Who should be bailed out - him, or Bangladeshis? (source: autocar.co.uk)

Low-lying Bangladesh is often cited as one of the countries likely to be worst hit by climate change, particularly due to sea-level rise. Urgent measures in Bangladesh’s 10-year action plan are predicted to cost $5 billion in the first five years.They’ve already raised $45 million from donors, but now there are fears that support will dry up as the financial crisis bites in rich countries, which one of their negotiators for Copenhagen has already expressed. Such fears are echoed by the likes of UNDP and WWF, who fear it is unlikely rich countries will step up to the plate.

Given the UN Adaptation Fund (see previous posts) depends on CERs for its financing, the recent fall in the carbon price is bad news for adaptation. Some estimates suggest nearly 20% of the fund’s worth has been lost. The GEF has indicated that it may start being more vocal about pushing donor countries to finance adaptation.

In any case, it certainly looks bad if the US, Britain and others are pumping billions into their banks and car manufacturers (high carbon emitters and lazy good-for-nothings who have dragged their heels on fuel efficiency) whilst leaving developing countries to face the music. This is the height of climate injustice, and you can expect a lot of noise to be made if things haven’t improved by the time Copenhagen comes along…

*update* 23/2/09 - this Guardian story follows a similar theme

ODI (source: odi.org.uk)

A few weeks ago, a new website monitoring climate funds was launched. Called www.climatefundsupdate.org it is funded by the Overseas Development Institute (ODI), amongst others.

However, it is an independent website, and aims to provides information on the growing number of climate change funding initiatives, and will track their progress up to Copenhagen. In particular, it will follow where they are being developed, what they support, and how they will be disbursed. In particular, I have found the flowchart here useful, which shows how several of the funds link the various bodies with bilateral and multilateral donors.

The number of climate-related funds is growing and growing. This website should provide a useful portal to monitor how much is actually being disbursed from each, and indeed some detail on the individual projects. Upwards of 800 projects are already listed on the searchable database, some mitigation, some adaptation.

It is a good thing that these kinds of initiatives are popping up. Let us hope that the website will be updated regularly, and continue to be a useful resource to Copenhagen and beyond.

Last year, rich countries pledged some $6 billion for the World Bank’s Climate Investment Funds (CIFs), to which the UK is a significant contributor. It has recently been announced that some 8 countries are allowed to submit proposals for the Pilot Program for Climate Resilience (PPCR). These are Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan and Zambia.

The PPCR aims to provide about $500 million for integrating climate resilience in national development planning, an issue on which I have written before. The cash will be spent through the regional development banks (ADB, AfDB, IDB) as well as the EBRD and the World Bank itself. Apparently, the pilot programs will be “country-led” and build on NAPAs, amongst other things. It is also promised that they will be aligned with the Adaptation Fund under Kyoto.

It is good that such a large dollop of adaptation financing is finally being handed out. However, many NGOs are critical of the Bank’s leadership on the CIFs, given its poor environmental record, and its history (and continuing large portifolio) of fossil fuel investments.

Nevertheless, the Bank is fairly efficient machine as far as multilaterals go, and works in virtually all developing countries. It is difficult to see many other agencies (particularly within the UN system, as favoured by NGOs) that could do as quick, and good, a job given the huge amounts of money involved. Nevertheless, the Bank’s role is likely to remain controversial in some circles.

Brazilian Minister for the Environment Carlos Minc launched the country’s national strategy to address climate change, signed by President Lola on 1st December 2008. Whilst the developing country previously held a defensive position, the launch of this strategy represents a shift to a more leadership position, with which they hope to influence the G77 and developed countries to also lead. Brazil echo the sentiments in Simon’s previous blog, that COP 14 has become a waiting game, as everyone waits for other’s to make the first move.

Key commitments from the National Climate Change Action Plan include:

•       Reduce deforestation in the Amazon by 70% by 2020 - saving 4.8bn tones of carbon over the 12 years. This is more than the target all countries agreed to reduce at Kyoto combined.
•       Increasing concentrations of ethanol in the fuel mix for cars by 11% each year, reducing a further 500m tones of carbon over 10 years. Additionally, this will be achieved without any impact on land used by indigenous people or for food production.
•       Increase in co-generation from 0.5% to 10% - improving efficiencies and representing a saving of around 100m tones of carbon
•       Increase in hydroelectric energy generation - to replace more of exiting energy supplies from fossil fuels
•       Plans to increase reforestation from 5 - 11 hectares, doubling the current rate of reforestation, including in indigenous areas
•       Planting more trees at a faster rate than those being chopped down - till at least 2015
•       Certification of wood and forest management to fight illegal sales of wood from the Amazon
•       Specific resources made available to fund adaptation and fight desertification - a key issues for north-eastern areas of Brazil, home to 50m people.
•       Amazon Fund created to fight deforestation in the Amazon- supported by 1bn Euros, from Norway, Germany and £100m from the UK

These commitments represent Brazil’s commendable decision to take a more leadership position, and the Minister for Environment called for collaborative action and further efforts from other developed and developing countries, to encourage the EU to adopt its higher target of 30% by 2020 - by meeting the condition of support from other nations.

