The security is in full force at the global climate talks taking place in Cancún. Negotiators are cloistered in a resort called the Moon Palace. "Official" side events are a 20-minute bus ride away. And self-organized civil society events by various social movements and grassroots organizations are even farther away—up to an hour by bus.
The geographic separation of government negotiators and organizations representing people directly affected by climate change—particularly farmers—is reflected in the actual negotiating text. While governments maneuver to set up carbon market schemes and non-binding pledges, the participants in two large marches yesterday in Cancún urged more immediate action.
Four IATP staffers, plus IATP board member Esther Penunia of the Asian Farmers Association, attended a march led by Mexican civil society groups in downtown Cancún, which included farm, labor and environmental groups from all over the world. An amazing array of signs, costumes and chants zeroed in on the main culprits of climate change: global corporations, who have exploited the world's natural resources, while at the same time steadily increasing greenhouse gas emissions. The groups also targeted international financial institutions, like the World Bank, who have helped finance multinational-led projects around the world that have continued this trend of natural resource exploitation.
Within the confines of the Moon Palace its hard to find any mention of the role of multinationals in causing climate change. Instead, they are often cited as part of solution with a variety of far-fetched technological advances and private finance schemes. If governments are serious about addressing climate change, they should listen to those who marched yesterday in the streets of Cancún, and less to multinational lobbyists who prowl the halls of the Moon Palace.
More pictures of the march, and our involvement in Cancún are on our flickr page.
At the U.N. climate talks this week in Cancún, an unfortunate trend is continuing that could have major consequences for the world's farmers. Agriculture is unique in that certain farming practices can actually sequester carbon to help address global climate change. Within the climate negotiations, governments continue to move forward on efforts to create a market for carbon sequestered by agricultural practices. But such a market would allow polluters to keep polluting and big financial firms to make a bundle.
At a press conference today in Cancún, IATP's Steve Suppan and Karen Hansen-Kuhn, along with Esther Penunia of the Asian Farmers Association, argued that the focus of climate negotiators should be on adaptation for agriculture. Farmers around the world, particularly in developing countries, are urgently in need of support to deal with the effects of climate change and transition toward more climate-resilient, sustainable practices.
You can view the full press conference here.
At the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Cancún, Mexico, governments will decide whether to expand the role that agriculture plays within global climate talks. The fate of these proposals will determine whether agriculture will be used by polluters to offset their emissions and shift the burden of greenhouse gas reduction onto developing countries. The Cancún meeting has the potential to further marginalize small-scale producers and their rights to land and livelihoods, and could also lead to perverse incentives to further intensify industrial agriculture practices.
In a new paper, Agriculture in the Climate Talks, IATP’s Shefali Sharma analyzes how agriculture and food security are treated within the UNFCCC negotiating text, covering issues around mitigation, adaptation and carbon markets. The paper is part of a series IATP has released to coincide with the U.N. climate talks in Cancún. You can find the full series, along with blog reports from IATP staff in Cancún, at: www.iatp.org/climate.
IATP's Shefali Sharma is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.
It’s the fourth day of the climate talks in Cancún and the atmosphere in the corridors is hushed. There are six bodies meeting over a two-week period here and already many of the meetings in the daily program are being limited to “parties and observer states.” This leaves most of the civil society organizations—who have travelled long distances to be here—essentially out of the negotiations. This is in contrast to other U.N. negotiations that are supposed to be open and transparent with observer organizations having opportunities to intervene and engage.
Information about what is happening in the key areas of the negotiations is not filtering out adequately. And those of us gathered here are having to resort to personal contacts in government delegations to find out what is going on. At the outset of the meeting, many government delegations also stressed that the number of simultaneous meetings had to be limited because it prevents smaller delegations from being able to participate adequately.
We already see a mushrooming of the number of meetings in the form of contact groups, informal consultations, “spinoff” groups and drafting groups taking place. This is in addition to the numerous side events that are taking place in the official NGO space several kilometers away from the negotiating halls in the Moon Palace, as well as other events outside of the officially accredited spaces. Individuals are having to shuffle from point A to B in shuttle buses as any other form of transport is unavailable along the security strip.
