‘Don’t leave this to your children’: could climate finance unlock a deal on Climate Change?

Just back from the Doha climate talks, Oxfam’s Campaigns and Policy Director Phil Bloomer discusses the tensions and relative climate change records of rich and poor country governments.

The UN summit on climate change in Doha this week is entering the end game, amidst increasing frustration from all sides at the glacial pace of negotiations (and this glacier shows no signs of melting).

Amidst the rancour, Professor Nick Stern, perhaps the leading thinker on climate action and negotiations, has thrown a huge challenge into the talks, by explaining the ‘brutal arithmetic’ of our greenhouse gas emissions. To stay below an average global temperature rise of 2C, “stronger action will be required from developing countries, even if developed countries reduce their emissions to zero by 2030”. Stern goes on to say that in the interests both of fairness and getting results, developing countries’ efforts will have to be supported by rich countries’ know-how, technology, and finance.

This really matters: equity (let’s just call it fairness) is not a barrier to ambition in the talks, but rather its enabler. Rich countries’ willingness to support developing countries’ shift to low carbon development, and their adaptation to the climate change that already threatens poor people’s lives and livelihoods, is key to unlocking higher ambition from all countries. Ambition for emission cuts and equity are two sides of the same coin. The failure to grasp this at the talks in Copenhagen in 2009, led to that failure. We cannot let it destroy Doha too.

But the Doha talks look dangerously mired on this. Developing countries are facing their own financial cliff this month, when three years of $30 billion in ‘Fast-Start Financing’ for emissions reduction and adaptation come to an end. This was mostly not ‘new and additional’ money (as was the promise), but mainly diverted from aid funds to ‘climate finance’. But at least it was reasonably predictable. Developing countries now find that rich countries are refusing to recommit to scaling up this funding, preferring broad assurances that bilateral climate finance will ‘continue’ (not necessarily ‘increase’). The UK is an honourable exception to this, pledging £1.8bn over the next two years. This reluctance may be understandable in a recession, but there are innovative sources of finance like the financial transaction tax, a tax on aviation and shipping, or closing tax loopholes and havens, which could raise billions, were they to be implemented.

Despite this lack of finance, developing countries are not standing around waiting for our cash before acting: the Stockholm Environment Institute calculates that the developing countries’ pledges to reduce greenhouse gas emissions are already larger in absolute terms than rich countries’ promises. This extraordinary disparity looks set to be reinforced at Doha as the rich countries refuse to join an extended climate change agreement (USA, Canada, Russia, New Zealand and Japan), or improve on their lowly targets for reducing emissions (the US has said no further action should be expected before 2020) or only promise reductions they have effectively already achieved, partly through the economic recession (EU).

Meanwhile the least developed countries’ main concern is supporting their vulnerable citizens to adapt to climate change that is already wreaking havoc through increased droughts, floods and temperature extremes. This needs finance. As Yvette Abrahams, an Oxfam partner from South Africa, said to rich country negotiators in Doha: “My family is meeting this Christmas to discuss moving (from our ancestral land). We cannot stay, as the heat has stopped the grass growing, and there will be nothing to feed our livestock. So the very little we have managed to preserve through slavery, colonialism and apartheid, we are about to lose to climate change. That is why we do not understand why climate finance is so difficult to deal with (in these talks). What I have paid is all I have. Whatever it is your ancestors have done, I appeal to you to not leave this to your children.”

Stern calls for the principle of ‘equitable access to sustainable development’ to replace the vested interests, zero sum games, and redlines that currently paralyse the negotiations. Every country, and especially the high emitters, will have to take on higher targets if we are to avoid runaway climate change. The question is whether that will be done fairly or not. This is a collective action challenge like no other and we need collective and fair action. We need to hang together or, assuredly, we will hang apart.

Science Girl; Starbucks and tax; NYC carbon; adaptation in America: videos I liked

Some Friday video light relief (well, light-ish) on climate change (with an eye on dismal dialogues in Doha) and tax evasion.

