The Future is Equal

Poor countries left in the dark on climate finance

As the UN climate change talks open in Warsaw, Oxfam is calling for clear and ambitious financial commitments that will help poor countries to reduce their emissions and cope with the dangerous impacts of climate change. These commitments are a crucial building block in order to construct a global agreement by 2015.

A major problem is that murky accounting and a lack of transparency by rich countries has left the poor countries with little idea about what money is available to help them cope with climate change, according to Oxfam. There was a commitment in Copenhagen for the rich countries to scale up to climate finance of US$100 billion per year by 2020. There has been little transparency in the initial “fast start” period, and little clarity about what comes next.

The briefing “After the Fast Start: Climate Finance in 2013 and beyond” issued today by Oxfam looks at how much money the climate finance contributors have committed between 2013 – the end of the Fast Start Finance period – and 2015.

“Rich countries must make it clear how they are going to fulfil their commitments to support the poorest countries in reducing their emissions and adapting to climate change impacts,” said Oxfam New Zealand’s Executive Director, Barry Coates.

“As Oxfam’s research has shown, effective work on mitigation and adaptation requires a long term approach, and uncertainty from one year to the next makes it impossible for vulnerable countries to take action to protect their citizens and adapt to a changing climate. This murkiness over the funding available, and the terms under which it is provided, will only heighten distrust around the negotiating table,” Coates added.

Oxfam found that:

  • 24 developed countries have still not confirmed their climate finance for this year. For 2014 the situation is even worse as countries which together provided 81 per cent of Fast Start Finance, have still not announced any figures. Just one country, the UK, has announced its plans for climate finance in 2015.
  • Oxfam estimates that the total climate finance contributions so far committed by developed countries in 2013 amounts to as little as US$7.6 billion for grants and US$16.3 billion including loans. This is a fraction of what is needed to enable developing countries to adapt to climate change, which is well over US$100 billion per year.
  • By comparison, developed countries spent US$55-90 billion a year during 2005-2011 on fossil fuel subsidies; the Netherlands is spending €1 billion to protect its low-lands from flooding; Australia will spend $12 billion until 2018 on adapting to domestic water stress; and estimates for climate protection in the wake of Hurricane Sandy in the US ran to hundreds of billions of dollars for Florida state alone.
  • Rather than being additional money for climate action, much of what is being counted as climate finance is not new and additional, but has instead been redirected from overseas aid budgets.

The re-labelling of existing aid is not what was agreed in Copenhagen. The intention was not to reduce funds for urgent needs like health care and education in order to address a problem that the poorest countries did little to cause. Developed countries undertook to provide “new and additional funds” for climate change to support poor countries.

“While we welcome New Zealand government funding for renewable energy and other climate-related programmes in the Pacific and internationally, these funds should not be diverted from the existing aid allocation. New Zealand undertook to provide additional funds and this has so far not happened. Funds for urgent aid priorities in the Pacific should not be re-labelled as climate finance,” said Coates.

New Zealand has an opportunity to salvage our reputation on climate change, which has taken a battering in recent years. But it needs commitments to scale up additional climate finance together with a target for far deeper emissions reductions than the government has announced so far, supported by far stronger domestic policies,” said Coates

Internationally, the issue of climate finance is being regarded as one of the essential elements to move the negotiations forward towards a global deal in two years’ time.

“For all the rich countries at the Warsaw negotiations, greater transparency, accountability and a plan that sets out how countries will increase funding is essential. Without this fundamental building block, there will be a further loss of trust that could bury hopes for a global climate deal in 2015.

“Anything less than urgent action will mean more damaging cyclones and typhoons, more sea level rise and storm surges, more floods, more droughts and bushfires, and many more people in the poorest communities who suffer from inaction by the major polluting nations,” concluded Coates.