4 Key Accountability Standards the SCF Progress Report Should Consider
In 2009, developed countries committed to jointly mobilize $100 billion annually in climate finance by 2020 to support developing countries in reducing emissions and adapting to climate change. This long-standing commitment is key to trust and solidarity between developed and developing countries, rooted in the fact that developed nations are responsible for the majority of carbon emissions since industrialization began, and generally have greater capacity to offer support.
Vexingly, we don’t really know how close this commitment is to being met, but a new report this year, developed by the Standing Committee on Finance, offers a unique opportunity for not only a clearer picture of where we stand, but where we need to go.
It’s clear the commitment has not been met yet, as the 2021 Glasgow Climate Pact acknowledged with deep regret. This is dire: Without climate finance, urgent mitigation and adaptation action is likely to stall in developing countries, deepening the suffering caused by climate change and slowing the transition to a low-carbon, climate-resilient future. The Delivery Plan produced by Canada and Germany (at the COP Presidency’s behest) signaled that the goal might be met only in 2023 and identified several areas for improvement.
Despite the importance of climate finance, holding developed countries to account for the $100 billion goal is not an easy task. The existing reporting system under the United Nations Framework Convention on Climate Change (UNFCCC) has significant limitations when trying to assess the current state of climate finance from developed to developing countries. The Standing Committee on Finance (SCF) — established under the UNFCCC to assist the COP and CMA on finance-related matters — has an opportunity to go beyond that.
Where Do We Stand on the $100 Billion Goal?
Until now there has not been an institutionalized assessment of accountability for the $100 billion goal at the UNFCCC. The Delivery Plan, which was produced outside of the formal climate negotiation process, was an ad-hoc exercise to take stock on the $100 billion goal at COP26 in November 2021 in Glasgow. In the coming years, given the current lack of trust on this matter, it is key to move from this type of accountability approach to institutionalized, stronger and transparent accountability mechanisms for climate finance — including as part of the extended Long-Term Climate Finance COP agenda item, the transition to the Enhanced Transparency Framework, and the initiation of the New Collective Quantitative Goal deliberations.
The Standing Committee on Finance has been tasked with developing a report in 2022 on the progress towards achieving the annual $100 billion goal. The mandate from COP26’s decision on long-term finance states that the SCF report must address the needs of developing countries and take into account the Delivery Plan and other relevant reports. This report will be considered at COP27 in November 2022 — the first time the SCF will have had a mandate to consider accountability for the $100 billion.
While this mandate is general, and the need is obvious, the decision does not give further guidance on the structure of the report or the sources of data inputs. This will need to be decided by the SCF itself, which will start deliberating on this matter at its meeting in spring 2022.
More than just an accounting exercise, this report should contribute to the transition into institutionalized accountability on the delivery of the $100 billion goal by developed countries.
To do so, the SCF should consider the following four accountability standards:
Transparency is key on two levels. First, the SCF report itself needs to be transparent in its methodology and procedural aspects. Second, the data used as input for the progress assessment should be transparent. To properly assess progress on the $100 billion goal there is a need for granular, country-level data on the amount and quality of climate finance provided by developed countries — an issue that has vexed prior counts.
So far it is unclear which data sources the SCF is going to use in its assessment — and one challenge lies in the timing and quality of available data. The fifth Biennial Reports — backward looking, with country-level climate finance data for 2019-2020 — will likely not yet be available as inputs. The ex-ante information provided in the first 9.5 communications, submitted in 2019, lacks quality, is difficult to aggregate and compare, and it is likely to be outdated given the climate finance pledges of developed countries in the run-up to Glasgow in 2021. In addition, the second 9.5 communications aren’t due until December 2022.
The mandate states that the report must take the Delivery Plan into account. The Delivery Plan used developed countries’ pledges and forward-looking data on climate finance which were analyzed with the support of the OECD. Although the OECD published a technical note on the methodology used, the country-level data and calculations are not transparent. The SCF, as part of the UNFCCC, will have to oblige by the principle of transparency and, preferably, use publicly available information on the provision and mobilization of climate finance.
Moreover, the report should also include data on the qualitative aspects of the $100 billion goal. For example, in the Glasgow Climate Pact developed countries are urged to at least double their climate finance provision for adaptation by 2025, in the context of achieving a balance between mitigation and adaptation finance. To assess progress on this commitment, the SCF should include data on the allocation between mitigation and adaptation finance.
2. Progress and Achievement
The SCF report should ensure ex-post and ex-ante accountability — in other words where the Delivery Plan only presented forward-looking estimates for the years 2022-2025, the SCF report should also assess whether the pledges that were put forward translated into concrete commitments and deployment of financial resources.
This means that the report should assess whether the $100 billion goal was achieved in 2020 and 2021. This should include an analysis of the progress and achievement of both quantitative and qualitative commitments, such as the scaling-up of adaptation finance, an increase in the share of grant-based finance and improved access to climate finance.
The collective commitment of developed countries to provide annual $100 billion for the years 2020-2025 is not enough to meet developing countries’ needs, but it remains — at least $600 billion total — the agreed minimum.
Therefore, to make up for the shortfall shown by the Delivery Plan, which found the $100 billion goal will not be reached in 2020, 2021 and probably 2022, developed countries will have to exceed the $100 billion goal by at least an offsetting amount in the coming years. Holding developed countries accountable on this ambition requires the SCF report to identify options on how to fill the gaps and further speed-up the delivery of high-quality climate finance.
The $100 billion goal is a collective commitment of developed countries. However, just as the collective mitigation target of the Paris Agreement — keeping global temperature rise to 1.5 degrees C (2.7 degrees F) — depends on the actions of individual countries adding up, so, too, does the collective finance goal require individual countries to contribute sufficiently to make up the total. Each developed country should provide its’ fair share towards the $100 billion goal.
The SCF report should consider matters of fairness and ways to incentivize the countries that have fallen behind in their individual contributions. There are several methodologies available to calculate fair shares and the SCF report could consider the most suitable way to assess the fair share contributions towards the $100 billion goal and even for future climate finance goals.
Accountability Will be Key in the Coming Years
2020 marked the year in which countries started to transition into the implementation phase of the Paris Agreement. Though COVID-19 upset some timelines, it was originally the year parties had to put their enhanced NDCs on the table and it was the first year developed countries needed to reach their commitment to collectively mobilize $100 billion of climate finance for developing countries. With the transition into the full implementation phase, and the urgency to rapidly scale up global efforts to adapt and mitigate, it’s crucial to simultaneously set up strong accountability mechanisms.
The SCF report provides an opportunity to enhance accountability under the UNFCCC for the $100 billion goal. It for sure will not be the last accountability moment on climate finance, as climate finance will be a key pillar in achieving ambitious climate action. Therefore, it’s crucial to go from ad-hoc accountability to institutionalized accountability frameworks. Strong accountability standards and robust modalities to apply them will be vital in the coming years — first, to ensure developed countries deliver the annual $100 billion goal, and second, to rebuild trust and set the foundation for a strong accountability framework for the New Collective Quantified Goal.