The United Nations Non-Governmental Liaison Service (UN-NGLS) is an inter-agency programme of the United Nations mandated to promote and develop constructive relations between the United Nations and civil society organizations.
Climate change financing is a critical and highly debated issue in the climate change negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). Following the Climate Change Conference (COP15) in Copenhagen in December 2009, the UN Secretary-General, Ban Ki-moon, established a High-level Advisory Group on Climate Change Financing (AGF) to study “potential sources of revenue for the scaling up of new and additional resources from developed countries for financing actions in developing countries, in the spirit of the political commitments contained in the Copenhagen Accord, with a view to contributing to an appropriate decision of the UNFCCC Conference of the Parties at its 16th session in Mexico.” To feed the discussions on climate change financing in light of the negotiations as well as in relation to the work of the AGF, civil society has been producing various reports, papers, and factsheets that examine potential sources for climate change financing. These are available below in chronological order:
This article will be updated on a regular basis when more reports on climate change financing will become available.
Time to Roll Up the Sleeves − Even Higher! Longer-term climate finance after Cancun
Oxford Institute for Energy Studies, January 2011
Following the Climate Change Conference in Mexico, this brief identifies various key elements that need to be considered in the ongoing climate finance debate, particularly in the lead up to the next UNFCCC Climate Change Conference, which will take place in Durban, South Africa, in December 2011. It addresses among others the newly agreed upon "Green Climate Fund," a "Leading Group solidarity levy," and the new Standing Committee to support the governance of the UNFCCC financial mechanism.
The U.S. Role in International Climate Finance
Alliance for Climate Protection & Center for American Progress, December 2010
From Climate Finance to Financing Green Growth
Project Catalyst, 23 November 2010
This briefing paper analyses the benefits of green growth and stresses the importance of developing the right policies to support a transition towards the low carbon economy. It looks at the financing needs of green growth in developing countries, the role of the financing sources identified by AGF report and how the climate finance system should ramp up over the next decade.
A Matter of Principle(s): A Normative Framework for a Global Compact on Public Climate Finance
Heinrich Böll Stiftung North America, 12 November 2010
This paper argues that a normative framework is missing in the current climate finance debate. “There is no need to invent a new normative framework for climate finance. From human rights to environmental laws – a long list of codified rights and normative principles is available. The problem is that donors tend to lack coherency and implementation of these in their programs. There is a strong need to learn from past mistakes of development aid organizations and other actors and make sure they are not repeated or exacerbated by new public money for climate finance.”
Clearing the Air: Moving on from carbon trading to real climate solutions
Friends of the Earth, November 2010
This report outlines why carbon trading is not the solution to climate change and sets out some of the real solutions for cutting greenhouse gas emissions and delivering climate finance. It calls on national governments to urgently dedicate time and resources to develop and implement these and other more viable, equitable and effective solutions to the climate crisis.
Civil Society Letter to the AGF
8 October 2010
In this joint letter, various civil society organizations express their sincere concern that the work of the AGF might not bring the type of solutions that will truly benefit developing countries and communities living in poverty. They called upon the AGF not to limit their focus on the US $100 billion pledged for climate change financing in the Copenhagen Accord, as this amount is still inadequate to really address future climate challenges. Besides, the report should not favour private finance over public finance. According to the statement, public finance is critical and therefore the AGF must keep all public options on the table, including special drawing rights (SDRs) and financial transaction taxes.
The letter further urges the AGF not to cite the potential role of multilateral development banks (MDBs) within climate change financing as they are not seen a legitimate “channel.” Besides, the MDBs are outside the AGF’s mandate as they are not an accountable “source” of new or additional finance. “Only sources that generate new and additional money directly, and do not add to the debt burden of developing countries, should be considered.”
It also calls upon the AGF to carefully examine the reliability of carbon markets and to refrain from mentioning them as a valid source of finance for mitigation and adaptation as these markets are only means by which the developed countries fund their own efforts to meet their own mitigation commitments under the Kyoto Protocol (with the assistance of the developing countries).
This paper was endorsed by the following organizations and networks: 11.11.11; Action Aid; APRODEV; Both Ends; Campagna per la Riforma della Banca Mondiale; Eurodad; Friends of the Earth England Wales and Northern Ireland; Friends of the Earth US International Forum on Globalization Jubilee South; Jubilee South Asia Pacific Movement on Debt and Development; Pan African Climate Justice Alliance (PACJA); Sustainable Energy & Economy Network, Institute for Policy Studies; Third World Network World; Development Movement.
