that was counted towards FSF. Germany has therefore slightly exceeded its FSF pledge for the period 2010-2012. Even before the start of the FSF period, Germany was already providing significant funding for climate change-related activities in developing countries, particularly for renewable energy and energy efficiency. It therefore started from a relatively high climate finance baseline. Moreover, FSF is only a part of what the German government provides in climate-related finance for developing countries. Overall, Germany has increased delivery of international climate finance when compared to climate-related spending prior to the FSF period: In 2011, Germany committed about EUR 1.8 billion in total for climate finance, an increase from EUR 470 million in 2005.

Germany’s FSF is roughly evenly distributed be¬tween bilateral and multilateral cooperation. Out of the EUR 1.29 billion, EUR 585 million was channelled through multilateral funds. The largest single channel is the World Bank-administered Climate Technology Fund (CTF), which received EUR 375 million from Germany from 2010-2012. Substantial amounts of funding were also transferred to adaptation-related multilateral funds and the Forest Carbon Partnership Facility. Two federal ministries, the German Federal Ministry Economic Coop¬eration and Development (BMZ), and the German Federal Ministry Environment, Nature Conservation and Nuclear Safety (BMU), are responsible for the disbursement of FSF resources. Nearly half of this funding has been channelled through the German development cooperation agencies GIZ and KfW. Relatively few resources were delivered directly to developing country domestic institutions.

Germany FSF has primarily supported general mitigation (45 percent), and efforts to reduce emissions from deforestation and degradation (26 percent), while 28 percent supports adaptation. Germany aimed to provide 50 percent of its climate finance for mitigation, 33 percent for adaptation activities, and 27 percent (EUR 350 million) for REDD+. The Copenhagen Accord sought a balance between adap¬tation and mitigation (including REDD+) during the FSF period. Adaptation has received less finance than expected at the outset of the FSF period. Overall, most German FSF resources have been allocated to the regions of Africa (34 percent) and Asia (29 percent). Additionally, roughly 60 percent of all adaptation finance and 50 percent of bilateral adaptation finance has been allocated to Small Island Developing States, Least Developed Countries, and African countries.

The majority of Germany’s FSF is provided through grants. Loans are provided to the CTF, and account for about 29 percent of the overall FSF contribution. Germany is relatively transparent about its FSF. Through BMU and BMZ, the German government publishes lists of the FSF projects it supports, reporting on the recipient country, project name, project description, objective, amount, implementing agency, financial instrument, and expected project duration. It also reports to the European Commission (EC) on an annual basis. In addition, Germany has commissioned a study on lessons learned from FSF for long-term finance. However, official reporting would be strengthened through the inclusion of information on the actual disbursements and on project impact.

Germany is one of the few countries which has applied and published a specific definition of “new and additional” for its FSF. Germany only counts those funds towards FSF which were committed in addition to a 2009 baseline (as part of Official Development Assistance, or ODA, spending) and/or which are generated by new financing sources, namely the auctioning revenues under the EU ETS. Nonetheless, some of the financial resources counted as FSF were pledged before the FSF period: for example, Germany pledged finance to the CIFs in 2008, but only funding delivered from 2010 onwards was counted as FSF. All German FSF is counted towards ODA. However, Germany has yet to meet its commitment to provide 0.7 percent of its Gross National Income as ODA, and in fact its ODA contributions have recently declined. Also, Germany’s climate finance is committed in the context of a complementary commitment to scale up finance for biodiversity under the Convention on Biodiversity (CBD). It will be important to monitor reporting against both of these commitments in order to understand whether pledges have been duplicated or recycled.

Most of the projects counted towards FSF seem to have a principal or at least significant climate objective. An independent application of the Organisation for Economic Development (OECD) climate markers to the FSF projects suggests that the vast majority of projects seems to have a clear climate element, based on limited project informaiton. However, a focus on only bilateral projects reveals that the share of principally climate-driven projects may be lower than bilateral projects committed to other climate objectives. Furthermore, an assessment of the incremental climate change costs that are covered through the projects is not available.

