Data challenges and constraints have made it difficult for the Organization for Economic Cooperation and Development (OECD) to fully report on the progress wealthy countries have made in financing climate action in developing countries, according to a report released in advance of COP21 to increase transparency before the meeting in Paris.
A key objective of the COP21 climate change conference is the financing of $100 billion per year by developed countries, from public and private sources, by 2020.
The goal is to enable developing countries to combat climate change through mitigation and adaptation while also promoting fair and sustainable development. Mitigation is trying to reduce a particular emissions problem; adaptation is maintaining resilience despite lingering climate effects that could not be mitigated.
The Peruvian and French governments requested the accounting as part of their responsibilities as the current and incoming presidencies of the COP. The report released Oct. 7 estimates that the fund reached $61.8 billion in 2014, up from $52.2 billion in 2013, but the numbers are based on best estimates. They also exclude high-efficiency coal projects, which countries like Japan and Australia argue should be considered a form of climate finance.
Last year, the Green Climate Fund (GCF) was created as the main vehicle to meet the pledge, but it was not considered for this report due to its infancy. The report’s overall consistent coverage was based on estimates of public funding through multilateral development banks (MDBs) and development finance institutions (DFIs) more so than for private finance. A large share of the rise from 2013 to 2014 was due to a substantial increase in outflows from MDBs.
Because some countries are providing direct support to developing countries through private funding schemes and the multitude of financing schemes being implemented, there is no clear accounting methodology defined for tracking all of the data.
Despite some progress having been made, risks of double counting and inappropriate attributions of finance have complicated efforts. These complications as well as the lack of full transparency compelled data reporters to characterize findings as a “snap-shot of climate finance.”
Economics Over Climate
In the instances where countries are forging ahead with their own private financing schemes, climate data may be limited because dollars are largely being spent on economic development rather than direct climate action.
In New Zealand, a Catholic agency conducted its own assessment of how that country’s climate dollars are being spent and concluded that not enough was being allocated to climate mitigation and adaptation.
Caritas Aotearoa New Zealand stated in a report released Oct. 5 that it would take US$600 billion to $1.5 trillion per year for mitigation and adaptation in poorer countries, citing the CIDSE, an international network of Catholic development agencies. It accuses the New Zealand Aid Program to the Pacific Islands of mischaracterizing climate spending.
For example, the program allotted NZ$21,000 (US$14,044) of aid to a second jetty for cruise ships in the Cook Islands, and more than NZ$5.5 million (US$3.7 million) toward rehabilitation of three runways in the Solomon Islands as climate adaptation measures. While these projects help the local economies, they fail to directly address erosion of coastlines and loss of food or water, says the report.
Caritas concludes that half the allocated climate funding between 2012 and 2015 was spent on usual types of development and damage repair.
And while the agency admits there are climate considerations for developing fisheries or transportation, it says the problem is that these activities are deemed more significant so more funding goes toward development, “rather than actively building for a low-carbon, climate resilient future.”
It believes the problem stems from the fact that “priorities and needs have been largely driven by overseas donors and targeted funds, rather than needs on the ground.”
In spite of the mixed definitions, Caritas reports that New Zealand spent $90.34 million between 2010 and 2013 on water security, energy security, and disaster resilience for communities and infrastructure in the Pacific. The government reported 40 percent of its funding went to adaptation activities, and just over half to the small island states and least-developed countries of the Pacific.
Since then, its annual climate funding has risen to about NZ$55 million–$60 million (US$36.6 million–$40 million) a year. The report tracked New Zealand’s 2013–2014 funding through the International Aid Transparency Initiative, a voluntary, multi-stakeholder initiative that seeks to improve the transparency of aid.
Caritas urges higher funding increases year over year given the extent of the climate problems in the Pacific.
UPDATE: In response to the OECD report, Caritas stated in a press release Friday that it is encouraged by the increase in finance for climate change mitigation and adaptation from a range of sources, but notes that adaptation is not being given high priority with only 16 percent of the funds going toward it, which does little to help vulnerable communities.
“The international community needs to ensure that climate finance commitments made at Paris are not just about the quantity of funds committed, but also how they can be targeted towards the most urgent needs of the most vulnerable communities,” it said.