First the totally adorable Science Girl on climate change, clean energy + a surprise upside – wildfires melt Barbie & Ken before your very eyes

Next up, a sweet and funny Starbucks tax sting – two Welsh Activists decide it should return its 28% tax dodge to its customers. Background here

If greenhouse gases were visible, would it be easier to persuade publics and politicians to take them seriously? This smart video from New York City suggests the answer is yes. [h/t John Magrath]

Finally, climate change adaptation in America. Vicki Arroyo from the Georgetown Climate Center in a rather disturbing TED talk. Makes you wonder if some kind of climate survivalism is on the way

Climate change: which countries are most at risk? Click on this interactive map to find out

David Wheeler at CGD has updated his interactive map of climate risk (this is the link for the interactive map, not the screen grab picture to the right – no point in clicking on that). This covers 169 countries,  across four dimensions: Extreme Weather, Sea Level Rise, Agricultural Productivity Loss and Overall. In the overall category, China comes out as the most at risk country in the world, followed by India, Bangladesh, the Philippines and Vietnam. That helps explain the upsurge in interest in the issue in China and other G20 emerging countries, where public concern has overtaken that in the developed countries.

Surprisingly, several Arab states, such as Saudi Arabia and Libya, emerge as the least at-risk countries, with Egypt the safest of all. I guess this refers to levels of risk before considering the country’s adaptive capacity, otherwise you would expect more developed countries to head the list. i.e. the difference between risk and resilience.

Here’s CGD’s blurb:

“The maps draw upon a comprehensive new dataset described in a new working paper, ‘Quantifying Vulnerability to Climate Change: Implications for Adaptation Assistance’.

The dataset is the first to cover the entire world: 233 countries and other political jurisdictions. The paper presents a methodology for aid donors and others to craft cost-effective assistance for climate adaptation which can be applied consistently to all 233 states and all three problems, or to any subset.

The map displays color-coded rankings for 169 of the 233 states. Small islands, which are very highly vulnerable to sea level rise, and other small jurisdictions cannot be displayed on a map of this resolution but are nonetheless included in the paper and dataset.
The paper presents two sample applications of the data: assistance for 20 small, poor island states to adapt to sea-level rise and general assistance for all low-income countries to adapt to extreme weather changes, sea-level rise, and reduced agricultural productivity.”

Climate Change links I liked: Adaptation – the Economist, the Guardian and some good news from Burkina Faso and Kenya; Indian environmentalism; extreme LDC weather; a tribunal in Bangladesh; and an Advisory Group that doesn’t advise,

A random round-up of climate change links to coincide with this week’s UN gabfest in Cancún

An excellent overview on climate change adaptation from The Economist. Favourite quote? ‘The best starting point for adaptation is to be rich’.

“The environmental issue in India has been seen to be largely an upper-middle class elitist issue. I believe that a larger number of Indians are actually concerned about the environment than we give credit.” Jairam Ramesh, India’s pugnacious environment minister talks to the Guardian en route to Cancun.

According to UNCTAD’s new Least Developed Countries Report 2010 (Climate Change section starts on page 125), ‘there has been an increase in the frequency and intensity of extreme weather events in lesser developed countries, with five times as many incidents occurring from 2000-2010 as during the 1970s’ (see graph).

And a Guardian adaptation podcast brings together the paper’s John Vidal, Davyth Stewart from Global Witness, and Saleemul Huq, (International Institute for Environment and Development)

Proud Dad slot. Son Finlay writing about the recent climate change tribunal in Bangladesh

Simon Maxwell is disappointed by the High Level Advisory Group on Climate Change Financing, which seems to have failed to offer much in the way of advice……

And finally, some good news on climate change – we’ll probably need it by the end of this week: farmers restoring soils, reforesting and improving water management in Burkina Faso and Kenya (but be warned, you have to get past the irritatingly patronizing voice-over, which sounds like a 1950s Pathe newsreel)

Jasmine Rice in the Weeping Plain: successful adaptation to climate change

Lured by its wonderful title, I’ve just been reading a new briefing about some successful adaptation work in Northeast Thailand. Here’s a summary:

In 2007, farmers in Yasothorn Province, north-east Thailand, experienced the longest dry spell during a rainy season in decades. Yasothorn, one of the 10 poorest provinces in the country, is part of the ‘Weeping Plain’ named after its barren landscape. The Plain’s dry conditions have made it suitable for growing the world-famous fragrant jasmine rice.

The drought was part of a trend. Rainfall records for Yasothorn show that the rains are arriving later and later each year, from a few days late to many weeks. The cause is (at least partly) rising temperatures and changes in rainfall patterns caused by climate change.