Germany is one of the few developed countries to have committed climate finance beyond the FSF period. At COP18, Germany pledged to deliver EUR 1.8 billion in climate finance in 2013, an increase from the EUR 1.4 billion delivered in 2012.1 These funds will come from the general budget and from the “Sondervermögen Energie und Klimafonds” (“Special Energy and Climate Fund”). This separate budget structure is financed by auctioning revenues from the EU Emission Trading Scheme (EU ETS). The current low prices of carbon, however, may reduce available climate finance beyond 2012.

With regard to reporting on international climate finance, we suggest the following actions to further in¬crease transparency:

Continue to publish annual, project-level information after the close of the FSF period. Reporting systems could be updated to reflect the parameters of the new United Nations Framework Convention on Climate Change (UNFCCC) common reporting format (for example, by specifying the sectors to which funding is directed). It could also seek to improve reporting on the actual state of implementation of projects, and actual disbursement of committed funds. Therefore, Germany may explore practical options for providing some project-level information on the results of at least the larger programs funded in real time, e.g on the basis of the project reporting that is required of implementers (such as through annual or evaluation reports).
Provide additional information on which projects are funded by which ministries.
Provide more detailed financial information on projects that meet commitments to increase both climate and biodiversity finance to provide greater clarity on synergies, and assure that finance has not been double-counted. Such reporting can also be related to climate finance reporting under the OECD climate markers, in order to ensure consistency with FSF reporting.
Further strengthen and harmonize reporting and transparency standards for implementing institutions, in particular dedicated multilateral climate funds. Ger¬many can support progress to this end as a member of the governing bodies of these funds.

With regard to Germany’s international climate finance approach as a whole, we offer the following recommendations:

Continue to work to increase support for adaptation, with the goal of achieving a greater balance between adaptation and mitigation.
Explore ways to work more closely with recipient country-based institutions through its delivery of climate finance. This may need to be accompanied by capacity building support in order to increase these countries’ capacity to access such funding and use it effectively.
Explore options to ensure that increasing climate finance as part of efforts to deliver ODA does not reduce support available to help countries address development challenges as a whole. In the German case, the fact that ODA has been declining while climate finance increases at a relatively rapid rate presents a particular challenge.
Consider options to find more reliable sources of climate finance. The German climate finance approach has been largely sourced through the revenues from emission-trading. Nevertheless, there is a need for all countries to further scale-up climate finance in order to meet agreed goals of mobilising USD 100 billion from a mix of public and private sources by 2020. Options might include multilateral efforts to strengthen the EU ETS through increased EU mitigation targets, as well as the deployment of other innovative sources, such as financial transaction taxes or revenues from international transport. A clear pathway for scaling up climate finance would help create greater predictability of finance, and help generate trust and ambition in developing countries.

Delivering on the Clean Energy Economy: The Role of Policy in Developing Successful Domestic Solar and Wind Industries

Sarah Parsons — Wed, 14 Nov 2012 14:57:39 -0500

Executive Summary

Data Explorer Tool

The release of this paper is accompanied by the launch of an interactive Data Explorer Tool, which enables users to view, chart, and compare underlying data from our research.

Users can explore data for a specific country–or see how that country stacks up against others–in terms of correlating select “benefits” (manufacturing, domestic installations, and jobs) with changes in key national policies. In addition to pulling out raw data, the tool allows users to uncover the stories inside the numbers: For example, how does the growth in wind manufacturing capacity in China compare to the U.S. over the past 10 years? And what key policies were introduced in both countries over that period?

The renewable energy industry is expanding to meet the needs of a large and growing global market for clean and secure energy. This growth is likely to continue, with electricity production from non-hydro renewable energy sources expected to grow more than eight-fold from 2009 to 2035, if countries implement their existing commitments, and draw nearly US$3 trillion in investment. In this globalized industry, no single country has a monopoly on the supply chain or the opportunities to benefit from this expansion.

