The significance of transparency and integrity in climate finance lie in a few factors that need to be prioritised and addressed at COP21.
Amalgamation of climate funds with official development assistance
Although Japan committed to provide $15bn in the First Start Fund for 2010-12, in reality it has provided only $3.8 billion in terms of “new” or “additional” of ODA (the climate “fiscal cliff,” Oxfam, November 25, 2012).
Compensation-based climate finance questioned
Industrialised countries committed to provide $60bn (0.1% of the Gross National Income) by 2016 for climate finance at a meeting in Paris on September 6 and 7. However, it is not clear whether the proposed fund will be grant as compensation or a loan.
It is a matter of grave concern that in seeing the practice of recognising loans as a source of funding from the Green Climate Fund-affected (GCF) countries, allowing and including international financial institutions (such as ADB, KfW) in the decision-making of the GCF, the affected countries are being inspired, and even forced, to take loan from the GCF.
In reality, more funds are required for implementing Sustainable Development Goals (SDGs) and tackling climate change.
A climate change related goal (Goal 13) has been identified as part of the Sustainable Development Goals Agenda for the period 2016 to 2030 in the 70th Regular Session of the UN General Assembly (UNGA 70) held from September 25 to 27.
Although industrialised countries and countries of emerging economy have given a commitment to reduce production of coal-based electricity in recognition of the fact that massive carbon emission is a major impediment to sustainable development.
In reality, OECD and countries of emerging economies, especially Japan, China, India, Russia, and Australia have invested more than $73bn in coal-based industries during 2007 and 2014. The decision of Bangladesh to establish a coal-fired power station near the Sundarbans, a natural climate protection shield for Bangladesh from all natural disasters, raises questions regarding its commitment to give priority to sustainable development and tackling climate change.
Transparency, accountability, and integrity in the upcoming Paris Agreement
There is no clear guidance to ensure transparency, accountability, and participation of citizens, especially affected people in the approval of climate projects and implementation related decision-making process, monitoring and evaluation of projects, although the participation of all stakeholders, particularly women and indigenous people, in preparing local adaptation strategies, planning and priority setting is explicitly mentioned in Article 35 of the draft Agreement of COP21.
According to the Fifth Assessment Report of IPCC, Bangladesh will experience a net increase in poverty of 15% by 2030 in a low crop productivity scenario, although the poverty rate of Bangladesh has reduced at around 26%. However, TIB analyses show that the most vulnerable areas in Bangladesh have not received priority in fund allocation during project approval from the Bangladesh Climate Change Trust Fund.
It is equally important to point out that only 86 government projects out of 236 (36%) approved by Bangladesh Climate Change Resilience Fund have been completed in the last six years.
The goal of poverty eradication in Bangladesh may become unattainable if sustainable development process is not integrated with efforts to address climate change.
The concerned authority did not take adequate initiative although TIB, through different research, reminded of the importance of ensuring transparency, accountability, fiduciary as well as environmental standard and participation of citizens in climate fund allocation, and their usage since 2011. Consequently, Bangladesh has been deprived of direct access to the fund from the GCF at the first stage of funding.
Responsibilities of Bangladesh
The prime minister was awarded the “Champions of the Earth” prize by UNEP in recognition of the efforts of the Bangladesh government as the first developing country to frame a climate change strategy and action plan and also for allocating own resources to establish climate funds and other initiatives.
This puts Bangladesh in a more responsible position to defend the rights of millions of climate victims in Bangladesh and worldwide by strongly advocating for a legally-binding global agreement in Paris.
In this respect, Bangladesh delegation should raise voice and provide efforts so that
a) a legally binding agreement is to be implemented by the industrialised countries and countries of emerging economy to limit the global temperature rise to a maximum of 2 degrees Celsius from that which prevailed in the pre-industrial era;
b) The “Polluters Pay Compensation Principle” should be incorporated in Paris Agreement and a definition of climate finance should be determined unanimously that recognises only grants as “additional” and “new” but not loans for adaptation purpose in LDCs as well as Small Island states;
c) A long-term, equitable, and need-based road map for climate finance from 2016 to 2030 should be formulated by industrialised countries for affected countries;
d) Specific steps to ensure desired pro-active disclosure of all types of reports on financial transactions by both fund providing and receiving parties in providing climate funds from the GCF and other sources by industrialised countries and countries of emerging economy should be included in the Paris Agreement;
e) The Paris Agreement should have clear clauses on the approval, use, project implementation, monitoring, verification, and evaluation of adaptation fund;
f) The Agreement should also ensure equity, transparency, efficiency, and accountability in fund management including effective participation of affected communities and civil society in these processes.
Moreover, participation of all vulnerable communities especially women, marginalised, and indigenous people should be ensured in all activities addressing climate change, and is key to expected climate resilience.
Climate change induced displaced people should be recognised as universal “natural persons” as provided in Mode 4 of the World Trade Agreement and policies should be formulated in the light of the Cancun Agreement 2010 for their rehabilitation, welfare, and economic prosperity.
Last but not the least, delegates from affected countries including Bangladesh have to maintain a strong stand against treating debts as climate funds as opposed to grants. Unless humanitarian considerations, transparency, and accountability of the highest carbon-emitting countries are ensured in the proposed Paris Accord, the actual loss due to climate change may be far worse than anticipated.