It provides an overview of what is happening around the issue of climate financing within the climate change negotiations, and underlines that the current financing model being advanced by developed countries – which centres on carbon markets and financial institutions outside the authority of the UNFCCC – runs counter to developed countries’ commitments under the Convention. It assesses the polluter-must-pay principle; the legitimacy of pledges made by developed countries; and examines fair sources of financing; its governance. The paper concludes with recommendations for developed countries on climate finance.
The Political Economy of Climate Finance
Christian Aid, September 2010
This paper examines the political feasibility of delivering new sources of long-term climate finance. It finds that there are a number of actions that developed countries can take immediately that will facilitate progress in the negotiations and build trust between rich and developing nations, including ensuring the honouring of earlier made commitments; setting aside part of the revenue from the auctioning of emission credits; and making decisions on the expansion of the carbon market levy and on proposals to use Special Drawing Rights.
Climate Change Finance: Providing Assistance for Vulnerable Countries
Pew Center on Global Climate Change, 27 July 2010, by Elliot Diringer
In this testimony to the Subcommittee on Asia, the Pacific and the Global Environment Committee on Foreign Affairs US House of Representatives, Elliot Diringer advocates for the Unites States to provide sustained financial support to developing countries, which according to Diringer is in the country’s national interest and an essential ingredient for a meaningful global response to the urgent challenge of climate change.
Investing in Our Future Act of 2010 (H.R. 5783) – Using a Currency Transaction Levy to Raise Resources to Address Global Health and Climate Change in Developing Countries
IPS, ActionAid International, Friends of the Earth International, RESULTS and Health Gap, 26 July 2010
This factsheet, created by the Institute for Policy Studies, ActionAid International, Friends of the Earth International, RESULTS and Health Gap argues that climate change and the lack of health care services in developing countries are urgent and under-funded crises threatening the livelihoods and security of billions of people. It therefore calls for legislation to establish a currency transaction levy (CTL), a tiny tax on currency transactions to fund global health and climate change programs and explains the CTL concept; how the levy could be collected; how it would impact the economy and the currency market; as well as proposes how generated revenues should be directed.
A Review of Public Sources for Financing Climate Adaptation and Mitigation
Johannah Bernstein Environmental Law and Policy Consulting, Preliminary Discussion Paper, 22 July 2010
This paper outlines a range of views among the civil society organizations regarding climate financing options and is intended to contribute to the work of the AGF. It provides overall feedback on the AGF’s criteria, organization and general framework for analysis; and analyzes specific concrete sources of climate finance against criteria agreed upon by the AGF and others.
Statement to the UN Secretary General’s High Level Advisory Group on Climate Finance (AGF)
Greenpeace, 12-13 July 2010
In this statement, Greenpeace argues that the work of the AGF should help governments overcome political barriers; to narrow the sources of disagreement and to restore confidence. It calls upon the AGF to bring a sense of urgency and vision to its work and to convey the moral imperatives at stake. The AGF is also urged to focus on raising sums beyond the US100 billion dollar objective.
This statement refers to the discussion paper A Review of Public Financing Sources for Climate Adaptation and Mitigation (see section on climate finance in general above). The statement reflects on the legitimacy and adequacy of the US 100 billion dollar pledge under the Copenhagen Accord; underlines the need not to include private sector funding as an additional funding source; highlights that only incremental costs of mitigation should count; demands that no loans are considered for adaptation funding; and reiterates that only public finance should be counted. The statement requests the AGF not to undermine developed countries’ obligation under the UNFCCC, nor the principle of common but differentiated responsibilities, and expresses concern regarding the lack of transparency in the work of the AGF.
Climate finance sources discussion paper 2010
IPS, Campagna per la riforme della Banca Mondiale, ActionAid, Global Alliance for Incinerator Alternatives (Gaia), Jubilee South Asia Pacific Movement on Debt & Development (APMDD), July 2010
This paper assesses seven promising climate finance revenue-raising mechanisms against the principles civil society groups believe to be important in pressing for climate justice.
One among several alternative financing mechanisms, which should be seriously considered as a source of climate change funding, is SDRs. This factsheet explains what SDRs are, and highlights three proposals, including from George Soros, the International Monetary Fund (IMF) and ActionAid, on how SDRs can be used as a source to finance climate change adaptation and mitigation.