Those who were present in COP 15 in Copenhagen last year say that it is starting to feel as if Cancún will be a repeat of Copenhagen where more and more meetings become restricted to governments only and civil society is shut out from participating in an issue that affects all of humanity. Civil society organizations, for instance, can only meet amongst themselves in the Cancún Messe which is several kilometers away from where the actual negotiations are taking place. We are not even allowed to book meeting rooms to discuss and share information about the talks in the Moon Palace where the drama will unfold in the coming days. And because there has been so much trouble with internet facilities in the negotiating spaces, communicating by email has also proved difficult.
Moreover, though the Mexican government said that it will not repeat Copenhagen by having a select group of heads of states come to Cancún to patch together a backroom deal—it now appears that around 40 governments are being invited for the high-level segment of the talks which begin next week. There is a concern that the elements of Copenhagen’s last-minute deal called the “Copenhagen Accord,” which was instigated by President Obama and created huge fissures in the prospects of a global deal, might be pushed again in Cancún.
Civil society groups, including IATP, have raised several concerns regarding the trajectory of the talks in an open letter to the Mexican Government serving as the president of the UNFCCC conference of the parties in Cancún. The groups state, “The [Cophenhagen] Accord, produced by an exclusive group of 28 countries selected by the Danish Government, and tabled on a 'take-it-or-leave-it' basis in the final hours of the conference, is illegitimate and, even according to the U.N. climate secretariat, has no status. Scientists have confirmed that its pledges could lead to upwards of 4 degrees of warming leading to catastrophic impacts on the world's people and ecosystems and irreversible climactic change.”
Already, Japan has made strong statements wanting to end the Kyoto Protocol—a legally binding protocol under the UNFCCC, which was agreed in Japan itself. Its end would mean the end to the only legally binding treaty that obliges industrialized countries to cut their greenhouse gas emissions. If the industrialized world wants all countries to take responsibility for urgently reducing and halting the threat of climate change, they will have to take the lead in doing it back home. And doing it now. We will see how the drama unfolds in the coming days.
IATP President Jim Harkness is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.
The setting for the climate talks is truly surreal. As if to distract us from the dirty dealings going on inside the halls, our Mexican hosts have us staying along the beautiful (if over-developed) Yucatan coast. The ocean is blue, the sand is white and squadrons of Brown Pelicans and Magnificent Frigatebirds patrol the skies. There are “Iguana Crossing” signs along the side of the road, and I almost butted heads with an emissions trader this afternoon when our shuttle bus braked suddenly to allow a troop of Coatimundi to cross the road.
But Mother Nature is also onto the game. Skies have been dark and stormy, and the puddles at our feet remind us that the land we are standing on will be underwater by the end of the century because of the greed and cowardice we are witnessing from rich country governments and corporations here in Cancún.
Much of the talk in the corridors and press halls today was about Japan’s announcement yesterday that they will neither place their emissions targets under the Kyoto Protocol nor even accept a second commitment period when the current one expires in 2012. Their statement elicited a general outcry from delegates and civil society observers alike.
Speaking at a press conference this afternoon, IATP Board Member Sivan Kartha (his day job is with the Stockholm Environment Institute) debunked, point by point, Japan’s flimsy arguments for their abandonment of an agreement signed in their own ancient capital. You can watch his presentation here.
But while Japan’s move is making headlines, the global community’s collective response to climate change is under much more insidious attacks in myriad meetings and processes that are either closed to the public or deemed too arcane to be newsworthy.
A few I heard about today:
The International Emissions Trading Association (IETA) is here in force, hosting over 70 events during the two-week talks. I sat in on one of them, a press conference, and heard their new refrain, that 85 percent of funding for climate change adaptation and mitigation will “have to” come from the private sector.
The common denominators in all three examples are markets and technology, the same snake oil and lottery tickets the rich have been selling the poor for years. (The World Is Flat!) The problem is, the mystique surrounding these two ideas permeates not just the developed world, but also the mentality of elites in the global South. How much simpler our lives would be if all we had to do was wait for the climate problem to be solved not by some inconvenient redistribution of resources or change in consumption patterns, but by the Invisible Hand and the next (Bengali or Nigerian?) Thomas Edison? It is these fantasies, not the tropical drinks with umbrellas in them, which are distracting negotiators (and many large Northern NGOs) from the intellectually straightforward, but politically difficult task at hand.
