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Governance & Access

When it comes to overseas development finance, China is definitely a country to watch. Due to the country’s unprecedented economic growth, China’s overseas investments have increased exponentially in recent years. Between 2009 and 2010, two Chinese state-owned banks lent more money to other developing nations than the World Bank did. In fact, between 2002 and 2011, China’s outward foreign direct investment (OFDI) stock grew from $29 billion to more than $424 billion.

But what factors are driving all of this growth? What areas of the world are on the receiving end of China’s OFDI flows? And what sorts of social and environmental standards are in place for banks’ and enterprises’ investments? WRI seeks to answer these questions and provide additional background information in its recently updated slide deck, “Emerging Actors in Development Finance: A Closer Look at China’s Overseas Investment.”

A number of Latin American and Caribbean (LAC) countries recently took a huge step forward in ensuring environmental democracy for their citizens. At a UN Economic Commission for Latin America and the Caribbean (ECLAC) meeting in early November, these countries agreed on a road map to ensure full implementation of Principle 10 of the Rio Declaration.

Principle 10, otherwise known as the environmental democracy principle, affirms that all citizens have a say in the environmental and development decisions that directly impact them. In one of the few bright spots of the Rio+20 sustainable development conference this past June, 10 LAC countries—Ecuador, Chile, Costa Rica, Dominican Republic, Jamaica, Mexico, Panama, Paraguay, Peru, and Uruguay—adopted and publicly signed the Principle 10 Declaration. This month’s ECLAC meeting in Santiago, Chile marked the first gathering of Government representatives after this historic Declaration. Most importantly, governments adopted an agreed-upon road map defining a process to draft a Principle 10 Action Plan, which will be submitted for adoption in early April 2013.

Consider this blog post to have been written hastily on the back of a cocktail napkin. Not really, of course, as my handwriting is increasingly poor in this digital age. But I’m in acceptance-speech mode, as WRI just won the 2012 EthicMark Award for its environmental justice film, Sunita.

This award, which I recently accepted at the Sustainable Brands London conference, is given for advertisements that “uplift the human spirit and society.” WRI tied for first place in the non-profit category, along with Ten Thousand Villages’ fantastic film, World Fair Trade Day 2011. We at WRI are incredibly thankful to the folks who honored us with this award—the World Business Academy, Ethical Markets Media, and the University of Notre Dame’s Mendoza College of Business—and I’m thrilled to be returning to Washington, D.C. with our first-ever award for communications.

While the story of winning this award is certainly a pleasure to share, it’s nothing compared to the story of creating Sunita.

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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.

A version of this post originally appeared on The Access Initiative's blog.

The World Resources Institute, The Access Initiative, Indonesian Center for Environmental Law, and Thailand Environment Institute invite you to an online seminar on October 25, 2012. Participants will learn how citizens in Indonesia and Thailand are using their countries’ freedom of information (FOI) laws to obtain data on environmental pollution in their communities.

“Webinars like this are so important because they enable people to reflect on developing country experiences in the implementation of right to information laws for citizens,” said Carole Excell, a Senior Associate in WRI’s Governance and Access program. “We hope to challenge the perspective that right to information laws are tools used only by sophisticated organizations and talk about their utility as tools for citizens and communities.”

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The Green Climate Fund (GCF) Board wrapped up its second meeting on Saturday with a major decision: selecting Songdo City in South Korea to host the Fund. The decision, which was adopted by consensus of the Board, was greeted with joy by the Koreans, who spared no effort to provide an offer of the highest quality to earn the confidence of the Board. The UNFCCC Conference of Parties will have to endorse this decision at its next meeting in Doha later this year to confirm the selection.

The Host Country Will Play an Important Role

The GCF is expected to be instrumental in distributing the funds that will help developing nations adapt to and mitigate climate change. As the host country, South Korea now has the opportunity to play an important role in ensuring that the GCF fulfills this responsibility.

WRI’s The Access Initiative created its “Sunita” video to bring attention to the environmental injustices that countless impoverished communities face. But recently, it’s the video itself that’s getting all the attention.

The World Business Academy, Ethical Markets Media, and the University of Notre Dame’s Mendoza College of Business recently announced that “Sunita” is a finalist for the group’s prestigious “EthicMark” video award. The award honors advertisements that “uplift the human spirit and society.” “Sunita” joins a video by Ten Thousand Villages as a finalist in the non-profit category.

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The second meeting of the Green Climate Fund (GCF), the institution that’s expected to become the main global fund for climate change finance, will take place tomorrow in Songdo, Korea. While the Board will discuss several issues—everything from criteria for its executive director to hammering out a work plan—one is likely to take center stage: choosing the Fund’s host country.

Six countries are currently vying for the role: Germany (Bonn), Korea (Songdo), Mexico (Mexico City), Namibia (Windhoek), Poland (Warsaw), and Switzerland (Geneva). The decision is an important one—the appointed country will be tasked with providing a home for one of the main vehicles to help the world’s most vulnerable nations mitigate and adapt to climate change.

Addressing global climate change requires huge investments. In order to keep global temperature rise below 2 degrees Celsius and protect vulnerable communities from climate change’s impacts, experts estimate that developing countries will need between $110 and $275 billion annually to mitigate and adapt to climate change. The International Energy Agency estimates that for developing countries to transition to low carbon energy, approximately $10 trillion dollars in energy investments by 2050 is required. In addition, another $ 1.5 trillion per year will be required by 2030 for adaptation action.

Unfortunately, there’s a huge gap between the funding we have and the funding we need: According to experts, developing countries’ climate change financing needs exceed current and prospective flows by at least five to 10 times. While many policy analysts focus on the need for more money and a greater availability of technology to bridge this gap, there’s another issue that’s less talked about but equally important: investing in institutions and capacity development.

By “institutions,” I mean countries’ national structures, mechanisms, and related arrangements to effectively implement climate policy and administer climate finance, such as a national climate change commission, an inter-agency committee on climate change, a national climate change adaptation fund, or national climate change trust funds. “Investing” in these institutions means creating the necessary policy, institutional, industry, and financial conditions that can help scale up investments in climate action. Building these strong and effective institutions will also require capacity and knowledge-building.

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