Brazil has created National Climate Fund, which will be funded by 10% of the revenues from the petroleum industry. In addition, their ambitious programme is expected to be funded by their National Bank for Social and Economic Development, and the Minister of Environment felt this needed no further incentives at the moment.

Whilst Brazil’s leadership is in combating climate change is commendable, following the lead of Mexico’s ambitious intention for 50% reduction by 2050 earlier this week, it is interesting to note that the country has authorized the construction of their third nuclear power plant, using German technology. A further three are expected, but details are to be finalized. Brazil has strongly opposed CCS in CDM throughout the COP process, yet it is interesting to see their commitment and deployment of a similarly controversial technology.

The Prime Minister of Tuvalu (source: apwf.org)

At the beginning of the negotiations at Poznan, it was suggested that the Adaptation Fund (AF) was one of the few areas on which significant progress would be made (see my previous post). In the end, negotiations even on this issue went right to the wire, after there was failure to reach an agreement by the theoretical deadline on Wednesday.

A key sticking point was the legal capacity of the AF board, specifically whether countries should be able access the funds directly. The EU wanted direct access to be delayed, mainly because of worries that without proper controls in place, funds might be used for purposes not related to adaptation. This attracted the ire of the Prime Minister of Tuvalu, who accused “some key industrialised countries” of trying to make the AF inaccessible to those most in need, by blocking their way with red tape.

However, this impasse was overcome today, the final day of negotiations. Now the AF board has the right to sign contracts, and could be releasing funds within months. Despite a generous Swedish donation of $500 million over the next three years, it is severely under-funded. As mentioned in my previous post, Oxfam has estimated that adaptation needs of developing countries will be $50 billion a year by 2015.

Despite this financing gap, it is good news that the AF has finally been operationalised. This will allow some of the poorest and most vulnerable countries to get vital adaptation projects underway as soon as possible, and should set the scene for an equitable deal at Copenhagen next year.

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Note - A synthesis of various countries’ suggestions for action on adaptation can be found on p.64-83 of the ideas and proposals document agreed by the AWG-LCA on Wednesday. The subsidiary bodies also made specific conclusions on the Nairobi Work Programme and the LDCF.

Source: Benkamorvan @ Flikr

Nobel Prize winning Al Gore addressed a jam-packed plenary today, to reinforce the urgency of the global climate change crisis we face.

“The road to Copenhagen is clear…”

Gore stressed that the ‘optimism and hope’  we see today are great enough to help us to reach an agreement in Copenhagen, in spite of the obstacles and difficulties along the way.  Sending the audience into a frenzy of cheers, this statement raised the decibels in todays plenary, which has only heard a quiet chatter and less engaging murmer up till now. The message Gore delivered was American in style, and somewhat in content, quoting speeches from President-elect Obama on a ‘green’ global deal. He highlighted the emerging consensus on a synchronised and green stimulus to address the global financial crisis, developing the renewable energy sector, empowering people to be more energy efficient through a behavioural change and creating more green jobs to revitalise the global economy.

He praised developing counties for making bold steps and contributing to address climate change; including Brazil which has launched a new plan to halt deforestation, and is also considering further efforts to reduce emissions. China was congratulated for their efforts, which include a $600m injection into the green economy, and the largest tree planting programme globally, showing that they are ready to lead the way to a more sustainable world.

REDD, reform of the CDM and the adaptation fund (with appropriate financial architecture) remain the key discussion points along the journey to an agreement at Copenhagen. In addition, capacity building in developed countries (as well as developing countries) will enable them to overcome “the paralysis preventing us from acting….we must focus less on the activities of OJ Simpson and Paris Hilton, and more on the moral issue we face today”.

Gore continued to stress this notion of the climate crisis as a moral and spiritual issue, not a political one - “We have a generational mission, a compelling moral purpose and a shared vision to act…”, echoing the sentiments of  a shared vision within the UNFCCC discussions, and also highlighted by Yvo de Boer in Wednesday’s press conference.