The consolation in this otherwise grim tableau is that ordinary people are here as well: youth, people from faith communities, farmers, fishers, waste pickers, trade unionists, students, people from indigenous communities and grassroots greens. They want solutions from governments, but they know that they already have many of the solutions on their own farms and in their own communities, and they are here to share them. These people hope that they can make their case and be heard by their elected representatives, but know that even if all they do in Cancún is refuse to remain silent while those representatives sell them out, it will still have been worth the trouble.
IATP's Steve Suppan is blogging from Cancún, Mexico where the United Nations Framework Convention on Climate Change is being negotiated.
After the disastrous logistical organization of U.N. climate talks in Copenhagen, we prepared well to avoid similar surprises in getting to Cancún, Mexico. Nevertheless, the $40 airport taxi announced on the conference website would have been $70, if we had taken the taxi. And who knew that a five mile trip from the hotel to the conference center would take up to two hours due to security arrangements for Mexican President Felipe Calderón, who came to the Moon Palace to give an inaugural address to delegates? And there were pleasant surprises too: the hotel food, the sunset that widely surpassed the picture on the hotel website.
IATP set up its literature booth with the International Federation of Organic Agricultural Movements (IFOAM). Then we walked about to see what was in the booths of over 200 hundred organizations in the Cancún Messe, the mammoth site of myriad side events organized by governments, intergovernmental organizations and nongovernmental organizations. There are not a lot of bulletins that cover the negotiations themselves, but the Third World Network's bulletins are always worth reading. The TWN Cancún News Update for November 29 reported a big surprise for most of the government delegates.
Chair of the Long-term Cooperation Agreement (LCA), Ms. Margaret Mukahanana Sangarwe of Zimbabwe, posted on the UNFCCC website on November 24 a draft decision text that reflected the views of developed countries, but not the LCA-negotiated text that had been agreed on August 13 in Tianjin, China. For example, the posted text dropped the developing-country proposal for an international mechanism to compensate developing countries for the costs of climate change–inflicted damage. Also, developing-country proposals on adapting to climate change, finance and technology transfer were ignored or watered down.
Many delegates were still en route to Cancún for pre-meetings when the Chair posted her personal interpretation of what was needed for a successful outcome to the Cancún meetings. UNFCCC-member governments had not asked for this text and protested vigorously at the opening session that the text might be considered a substitute for the negotiated text. Mukahanana clarified today that her diplomatic note was not a formal text but her interpretation of the “possible elements” that might lead to agreement in Cancún. Still, the damage had been done: the work to overcome the bitterness about the top-down imposition of the Copenhagen Accord had been wasted by a note that reflected the accord and the interests of its proponents.
Then on November 30, Japan surprised delegates by announcing that it would never agree to new commitments to reduce greenhouse gasses under the Kyoto Protocol. Instead, it would join the United States in opting for voluntary pledges under the Copenhagen Accord, a political agreement that would not be binding on developed-country members but that would oblige developing countries to agree to international oversight of their actions to reduce greenhouse gasses. The Japanese announcement brought sharp rebuke, including from IATP board member Sivan Karthi.
IATP was not entirely surprised to discover that access to negotiating sessions has been even further reduced than what was allowed for last year's negotiations in Copenhagen, Denmark. A few table-setting sessions are open to NGO observers but negotiating sessions are not. We are going to learn what we can by talking with delegates outside of the negotiating rooms. And we'll offer advice if asked to do so. We'll go to side events to learn, e.g., about the many technical difficulties in measuring soil carbon and other terrestrial features of climate change.
And we will do some teaching and advocacy at our side event with IFOAM on December 3 and at several other NGO events. We hope to be surprised that the governments will make progress on agreeing on how to reduce greenhouse gases, how to adapt to climate change, how to pay for it, and who will pay for it and when. But it is hard to be optimistic about a good result from the Cancún negotiations for the planet and its people when the only good surprises thus far are logistical ones like the enjoyable meal we had tonight.
