Debt crisis may harm fight against climate change

Updated: 2011-11-28 07:56

By Zhang Haizhou and Cecily Liu (China Daily)

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Debt crisis may harm fight against climate change

Experts issue warning ahead of conference in South Africa

LONDON - Eurozone countries suffering from the debt crisis may have trouble meeting their promise to give poorer nations money to help them deal with climate change, experts said ahead of a UN climate summit starting on Monday in Durban, South Africa.

Industrialized countries pledged under the 2009 Copenhagen Accord, a decision confirmed at the 2010 UN Climate Change Conference in Cancun, Mexico, to fund climate vulnerable countries $10 billion a year from 2010 to 2012 with "Fast-Start Climate Finance Pledges (FSF)".

They have also pledged to increase this amount to $100 billion annually by 2020. Detailed yearly commitments, currently unavailable, are expected to be discussed and agreed on in Durban.

"Financial situations in developed countries have not been good for some time now, and the eurozone crisis has been the most recent manifestation of the difficulties," said Smita Nakhooda of the Overseas Development Institute (ODI), a London-based think tank.

"Some countries like the UK, Japan, Norway and Germany have made a serious effort toward fulfilling their climate finance commitments, while other countries including the US have struggled," said Nakhooda.

As of mid-2011, only $8.1 billion has been deposited in climate finance funding mechanisms, according to data collectively compiled by the Organization for Economic Cooperation and Development, the World Resources Institute and DARA, a non-governmental organization that evaluates the impact of humanitarian aid.

Nearly two years into the three-year funding commitment, just $2.4 billion has been disbursed to country programs or projects.

The European Commission said that it recognizes the need for the EU countries to fulfill their Cancun pledges and confirmed that a total of $6.2 billion has been mobilized by EU countries alone.

Connie Hedegaard, European commissioner for Climate Action, said that despite the severe economic downturn and strong fiscal constraints in Europe, the EU countries mobilized $3.2 billion of climate finance in 2011.

"This adds to the 2.34 billion euros ($3.1 billion) we mobilized in 2010," said Hedegaard.

"This figure shows Europe's clear commitment to support actions for reducing emissions and adapting to climate change in developing countries."

Meanwhile, developing countries and NGOs specializing in international aid have joined forces in an attempt to make industrialized countries abide by their pledges, even though the FSF pledges are not legally binding.

Ministers and representatives of some 30 countries, among the most vulnerable to the harmful effects of climate change, gathered at the Climate Vulnerable Forum (CVF) earlier in the Bangladeshi capital of Dhaka this month to reach a common stance they can then present in Durban.

United Nations Secretary General Ban Ki-moon, who inaugurated the conference, said that it is important for the governments of industrialized countries to abide by their pledges.

"Durban must complete what was agreed last year in Cancun," he said.

Matthew McKinnon, head of the climate vulnerable initiative at DARA, which co-hosted the CVF, said that the correlation between the eurozone debt crisis and climate finance commitments is ambiguous.

"Climate finance is derived from the world's largest and most advanced economies whereby the proportions pledged and committed are currently microscopic in relation to the actual economies concerned," McKinnon said.

FSF pledge as a percentage of 2009 Gross National Income (GNI) is highest in Japan (0.1 percent), followed by Norway and Sweden (both 0.08 percent). Pledges from Austria, Cyprus, the Czech Republic, Greece, Hungary, Iceland, Liechtenstein and Slovakia consisted of less than 0.01 percent of their GNI respectively, while the average among the rest is about 0.01 percent.

Climate vulnerable countries consist mostly of poor developing countries in Africa, the Americas, Asia and the Pacific, where facilities to mitigate the impact of climate change are badly needed.

According to 2009 statistics from the United Nations Framework Convention on Climate Change, developed countries with less than 20 percent of the world's population are responsible for 75 percent of global emissions.

This relationship between major polluting countries and countries suffering severe environmental impacts forms the basis of climate finance agreements.

At the CVF, China said it would carry out "pragmatic cooperation" with CVF member states and provide "help and cooperation".

But whether industrialized countries fulfill their FSF pledges remains to be seen.

"Multinational channels like the Global Finance Facility and the Climate Investment Fund have more information available, because these channels have attracted more public attention and scrutiny," said Nakhooda of the ODI.

The ODI has partnered with Heinrich Boll Stiftung, a legally independent political foundation affiliated with the German Green Party, to create Climate Funds Update, an independent Web portal dedicated to delivering information about climate finance.

Nakhooda said that it is important to standardize reporting procedures through multilateral processes.