In a bold statement, Gore emphasised that we must strive to achieve 350ppm not just 450ppm, claiming that the momentum we could achieve globally in reducing GHGs could make this an easier target for the future. Whilst this statement received further cheers and applause from many research, youth and non governmental delegations pushing for stronger targets, it seems a rather audacious claim to make amid climate negotiations which have, to date, struggled to negotiate the detail of how to deliver any agreement with significant commitments to reach 450ppm. However ambitious the target might be, the overcrowded audience was fully engaged with the speaker’s vision…more so than any other plenary I’d attended over the past 8 days. Could it be that the Academy Award-winning celebrity had us all star-struck?  Whether a good or bad thing, this nobel prize winner certainly raised the levels of frenzy in the corridor. All that remains now are the next 12 months until Copenhagen to work out the details of such bold ambitions.

Gore also runs Generation Investment Management LLP - a London based investment management firm which focuses on sustainability factors including social and environmental responsibility and corporate governance.

The UK’s Secretary of State for Energy and Climate Change, Ed Milliband, addressed  the UN Conference of Parties (COP) here in Poznan today, delivering the UK’s ministerial statement on climate change.

Ed Milliband, UK Sectretary of State for Energy and Climate Change, speaking in Poznan today

Echoing sentiments of Gordon Brown and other EU member states over the last week in Brussels, he stressed that the UK must overcome the challenge posed by the global finiancial crisis. The costs of adaptation and mitigation continue to rise the longer we wait - we must up the pace along the road to less discussion and more negotiation for an agreement at Copenhagen next year.

He praised the efforts of developing countries and stressed the need for developed nations to take on stronger targets, based upon the concept of common but differentiated responsibilities. Developing nations must consider substantial deviations from business as usual (BAU) and we must ensure that strong transfer mechanisms exist to support this effort.

The UK’s spirit of intent is reflected in the commitments they have made through the Climate Change Act, adopting challenging targets of 80% carbon reduction and 20% for generation of renewable energy, by 2050. The UK will adopt further commitments as part of the European Climate Package, which is expected to be decided in the next 48 hours. As part of the EU’s recently announced  Renewables Directive (20-20-20) the UK will adhere to plans to increase targets for generation of renewable energy from, 20% to 30% if other countries make significant contirbutions.

Milliband, stressed that “We must go further than 50% by 2050″  as the UK (and Obama) has committed. In addition, the UK is commiting further resources to the UN’s Adaptation Fund, and £100m to forestry issues (a statement on deforestation will be released tomorrow).

Milliband delivered a strong statement in amongst China and Austria, reflecting the UK’s vision to be a pioneer in the fight against climate change, and the large commitments the UK has adopted in the Climate Change Bill. The Committee on Climate Change released their first report (Building a low-carbon economy - the UK’s contribution to tackling climate change) on 1^st December, setting out the analysis which underpinned the target reductions and details of the level of the first 3 carbon budgets - up to 2022.

Day 9 has started with a bump after two days of no formal negotiations.  There are number of key items to report:

Canada, Japan, Australia on 25-40% 2020 Target: Canadian media have begun to report that leaked documents from AWG-LCA show that there is growing divisions over the interim targets that the Bali Roadmap Group had been drafting in preparation for the high-level segment of COP-14 this week.  The draft document shows that countries have expressed formal problems (indicated on the document by a ‘hook’) with the language of the interim targets and that the EU delegation has confirmed that Canada, Japan, Australia and possibly Russia are trying to alter the current language that commits parties to the interim target.  

The EU delegation (in the form of the French presidency) are, not surprisingly, annoyed.  Delegates around the centre here are suggesting that the EU will begin applying pressure–whatever that actually means (’corridor speak’ is always rather ambiguous).

Finance: In the daily UNFCCC statement Yvo de Boer has intimated that the operationalisation of the Adaptation Fund is now in discussion, although whether it will be agreed upon–specifically in terms of how to fund it–is still not clear.  What Mr de Boer did say was that attempts to exclude the World Bank from the adaptation transfer system was like ‘cutting off you nose to spite your face’.

Targets: In addition to the issues regarding interim targets above, it looking increasingly unlikely that there will be agreement on long term targets by the end of COP14.

Deforestation: Discussions are continuing but at a slow rate.  There are still major divisions about the fundamental structure of this project, from what will be protected to who will pay.  It is looking very unlikely that there will be major progress on this by the end of the week.

CDM: there are major discussions about the CDM.  In fact, such discussions have taken up a large proportion of the negotiating time in Poznan.  Inclusion of CCS and nuclear in CDM is now on the table, according to Yvo de Boer.

A key conclusion that is now beginning to emerge is that COP14 is going to be largely a talking shop and foundation-building exercise.  This is not a surprise.  However, today Yvo de Boer has begun using language that frames COP15 in Copenhagen not the as conclusion of negotiations for the second commitment period but as another step along the road.  ’If the fundamentals are in place by the end of 2009 then we can work out the details after’.  