Capitalizing on Climate: The World Bank’s Role in Climate Change & International Climate Finance
Friends of the Earth US, June 2010, by Karen Orenstein
The paper analyzes the World Bank as an agent that both causes and responds to climate change, as well as the political dynamics of the international financial institution. It notes that in particular developed countries press for international climate finance beyond 2012 to go through the World Bank, but that many developing countries and civil society organizations in the north and south believe the World Bank is ill-suited to be in charge of funding for international climate adaptation and mitigation.
Baseline for trust: defining “new and additional” climate funding
International Institute for Environment and Development (IIED), June 2010
This article argues that it is important to define a clear baseline against which developed countries’s promises of “new and additional” funding can be counted, which is currently lacking. As developed countries do not accept the baselines put forth by developing countries, the article proposes to use projections of business-as-usual development assistance as baselines for the short-term and to develop a longer-term benchmark for the provision of truly ‘new’ funds from new funding sources.
Letter by CAN International to request an open dialogue with the AGF
Climate Action Network (CAN) International, 9 June 2010
In this letter, directed to UN Secretary-General Ban Ki-moon, and the Co-Chairs of the AGF, Prime Minister Meles and Prime Minister Stoltenberg, CAN International is requesting to establish an open and structured dialogue between the Advisory Group and civil society organizations; to provide transparency on working documents; and to allow the submission of written comments on these documents, as well as on the final report of the AGF.
Climate Finance additionality: emerging definitions and their implications
Heinrich Böll Stiftuing North America & Overseas Development Institute (ODI), June 2010
This paper explores the following two main issues:
• How is additionality being defined by different political actors?
• What are the technical and political implications of these different definitions? And what do the varying definitions require in terms of tracking and the measurement, reporting and verification of finance?
Climate Finance Post-Copenhagen: The $100bn questions
Oxfam, 31 May 2010
In this briefing note, Oxfam raises the key questions that the AGF needs to tackle to ensure that sufficient and sustainable sources of finance are found. It highlights at least four critical questions about the $100bn commitment that the AGF needs to address:
• Is it enough?
• Is it new money?
• Is public or private money needed?
• Can grants or loans be used?
UN and International Financing proposals: A chronology
WWF, 15 May 2010, by Mark Lutes
In relation to the work of the AGF, this paper a series of initiatives under the UN or groups of countries to explore financing for development, health, biodiversity and other global causes. Many of these processes have looked at the same set of sources, and made similar recommendations for effective use of existing sources of financing.
Additionality of Climate Finance
World Resources Institute (WRI), May 2010
This paper addresses the concept of additionality and explains that the process of determining additionality is complicated as it is hard to know with certainty what countries would have given as development assistance under business-as-usual (BAU) in the absence of climate financial transfers. “Parties to the UNFCCC have not yet achieved consensus on a clear and specific definition of ‘additionality’ that can be applied to developed country financial pledges and transfers.”
In the paper, WWF recommends the AGF to remain focused on their core task of identifying new and additional sources of public financing; to be clear about the role of public and private finance; to take into account the range of estimates of potential costs of climate change; to ensure additionality and to avoid double counting; to provide a roadmap for implementing recommendations; to ensure centrality of the UN Framework Convention on Climate Change (UNFCCC) and to avoid duplicating the work of the principal negotiating groups of the UNFCCC.
Where’s the Money? The Status of Climate Finance Post-Copenhagen Heinrich Böll Stiftung North America, 4 March 2010
This paper examines and explains the meaning of climate finance references in the Copenhagen Accord.
A transparency agreement for international climate finance – addressing the trust deficit
Overseas Development Institute, March 2010
In this opinion piece, Neil Bird calls for a transparency agreement for international climate finance to rebuild trust among the different country blocks. He further underlines that “Channelling new financial resources quickly to countries in need is a top priority for all parties under the UNFCCC. This needs to be supported by going beyond the present set of vaguely worded principles to a coherent governance framework that would help to track and monitor funding (public, private or from new innovative sources).”
The Parameters of a Financial Transaction Tax and the OECD Global Public Good Resource Gap, 2010 – 2020
Trade Union Advisory Committee (TUAC) to the OECD, 15 February 2010
This paper, also available in French and Spanish, examines the value and parameters of a Financial Transaction Tax (FTT) in the context of enormous OECD country public resource gaps created by the financial crisis, on the one hand, and significant government commitments for financing development and climate change mitigation and adaptation measures on the other.