Oxfam has been working with local organisation Earth Net Foundation (ENF) since 2004, promoting organic agricultural production and fair-trade marketing with farmers in Yasothorn Province. The growing climate crisis in the region prompted staff to take action. In consultation with farming communities and ENF, it decided to implement an initial one-year pilot climate-change adaptation project (May 2008 – March 2009). Fifty-seven out of the 509 organic-farming households decided to join the scheme. Here’s how it worked:

1. Participants received full information on the state of climate change in Yasothorn, and then shared ideas about how they could adapt their farming practices, and designed their own on-farm water-management systems (e.g. storage ponds, wells, ditches, sprinkler systems, pumps).

2. ENF established a fund to provide loans of up to 30,000 baht (US$ 880) to each household, to help them build the water-management systems.

3. Farmers, especially women, grew vegetables and planted fruit trees as alternative crops,

4. Female and male farmers who took part in the project spread the word to non-participating neighbours

Results? As expected and feared, 2008 saw Yasothorn hit by drought – the ‘worst in 57 years’, according to one village elder. Excessive rainfall then drowned much of the remaining crops at harvest time.

Even so, after harvesting it was found that all 57 project households were more food secure than they had been before the start of the project one year earlier. Of the rice, vegetables, meat, and fruits consumed, more than 90 per cent was grown by the families, and less than 10 per cent purchased from outside.

Because of the drought, the project farms’ overall rice production fell by almost 16 per cent – but it was worse on the organic farms that did not take part in the project, whose production fell by 40 per cent overall. Outside the programme, their chemical-intensive (non-organic) counterparts fared worst of all, suffering losses of 50–90 per cent in 2008, probably because organic fields can retain more moisture.

The fruit and vegetables were (partly) sold at local markets, earning around 500–1,500 baht (US$ 15–40) a week.

Lessons learned? Combining climate change adaptation with organic farming can make a big difference, especially if you:
- make sure male and female farmers participate in all stages of project design and implementation
- use scientific data, where available, to help understand and respond to the situation
- back up ideas with loans of suitable size and repayment schedule

The project team concluded: ‘However, to achieve large-scale success, government and the public sector need to provide financing and resources so that climate adaptation methodology can be adopted on a bigger scale’ and are now talking to local authorities to try and get backing for an expanded phase 2 of the project.

In this case at least, adaptation is basically good development – speeded up and expanded to match the new urgency created by climate change.

Here’s a previous post on organics and climate change, and here’s a 6 minute video about the project

Cash for Climate: how the financing numbers break down

Cash will be king in the next few months as the crescendo of climate change negotiations builds to the big December summit in Copenhagen. In the words of Alf Wills, a South African negotiator, ‘no money, no deal’ (although European Commission President José Manuel Barroso is also credited with the soundbite). If developing countries are going to get anything like justice in any deal, they need big money to help them to adapt to climate changes not of their own making, and just as much funding if they are to shift to a low carbon economy fast enough to stop the planet from overheating. Some obvious questions: How much? Where from? How will it be administered?

How much? For adaptation, Oxfam estimates $50bn extra per year now, but rising to what could be several times more as both the impact and our understanding of the required responses grows; the World Bank puts it at $75bn. Mitigation is also an expensive affair – nothing less than a mass planet-wide low carbon conversion of the developing world’s energy, agriculture and infrastructure systems. The World Bank reckons that will cost $400bn a year by 2030 (compared to current financing of some $8bn a year up to 2012 – bit of scaling up to do there). As a point of comparison, the global aid budget comes to about $100bn a year.

Where’s it going to come from? One of the touchiest issues is how much, if any, of this money should come out of aid budgets. The argument for doing so is that a lot of good adaptation (reducing vulnerability to disasters, investing in agriculture) is just good (albeit accelerated) development work. The argument against is that this is a new, additional problem that poor countries have to deal with, not of their own making, so how can you ask them to forego schools and clinics to deal with it? India is already spending nearly three times as much on adapting to climate change as it does on health, while the World Bank said in this year’s World Development Report, released yesterday, that “Already, policy makers in some developing countries note that more of their development budget is diverted to cope with weather-related emergencies.”
 
Cannibalising $50bn per year of aid commitments to pay for adaptation could mean something of the order of 8.6 million fewer people receiving treatment for HIV and AIDS, 4.5 million extra child deaths, and 75 million fewer children in school in 2010 than could otherwise have been the case. The UK government’s attempt at a compromise is to put a ceiling of 10% of its aid that can be counted as adaptation finance. Oxfam, by contrast, fears that this could merely be the thin end of the wedge, and is arguing that international accounting rules should be amended specifically to bar counting adaptation finance as aid. And governments certainly shouldn’t be allowed to get away with double counting the same money as both aid and adaptation finance (as they have done with debt relief and aid, for example).