The United Nations two-week long meeting on climate change begins today. In Cancún, Mexico, governments will have yet another opportunity to commit to a new global action plan to save the planet. For civil society organizations like IATP it is a unique opportunity to connect with and learn from farm organizations, scientists, academics and activists from around the world. Throughout these two weeks, IATP staff will be reporting on the Cancún climate meeting—from the negotiating halls to the various civil society meetings and protests.
Today, IATP released a new series of papers focusing on challenges and solutions for agriculture and climate change. Below is our press release with links to each of the papers in the series:
Governments at Cancún climate talks need to support local solutions
IATP releases new ‘Climate and Agriculture’ series
CANCÚN, MEXICO – Governments attending the global climate talks in Cancún, which begin today, need to abandon loophole-ridden carbon markets and support bottom-up climate solutions that integrate equity, food security and democratic participation, according to the Institute for Agriculture and Trade Policy (IATP).
Today, IATP released a new series of papers focusing on agriculture and climate change. The series covers issues related to agricultural practices, climate finance and adaptation strategies. IATP is sending six staff members to the United Nations climate talks in Cancún and is hosting an official side event on climate-friendly agriculture, as well as speaking at a number of civil society workshops.
In a recent NYT opinion piece Clean Water at No Cost? Just Add Carbon Credits, Tina Rosenberg argued that one of the best ways to ensure that the world’s poorest have access to water is through carbon trading. Having spent “more than two decades reporting on social problems around the world, and where possible, exploring new models to address them,” in October 2010, Rosenberg and David Bornstein began a series, entitled Fixes, that proposes to help spread knowledge about solutions (or potential solutions) to real-world problems, and how they work.
But in this case, her solution rests on a simplistic understanding of the two central issues: the water crisis and carbon trading. There are a many of reasons for the water crisis and the large numbers of water-poor, and working through them is like peeling the layers of an onion. The most apparent reason for not having access to safe water is the lack of public financing to build a water infrastructure. So, for a while, multinational-led water privatization was promoted as the solution, with these companies leveraging the financing for building and maintaining the water infrastructure. However as the article acknowledges, “for-profit water multinationals such as Bechtel and Suez” have been critiqued “for the way they treat rural people and slum dwellers.”
These companies “have little incentive to lay pipes to reach people who are far away, and if they do, they charge very high prices.” In the absence of water infrastructure, the next best solution is decentralized water treatment systems. The article tells us about a technology that can help individuals and households clean their own water! LifeStraw, an instant micro-biological water purifier, is a “point-of-use water purification system that can filter up to 18,000 liters of water,” which is estimated to last for about three years (at the rate of 16.43 liters of purified drinking water per day). It is as simple as having a straw for an individual, or a slightly bigger "LifeStraw Family" with a spout that can be hung from the wall of a household. Point-of-use water purifiers have been called more effective compared to cleaning the original water source, especially when it comes to poorer environments.
Several U.S. government organizations including the Center for Disease Control (CDC) and the U.S. Agency for International Development (USAID), as well as Coca Cola, have been involved in the testing and promotion of this technology in a number of countries in Africa. It is understandable that the organizations would want to test it in sub-Saharan Africa where access to clean drinking water is seen as a challenge. Vestergaard Frandsen, the company that developed LifeStraw, plans to provide the technology at no cost to water poor people! So far, so good!
How would they pay for it? Vestergaard Frandsen is multinational leader in making what they call "profit for a purpose." They plan to raise money by charging those who emit greenhouse gases (GHG) in exchange for an allowance of GHG emissions, or put in simpler words, in exchange for an allowance to pollute more.
The argument goes thus: If there were no LifeStraw, poor people would have to boil their water. This would contribute to GHG emissions. Thus, access to LifeStraw potentially leads to the reduction of an activity that would have otherwise contributed to global warming. All this sounds very good, but there is a big “if” involved here. What this imagined scenario ignores is the fact that along with lack of access to water, the poor also lack access to other resources, including firewood. Boiling water is neither a common practice, nor a priority for poor households in most parts of the world. It is mainly those with easier access to resources, and the ability to spare resources for doing that additional chore who take up the practice. This has been my repeated experience across two decades of interactions with poor communities.