Copenhagen’s climate finance promise: six key questions
International Institute for Environment and Development (IIED), February 2010
This paper also takes a closer look at the climate finance references in the Copenhagen Accord and reveals six questions: (1) What are the sources of funding?; (2) Is it new and additional?; (3) Who decides?; (4) Grants or loans?; (5) How predictable?; (6)Which channels?. It concludes that all six questions call for clarity and broad agreement, as well as for transparency, oversight and evaluation.
Using Special Drawing Rights for Climate Finance
ActionAid, February 2010
This discussion paper ActionAid explores how SDRs can be used to contribute to the adaptation and mitigation needs of developing countries. It examines what SDRs are and how they have recently been used. It then puts forward a proposal for how SDRs could be used for climate finance, and discusses some broader implications of using SDRs for the global economy.
Comments on the Copenhagen Accord
South Centre, Informal Note 52, 18 January 2010
Adaptation Financing for Climate Change: Taking Account of CSO Perspectives for Aid Reform
The Reality of Aid, December 2009, by Brian Tomlinson
This report argues that a number of critical questions need to be addressed in the discussions on climate change financing in order to ensure a just and equitable UN climate agreement. These questions include: How much money is needed to finance adaptation? How will the money be counted? How will it be managed? And how can the lessons of aid and development effectiveness be applied to climate change adaptation and mitigation?
The Climate and Trade Relations: Some Issues
South Centre, November 2009, by Martin Khor
This paper analyzes the climate-trade links in the context of both the climate and the trade regimes. It provides a description of some relevant aspects of the climate regime (the UNFCCC), and examines the interface of trade, environment and climate issues in the context of the WTO. It also describes evolving concepts and policies in the developed countries on dealing with climate and trade issues; and examines the issues on intellectual property and on technology transfer in the UNFCCC, focusing also on the proposals by developing countries.
Carbon-based Competiveness, Trade and Climate Change: Perspectives of Developing Countries
South Centre, October 2009
"This paper looks at how developing countries view issues that link trade and climate change policy. It will seek to highlight views that are commonly or broadly shared by developing countries, focusing on the political and economic considerations that underlie such views."
Assessing the costs of adaptation to climate change: A review of the UNFCCC and other recent estimates
International Institute for Environment and Development (IIED), August 2009
This report illustrates the uncertainties in the UNFCCC climate cost estimates for 2030. The main reasons for under-estimation as identified in this report are that: (i) some sectors have not been included in an assessment of cost (e.g. ecosystems, energy, manufacturing, retailing, and tourism); (ii) some of those sectors which have been included have been only partially covered; and (iii) the additional costs of adaptation have sometimes been calculated as ‘climate mark-ups’ against low levels of assumed investment.
Climate Funds and Justice
The Reality of Aid, April 2009, by Paul L. Quintos
This report considers the importance of financing for climate change adaptation; the amount that is needed; current sources of financing for adaptation under the UNFCCC and their limitations; the role of the World Bank; reasons for not making the World Bank a “Climate Banker; and criteria for a just financing scheme for climate change adaptation and mitigation?
Developed Country Climate Financing Initiatives Weaken the UNFCCC
South Centre, Analytical Note, January 2009
"This analytical note looks at the level and delivery vehicles of public financing for climate change actions in developing countries from developed country Parties of the UN Framework Convention on Climate Change (i.e. the Parties listed in Annex I of the Convention). It argues that such public financing from Annex I Parties as is available falls far short of what is needed, shows preference for non-UNFCCC delivery vehicles, and is essentially double-counted as compliance by these Annex I Parties with their official development assistance (ODA) and climate financing commitments. It concludes that existing modalities under which climate financing is being provided by developed countries have the effect of weakening the UNFCCC in terms of its role as a catalyst and vehicle for climate financing that is consistent with and supports the objectives of the UNFCCC."
International Air Passenger Adaptation Levy (IAPAL): A proposal by the Group of Least Developed Countries (LDCs) within the framework of the Bali Action Plan
European Capacity Building Initiative, December 2008
“Following the very successful example of the French ‘Leading Group’ solidarity levy to combat HIV/AIDS, the LDCs Group proposes an adaptation solidarity levy on international air passengers to provide more adequate funding for adaptation activities in the poorest and most vulnerable countries and communities. In line with the French levy, the LDC Group proposal is to establish a small passenger charge for international flights − differentiated with respect to the class of travel − to raise between $8bn and $10bn annually for adaptation in the first five years of operation, and considerably more in the longer term. This will constitute a significant step towards ensuring adequate financing for developing country adaptation costs.”Archive of this section