If cash is not to come from aid budgets, then we are into ‘innovative financing’ territory, looking at taxes and levies on everything from currency transactions to carbon and carbon trading to arms deals. The French government seems the keenest on these mechanisms, which have definitely ceased to be the sole domain of the lunatic (read NGO) fringe, and are entering the mainstream. German Finance Minister Peer Steinbrück last week proposed such a 0.005% tax on all financial transactions by banks, insurance companies and investment funds – so even wider than the Tobin Tax on currency transactions (admittedly, Steinbrück wants to use the tax to claw back the costs of the financial crisis rescue packages, but the principle is the same).

And how is the money to be channelled? Here the real fear is that the climate change process seems to have learned almost nothing from the chaotic mess that is the aid industry, whose vast numbers of donors and dedicated ‘vertical funds’ (90 on health alone) make life a reporting nightmare for understaffed developing country administrations. 20 different bilateral and multilateral climate change funds are already proposed or in operation. And adaptation finance shows every sign of failing on other issues familiar from the aid debate, like transparency, accountability and developing country ownership. Countries need to be thinking about introducing a single recipient fund with democratic representation in governance, as Bangladesh seems to be doing.

Another issue is predictability. If poor country governments are to make the major, long-term investments that are required, they need a guarantee that the aid spigot will not suddenly run dry. Aid has proved a fickle source of finance in the past. So what will happen to rich countries that renege on their pledges? Perhaps climate change needs something on a par with the WTO’s dispute settlement procedure – for example a compliance mechanism, in which default is penalised by withholding a corresponding number of emissions rights in the following year, which would instead be auctioned to make up the difference.

For more on adaptation financing, see ‘Beyond Aid’, Oxfam’s new briefing paper, published today.

Update: October 09: the World Bank team at the Bangkok climate change meeting has released new estimates on adaptation financing, calculating that developing countries will need $75-100bn per year on average from 2010-2050.

How the economic meltdown and climate change are hitting Asia – new reports

The Asian Development Bank produces a remarkable amount of frequently high quality analysis. Here are two recent examples on climate change and the impact of the economic meltdown.

On the meltdown, a recent ADB Economic Working Paper uses the latest national projections for growth and past poverty performance to refine the predicts that poverty across the whole of Asia will rise by 62m people in 2009 and 100m in 2010. Read More …

What happens if the climate change talks fail? Botswana bakes, Shanghai submerges etc

For a chilling view of what is at stake in the climate change talks that culminate at Copenhagen this December, read a new report from the UK Institution of Mechanical Engineers (thanks to Cat Pettengell for pointing it out). (A similar doomsday tone is conveyed in the latest New Scientist cover story on what the world would look like with a 4 degrees temperature rise.)

The IME report’s rather defeatist point of departure is that we are unlikely to be far more successful at curbing our CO2 emissions in the near future than we have been over the past decade or so. What would this mean?

· Average global temperature rises of about 5 degrees Celsius by the start of the next century, rising to 8 degrees by the middle of the 23rd century (see chart)
· Sea level rises of 0.5m by the end of the 21st century and of 1.5m by the end of the 22nd and then further rises Read More …

What needs to happen in the climate change talks in Poznan?

Two new Oxfam papers set the scene for the climate change talks getting under way in Poznan this week. ‘Climate, Poverty and Justice’gives an overview, while ‘Turning Carbon into Gold’ crunches some numbers on how to raise the kinds of amounts needed to finance adaptation to climate change in developing countries. Read More …

Meltdowns compared: Financial v Climate Crises

Some highlights from a thought-provoking exchange with my colleague Sarah Best, who works on private sector and climate change issues.

Similar causes
· The roots of the financial crisis lie in a failure to properly assess risk (e.g. of sub-prime loans), an absence of proper oversight and regulation (e.g. of complex financial instruments) and consumption beyond our needs (e.g. credit, mortgages).  The causes of the climate crisis are similar: decision-makers still do not properly understand the climate risks and what it means for people and planet.  Rules for capping emissions and incentivising greener technology are absent or weak.  We have been using up carbon reserves at an unsustainable rate – getting deeper and deeper into nature’s debt. Read More …