Competition is fierce and the industry is changing rapidly. Energy—and electricity in particular—is a highly policy dependent market, strongly shaped by regulation, incentives, and public goals. There are a number of different factors that drive policymakers to consider the development of domestic renewable energy industries including energy security, environmental considerations, providing more universal access to energy, and as an economic development opportunity. Now, many policymakers are weighing how to take advantage of improvements in the renewable energy global supply chains that include lower costs, higher quality equipment, and improved performance to deliver domestic energy more cheaply, while still nurturing and protecting domestic industries that create highly visible “green jobs.”

These two goals—creating robust and growing domestic industries and delivering affordable domestic energy—are both central to business-as-usual economic development. Doing both in the context of reducing greenhouse gas (GHG) emissions and other environmental impacts delivers on the promise of green growth in the energy sector. In nearly every country, it is politically very difficult to pursue one of these goals to the exclusion of the other. There is little political patience with using public resources to support a highly import-dependent clean energy deployment strategy, while raising energy costs, including to support domestic manufacturing or subsidize technologies, is equally politically challenging.

The renewable energy industry seems to offer opportunities to meet energy and economic development goals, but is there evidence that this promise has come to fruition? If there is, how did policymakers help deliver those results for their countries? This paper focuses on solar PV and wind industries in China, Germany, India, Japan, and the United States and provides a historical cross-country analysis, drawing from individual country cases, which aims to:

Determine which policies have been introduced to support the broader value chain—research and development(R&D), manufacturing, installation, and power generation—of the solar PV and wind industries in each country;
Track the trends in industry development in terms of size, installed capacity, jobs created (where available), and equipment prices (where available); and
Analyze how countries are finding success in both creating a healthy domestic industry and delivering low-cost, domestic clean energy.

This working paper emerges from a collaboration of five leading research institutions: World Resources Institute(WRI), Institute for Global Environmental Strategies(IGES), Öko Institut, Renmin University of China, and The Energy and Resources Institute (TERI), based in the target countries. Researchers at each institution reviewed and gathered information from domestic and international data sources to create a richly nuanced but still comparable review of the development of these industries.

The assessment attempts to uncover in particular how policymakers have cultivated successes. Countries have pursued a range of policies to accomplish these goals and there is now sufficient history in the solar PV and wind industries to begin to draw conclusions about whether countries have met their goals and what policy steps have been effective along the way.

STATEMENT: Rio+20 Wraps Up with "More of a Whimper Than a Roar"

Michael Oko — Fri, 22 Jun 2012 09:09:12 -0400

The UN Conference on Sustainable Development (Rio+20) comes to a close today. In total, more than 100 heads of state and tens of thousands of representatives from government, business, and civil society came together over two weeks to advance solutions on sustainable development in Rio de Janeiro.

[Editors’ note: You can find WRI’s experts’ analysis on specific issues and outcomes here.]

Following is statement by Manish Bapna, Acting President, World Resources Institute:

“Rio+20 closed with more of a whimper than a roar. Expectations for the conference were understandably low, but the outcomes were even more modest. The agreed upon text was simply not forceful enough to meet the environment and development challenges of our times. This was a missed opportunity to re-energize the global conversation and importantly drive greater action around sustainability.

“There were a few bright spots— the advancement of Sustainable Development Goals, support for better governance around environmental issues, and progress on sustainable transport, among others. But, still, that is not enough.

“Certainly, there are reasons why the conference fell short: economic and political crises on the global stage; the challenge of taking on complex issues; and the struggle of coming to a unanimous decision among the diverse views. These challenges are real, but they should not be an excuse for inaction.

“So then, what comes next?

“We cannot lose sight of the big picture. It would be a mistake to conflate the outcome here with what’s happening on the ground around the world. Real action is taking place on national and local levels in many countries. Just look at Germany’s shift to clean energy, Niger’s efforts to re-green its landscape, or Rio’s just launched bus rapid transit system.

“We understand the challenges. We know the solutions. What we need is to build the political will for bolder leadership.