It is at this point that one might want to peel the next few layers: Why are our water resources polluted and depleted? Most obviously, because of several causes, including: lack of sanitation facilities; improper disposal of untreated human waste; discharge of untreated industrial effluents into rural and urban waterways that sometimes double as drinking water sources; excessive use of agrochemicals that seep into underground waters; and agricultural runoffs that pollute surface waters.
Peel once more and you come to the core of it all: Our consumption-driven economies require water-intensive, high-output agricultural and industrial production as well as energy generation, that takes water for granted. There is no doubt that technologies like LifeStraw may be necessary (and much better than, say, bottled water) in water-stressed situations, or emergencies such as floods. But it would be misplaced to fund them through carbon trading. Carbon trading has emerged as a response to our refusal to cut down or reduce actual emissions. Instead it is a mechanism to provide emitters with a cheaper option: continue with emissions by buying permits to pollute rather than incur cost to replace the GHG-emitting technology with better options. In order for carbon markets to function, there is, first, the need to create a demand for carbon credits.
As and when national governments introduce an upper limit (also known as a "cap") to allowable emissions, such a demand will be created. Companies and countries that exceed the limit—largely in the North—will need to buy credits from elsewhere—largely, the South. Second, there is the need to create carbon credits that can be bought by carbon polluters. According to current mechanisms—such as the Clean Development Mechanism (CDM)—these credits can be accrued only if the condition of "'additionality," (amongst others) is fulfilled.
For example, credits may accrue when farmers switch their practices from fossil-fuel intensive to organic, or when governments provide policy incentives to nudge a shift in consumption patterns. In both cases, if GHG emissions are less compared to what would have happened in the absence of the project, they would be eligible for carbon credits. But there are problems with such mechanisms. To begin with, they do not take existing conservation practices into account. For example, in many of the poorer regions of the world, natural farming is practiced as part of local traditions. There is also the possibility of dubious claims where carbon credits may be granted to hypothetical activities. For example, the provision of LifeStraw is expected to reduce the GHG emissions associated with the (non-existent) practice of boiling water. Additional problems associated with the carbon derivatives markets is yet another issue.
Even if problems associated with carbon trading practices and carbon markets were to be fixed, some fundamental problems would persist. First of all, when carbon credits are allocated to GHG-reduction activities, often practiced by communities and countries in the South, it is a means for passing on the responsibility of GHG reduction to those countries whose climate footprint is limited but whose climate vulnerability is high. In the case of water poor, they need finances, and are willing to carry the burden in order to have access to funds to help climate-proof their nation. Second it allows polluting communities and companies to continue with their current GHG-emitting practices at almost no cost to themselves. Thirdly, carbon trading becomes a means for generating profit from doing almost nothing, or close to nothing.
For example, when Vestergaard Frandsen provides access to clean water for free to water poor, is the company trying to fulfill their corporate responsibility? As far as I can make out, it is far from it: Vestergaard Frandsen is hoping to cash in on the possibility of emerging carbon markets. Ostensibly promoted as a win-win mechanism to reduce GHG emissions, carbon trading and carbon markets have created spaces where companies such as Vestergaard Frandsen can accrue carbon credits worth billions for themselves for claimed GHG-reduction practices. However, as my colleague Steve Suppan, an expert on carbon derivatives pointed out: “Carbon markets cannot exist without governments creating both the demand [cap] and the supply [billions of dollars of emissions permits given to industry and offset credits]; the collapse of the Chicago Climate Exchange is just more evidence of this fact.” The NYT article had him remarking: “So now carbon marketers are looking for a lifeline in water. My, what a surprise! And what a surprise that the carbon market–besotted NYT fell for this ruse!” No doubt, financial incentives should be available to continue with, or shift to, practices whose GHG-emission footprint is lower than the alternatives. But the model cannot be that of carbon trading; it has to be that of climate financing.
Similarly, adaptation funds should be made available for communities to access appropriate technology that can help meet their basic needs, like safe drinking water. At COP 16, negotiators should explore viable alternatives for climate financing that promote real solutions to real problems.
IATP's Shefali Sharma reports from The Hague where the Global Conference on Agriculture, Food Security and Climate Change has just concluded.
