The 23rd Conference of Parties (COP) of the United Nations Framework on Climate Change (UNFCC) will be held in the German city Bonn from November 6-17, 2017.
Under the Presidency of Fiji, an island state, COP23 would focus on developing, in line with the Paris Agreement, to build its architecture and regime, eg modalities/guidelines, that would be finalised in 2018 for implementation of the Agreement after 2020.
However, the global demand for the Paris Agreement to be legally-binding also didn’t happen, thus ensuring transparency of Parties became optional, which will make it difficult for vulnerable LDCs to access grant-based public finance.
LDCs like Bangladesh are facing difficulties in accessing the required amount of resources from climate funds as industrialised countries are not fulfilling their commitments made during the Rio Convention.
In the absence of clarity on the ratio of adaptation versus mitigation, and the interpretation on issues like “new” and “additional” grants or loans, the implementation of the “Roadmap for $100 billion” per year by 2020 promised by developed countries has come to be at the mercy of their whim.
While developing countries’ need is estimated to be $3.5 trillion by 2030 to curb climate change impacts, against which altogether only $18 billion will be made available by 2020 from public sources of the developed countries.
Moreover, among the approved funds from the Green Climate Finance (GCF), only 32% has been allocated for adaptation in vulnerable countries.
Developed countries must meet their pledges to provide the climate funds and shall apply robust and transparent accounting for avoiding double counting
It is important to continue to mobilise ODA for poverty reduction to meet the SDGs, and also to adopt a time-bound and credible Roadmap along with an implementation plan for mobilising the committed new and additional climate finance consideration of the “Polluters Pay (Compensation)” principle that recognises only public grants only, not loans.
In addition, there is a need to adopt rules to ensure a 50:50 balance for adaptation and mitigation in finance, especially from the Green Climate Fund.
Several vulnerable countries including Bangladesh are slow in meeting stringent fiduciary, environmental, and other standards for direct access to the GCF. Although private entities in Bangladesh like PKSF and IDCOL received accreditation as NIEs, GCF is yet to release funds to 43 approved projects in the country, including the Climate-Resilient Infrastructure Mainstreaming (CRIM) project that was approved on November 6, 2015.
The GCF has not provided an explanation for this unwarranted delay.
Consistent with its mandate and commitment to facilitate promotion of transparency and accountability in climate finance governance, Transparency International Bangladesh (TIB) sought the information from the GCF; what is the reason behind the 23 month delay, whether a pro-active disclosure policy exists, whether there is any policy or procedure to compensate for potential loss in terms of opportunity costs incurred by the target people as a result of any delays.
Article 13 of the Paris Agreement established that the Transparency Framework was designed to promote transparency, accuracy, completeness, consistency and comparability of both demand and supply sides.
However, the Adaptation Finance Transparency Gap Report 2016 by Adaptation Watch has identified that: “Countries are not being adequately transparent in their reporting of climate finance, and at the very least are failing to meet UNFCCC guidelines in their reporting process.”
Most of the vulnerable countries are at the bottom quintiles of the corruption perception index 2016 by the Transparency International, and as such, those countries must prioritise good governance in climate finance for protecting lives and livelihoods.
At the same time, developed countries must meet their pledges to provide the climate funds and shall apply robust and transparent accounting for avoiding double counting.
COP23 should follow the “Whole-of-Governance” approach in climate finance, both in terms of supply from developed countries and also demand its proper utilisation by developing countries. The issues are illustrated in the table:
As a most vulnerable island, Fiji has identified “Loss and Damages” to be among the priorities for COP23.
Article 8 of the Paris Agreement also recognises it as an issue separate from adaptation finance.
After the establishment of the Warsaw International Mechanism (WIM) at COP19, there is no funding yet to cover the growing loss and damages in vulnerable countries.
It is expected that “Fiji International Initiative for Loss and Damage Finance” would be adopted to generate and provide public finance to ODA in addition to the commitment as adaptation finance.
It is important to note that as a financial tool, Loss and Damages Insurance is not a feasible mechanism for absorbing the shocks and stresses in developing countries since it covers only uncertain impacts and does nothing to address the slow but inevitable onset of events like sea level rise, salinity increase, and ocean acidification faced by the Pacific, Caribbean and LDCs.
COP23 should therefore adopt the zero draft of the Paris Agreement Implementation Guidelines with clearly specified options for climate finance, loss and damages, and transparency framework, using the “Whole-of-Governance” approach, and it should be done through meaningful and constructive negotiations on the draft texts. Doing so will help countries meet the 2018 deadline.
Fiji presidency should provide strong political guidance to ensure concrete commitment especially from the developed countries to mobilise grant based public finance; the guidelines should be disclosed and discussed with all stakeholders including observers and non-state actors throughout 2018 and all comments and suggestions must be adequately considered for equitable and balanced implementation of the Paris Agreement.
The writer is a Climate Finance Governance Analyst in TIB.