“As we leave Rio and return to our homes around the globe, we must not give up on the vision of a more sustainable pathway. Given the urgency of the challenges, we must continue to push forward with ambitious solutions that will create a more sustainable future.”

–

Read a summary blog by Manish on where to look for key areas of progress at Rio+20.

Open Climate Network Analysis

Kevin Lustig — Thu, 17 May 2012 12:16:37 -0400

Use the list to the right to explore available analysis from the Open Climate Network »

RELEASE: Leaders Announce Global Effort to Restore 150 Million Hectares of Deforested Land

Michael Oko — Thu, 01 Sep 2011 19:54:06 -0400

New Global Restoration Council to be led by former Swedish Prime Minister Persson

A global effort to restore 150 million hectares of degraded and deforested lands by 2020 is being launched in Bonn, Germany. The announcement comes during the Bonn Challenge Ministerial Roundtable, where a select group of government officials, business leaders, and international forest experts are gathering to catalyze support for global forest and landscape restoration.

At the meeting, Göran Persson, former Prime Minister of Sweden, will propose a new Global Restoration Council to help galvanize action for forest and landscape restoration and build support to achieve The Bonn Challenge. The Council will be facilitated by the World Resources Institute (WRI) and the International Union for Conservation of Nature (IUCN).

“Restoring 150 million hectares of degraded lands represents an exciting and largely untapped opportunity to create more jobs and economic growth, while also protecting our climate,” said Prime Minister Persson, who is also a member of WRI’s board of directors. “I am delighted to be announcing this new Council to raise attention and generate action to strengthen our forests, our economies, our climate, and our lives. I look forward to working with world leaders, businesses, and other colleagues in an effort that will send a strong signal that forest and land restoration must be pursued globally.”

The Bonn Challenge builds on a new global assessment identifying that more than 2 billion hectares of the world’s deforested and degraded lands are available for restoration. This assessment, carried out by WRI, the South Dakota State University, and IUCN on behalf of the Global Partnership on Forest Landscape Restoration, nearly doubles the previous estimate, reflecting greater precision and a better understanding of the conditions needed for forests to grow.

“Forest restoration is big idea that carries many benefits. It will improve food security, enhance biodiversity, protect our climate, and generate jobs,” said Manish Bapna, interim President for WRI. “With this new 150 million hectare target– and support from leaders like Mr. Persson— we have a great opportunity to take action that will enhance the resilience of people and nature.”

Restoring 150 million hectares of land reflects a significant contribution to implementation of the Convention on Biological Diversity (CBD) Target 15 and the REDD-plus agreement of the UNFCCC. The CBD Target 15 calls for the restoration of at least 15 percent of degraded ecosystems by 2020, and the REDD-Plus goal is to slow, halt and reverse forest cover and carbon loss, including through the enhancement of forest carbon stocks.

Find maps and information behind the 2 billion hectare analysis.

Find out more about IUCN forests work.

Learn more about the Global Partnership on Forest Landscape Restoration.

PRESS STATEMENT: Bonn Climate Talks Wrap Up: More Progress Needed

Michael Oko — Fri, 17 Jun 2011 15:02:16 -0400

As climate negotiations wrapped up in Bonn, Germany, following is a statement from Jennifer Morgan, Director, Climate and Energy, the World Resources Institute:

“After a difficult start for the Bonn climate negotiations, countries finally began discussing how to implement the Cancun Agreements decided last December. However, not enough progress was made, and it will be difficult, if talks proceed at this pace, to decide the Cancun rule book by Durban. Still hanging in the air are questions about the future of the Kyoto Protocol and whether the Cancun rules will be plugged into a legally binding agreement. Durban will be the key moment when the future of the Kyoto Protocol, the detailed rules of the Cancun Agreements, and the legal character of future climate agreements should be resolved.

“To resolve these core decisions, more substantive progress and more political will is needed that we witnessed these past two weeks. The warning signs of a changing climate are all around us – and the international community needs to come together to address this looming challenge.”

Read WRI’s pre-Bonn post, here.
Read WRI’s end of week #1 post, here.