The closing plenary of the conference ended with a laser light show about answers to the climate change problem and its impact on agriculture. At the closing, the “Chair’s Summary” of the six-day conference was handed to the participants and speakers made references to the idea that this was a roadmap for domestic as well as international action and its implementation would depend on all that were gathered at the conference.
The outcome at The Hague, in the end, was a non-binding Chair’s summary. This is because both governments and civil society organizations raised serious concerns about the first draft of the outcome document that was distributed yesterday morning in which draft language stated, “We collectively developed the Roadmap for Action on Agriculture, Food Security […] to achieve the ‘triple win’ of improving agricultural productivity and food security […]”
Though the outcome document continued to have a “Roadmap for Action” as publicized prior to the conference, the language of the outcome document was watered down significantly from claims to a “shared understanding” to simply “Understanding the Challenges” in the final draft.
The organizers announced on Wednesday that the draft would not be a negotiated document but that inputs were welcome. Yesterday, Australia, Egypt, New Zealand, Philippines and the United States were just some of the countries cautioning that an outcome document that is not actively negotiated cannot claim to have a common vision for action. There was also a significant amount of confusion during the course of the meeting as to the intentions of such a roadmap.
A statement by 12 organizations, including IATP, responded to the first draft circulated yesterday by stating, “Those most impacted by climate change and whose livelihoods are most at risk, in particular small-scale farmers, indigenous people and women especially from developing countries, have not been present, or consulted, nor have genuinely participated in this process. A democratic and participatory process should have involved all sectors of civil society engaged on these issues in a process designed to genuinely engage and dialogue with civil society. The ‘roadmap for action’ drafted by a few cannot be claimed to have been ‘collectively developed,’ even by those present at the Conference.”
They further stated, “Our understanding of the problems and solutions differs fundamentally from the framing posed by the organizers. We believe that adaptation has to be the main priority of this conference. The agricultural challenges faced by the poorest and most vulnerable, in Africa but also in Asia, in small-island states, in Latin America, are adaptation challenges. While sustainable farming practices can provide mitigation benefits, the climate crisis is caused first and foremost by the emissions of rich countries and we reject that small farmers are meant now to take on the mitigation responsibilities of the North.” You can read the full statement here.
The second draft that was circulated this morning no longer had references to the “collective” and “shared” understanding. And the third and final draft in the afternoon made minor edits to the morning version. However, the outcome document remains a collation of a broad spectrum of ideas—none of them agreed and several of them controversial—that cover various propositions through the course of the six days of panels, side events and the ministerial roundtable.
Seventeen of the 26 pages are in the form of an annex whereby countries, intergovernmental organizations, companies and a few NGOs have listed the policies, strategies and “incentive mechanisms” they will use to carry out their vision of “climate smart” agriculture—a phrase that has been in popular use in the run up to this conference. Vietnam has offered to host a “follow-up” conference in 2012 as the outcome document claims to have created a “living Roadmap initiated during this conference.”
During the conference, the World Bank also positioned itself to expand its role into funding agriculture soil carbon sequestration projects through its BioCarbon Fund. Warren Evans, director of the Environment Division at the bank stated, “[…] for the first time, we have been able to move forward with methodologies for monitoring, reporting and verifying soil carbon sequestration from improved agronomic practices […]. This is particularly important because all of us here today want agriculture and soil carbon to be formally eligible for carbon payment in future climate agreements.”
A second major initiative that was announced today was the Commission on Sustainable Agriculture and Climate Change which will be launched by the Climate Change Agriculture and Food Security Program of the CGIAR and Earth System Science Partnership. The initiative is being supported by the Global Donor Platform for Rural Development. The initiative hopes to have a panel of nine senior scientists to act as commissioners. The commission would begin in early 2011 and aims to deliver “a clear set of findings” and policy recommendations on agriculture and climate change to feed into such processes as the UNFCCC COP17 and Rio +20 Earth Summit.