This is similar to the process used after the creation of the Kyoto Protocol, where the CDM was added in at the last minute in 1997 and then subsequently developed between 1997 and 2001.  Such a detail-forming process would not necessarily be bad in terms of the treaty mechanisms that would result; after all the second commitment period begins in 2012.  However, a half-baked Copenhagen Protocol would look less progressive in public, activist, and business eyes.  There has been much discussion, for example, at Poznan about how business needs certainty for post-2012 investments in CDM projects.

What we are seeing here is the UNFCC trying to re-frame the context of Poznan and also now Copenhagen. The implications of this on the COP process is not clear yet, but it is clear that parties are preferring a longer-term view over a focus on the immediate.

More information to follow after today’s plenary sessions.

90% of 12-18 year olds in China, Brazil , Africa, Russia and many other countries believed that world leaders should do everything they can to address climate change in a recent UNEP survey. Yvo de Boer stressed our global responsibility and commitment to finding a climate change solution yesterday in his address to The Climate Group’s Climate Leaders Summit.

From where we stand today, a deal at Copenhagen still needs a lot of support, however, Boer stressed the need to establish agreement on the fundamental elements, encouraged that the rest will follow. He added that the monitoring, reporting and verification (MRV) aspects must be effective, and we must create a practical and effective “agreement with legs” to drive us to a lower carbon and more sustainable development. In a press conference today, he highlighted his expectations for a successful deal at Copenhagen - clarity on advancing the climate change agenda, clarity on commitments (targets), financial resources and the financial architecture for developing counties. Devloped country leadership and ambition, and the transfer of financial and technology support for the developing countries will be crucial issues. 

Boer commented on the global economic crisis and its impacts on the global climate negotiations too, highlighting that many countries are seeing the current financial climate as an opportunity to address environmental issues, and referred to the EU and US packages which include reference to cleaner energy. He stressed the role business has to play in a Copenhagen deal - climate change solutions must be economically effective. 

Key discussions focus on market mechanisms for finance (including the Adaptation Fund) and technology transfer, discussions over CDM reform - equity issues and debate over whether this should include CCS; the issue and REDD; x. A Copenhagen deal needs to address the debate the financial aspects - and clarify who will decide where the money is spent? How much, and on what? Key questions that the delegations continue to debate here in Poznan.

There is a significant role for cities and regions to contribute to this agenda, particularly in determining the MRV procedures and communicating the agreement in local governance. Reflecting local commitments to supporting this agenda with practical actions, the Summit (Chaired by Premier Rann of South Australia and with a video address from the Governor of California, Arnold Schwarzenegger), produced an a statement/Action Plan to influence the ongoing negotiations and support the UNFCCC secretariat to ensure attention is paid to a cooperative effort to defining the MRV actions, public policy and mechanisms to achieve this.

The road to Copenhagen is in sight, all that remains for discussion is the detail of how to get there.

Floods in Bangladesh (credit: dfid.gov.uk)

Some commentators think that one of the few things we me see progress on at Poznan is the “Adaptation Fund” (AF). Unlike the LDCF (see my previous post), it was established to finance concrete adaptation projects and programmes in developing countries. It is operated by the Adaptation Fund Board, but the GEF runs the secretariat and the World Bank is the trustee.

Current arrangements suggest it will mainly be financed with a share of proceeds from CDM project activities (2% of CERs). This means its replenishment is heavily dependent on the success of the CDM.

The UNFCCC reckons that this process could yield anything between $250 million and $3 billion a year by 2030. However, this is a fraction of most assessments of developing countries needs for adaptation financing. Oxfam, for example, has estimated this to be $50 billion a year by 2015, and the UN has estimated $86 billion. WWF estimates that there is less than $1 billion currently earmarked for adaptation. Whichever way you look at it, there is a big financing gap.

Therefore, the AF clearly needs sources of financing above and beyond the CDM. One source is pledges from rich countries, but so far these have amounted to less than $300 million. Aid agencies and many developing countries have been making the case for more serious pledges by rich countries, given their historical contribution to carbon emissions. For example, China and India have suggested the rich countries commit to donating a percentage of GDP for mitigation and adaptation in developing countries. Whatever the figure agreed on, this is a sensible and equitable suggestion.

To make up some more of the shortfall, Oxfam has suggested that instead of 2% of CERs going to the AF, this figure should rather be 7.5%. Furthermore, as Simon noted the other day, Yvo de Boer has suggested another source of financing for the AF could be Joint Implementation (JI) projects, potentially adding an extra billion dollars or so by 2020.

Sorting out the AF is a matter of urgency. The chair of its board announced yesterday
that the AF is even short of the cash needed to just keep it running. There are many suggestions on the table for financing adaptation, and a key outcome of Poznan should be some clarity on which ones are likely to be taken up in a post-Kyoto deal. This is crucial as it will allow more research to flesh out proposals before Copenhagen next year.