The U.N. High-level Advisory Group on Climate Change Financing (AGF) released their report today, outlining a series of recommendations on one of the most controversial elements of the global climate negotiations. Everyone agrees that money must be raised to help developing countries both adapt to the effects of climate change as well as reduce greenhouse gas emissions. But how much money, where the money comes from, and who controls it, are all stumbling blocks in the climate negotiations.
Last month, IATP and 25 other civil society groups wrote the AGF, calling for public finance options, including a financial transaction tax, to be given a priority over private finance options that depend on volatile and unreliable carbon markets. IATP's Steve Suppan wrote a paper last month outlining concerns with carbon markets as a reliable source of climate financing. Below is the press release issued today by civil society groups in response to the AGF report:
UN Advisory Group on Climate Finance Report Falls Flat
Recommendations Downplay Role of Public Finance, Rely Too Much on Private Finance
A new report on climate change financing options released today by a U.N. Advisory Group unwisely emphasizes carbon markets and other private finance options, while irresponsibly advocating an increased role for multilateral development banks (MDBs). Despite concluding that public sources of climate finance are available and promising, the report’s findings downplay the role that public finance can and must play in helping developing countries deal with climate change.
The U.N. Secretary General’s High-level Advisory Group on Climate Change Financing (AGF) issued its report today ahead of the annual U.N. climate summit in Cancún that begins November 29. The report outlines a number of public and private options to raise money to help developing countries adapt to the impacts of climate change and reduce greenhouse gas emissions.
“The AGF recommendations are unfortunately based on unduly optimistic econometric projections and a blind faith in the capacity of highly volatile and unreliable carbon price signals to induce long-term investments in low carbon energy production and manufacturing,” said Steve Suppan of the Institute for Agriculture and Trade Policy. “A better start on climate finance would be for developed countries to make good on their $30 billion pledge for immediate funding to allow developing countries to adapt agricultural production and water management systems to the imminent ravages of climate change.”
“It was inappropriate for the AGF Report to make reference to the role of multilateral development banks. MDBs are not a source of climate finance, but are used as a channel. And they are not acceptable even as a channel. MDBs are a part of the climate problem, not the solution. The World Bank and other MDBs are far, far more adept at causing climate pollution than in helping countries to mitigate or adapt to it. Using MDBs as a channel would also mean climate finance in the form of loans or other debt-creating instruments,” said Lidy Nacpill of Jubilee South – Asia/Pacific Movement on Debt and Development.
“Adaptation funding, in particular, is compensation for damages done by developed countries and should only be given in grants. It is untenable that the AGF suggests otherwise. The enormous costs of dealing with climate change must not add to the already heavy debt burdens experienced by many developing countries,” added Nacpil.
“The AGF report—as limited in scope and conservative in its estimates as it is—still shows that there are numerous viable options to generate public finance for climate change,” said Ilana Solomon of ActionAid USA. “Developed countries have no excuse for inaction. The options are there. They must work through the U.N. Framework Convention on Climate Change to come to agreement on a combination of public sources to generate the desperately needed resources to help developing countries confront climate change."
“The AGF acknowledges that meeting the needs of developing countries will take a ‘systemic approach’ to financing climate adaptation and mitigation,” noted Janet Redman, co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies. “Options like a financial transaction tax meet the mark: stabilizing the economy by curbing dangerous speculation and raising hundreds of billions of dollars each year for global public goods like combating climate change. The AGF is undercutting its own mission by underestimating the revenue generated by a feasible and popular source of public finance."
The groups expressed concern that the AGF was guided by a pledge developed countries made in Copenhagen to mobilize $100 billion per year by 2020 in public and private finance—a pledge which falls short of reasonable estimates of climate financing.
“The $100 billion is an arbitrary, political figure that is based neither on need nor on equity. If the U.S. government rapidly mobilized trillions to bail out Wall Street, why cannot at least equal effort be put toward bailing out the planet from a climate crisis that rich countries caused?” said Karen Orenstein of Friends of the Earth U.S.
In October, at the global climate talks in Tianjin, more than 25 civil society organizations sent a letter to the co-chairs of the AGF outlining their recommendations for climate finance.
ActionAid USA, Friends of the Earth U.S., Institute for Agriculture and Trade Policy, Institute for Policy Studies, Jubilee South – Asia/Pacific Movement on Debt and Development.