Developing countries demand clarity and transparency of financial support from developed countries | Centre for Science and Environment


Developing countries demand clarity and transparency of financial support from developed countries

India wants a report card on climate finance contributions coming from developed countries 

By: Uthra Radhakrishnan

Finance and technology transfer from the developed to the developing countries could be the deal breaker for an agreement in Paris. In an open ended consultation on means of implementation, Bernaditas Muller, head of the Philippine delegation, a key member of the powerful like-minded developing country group (LMDC) said developing countries would take on GHG emission reductions if and only if developed countries provided clarity of support through financial and technological transfers. 

While such conditional statements tend to irk industrialised countries, the context is unmistakably familiar and important. There are two parts to this. First, the Convention that was founded on the principle of common but differentiated responsibilities and respective capabilities (CBDR/RC) demands that developed countries take the lead and developing countries follow with assistance from developing countries on finance and technology transfers. It is widely agreed that developed countries failed to show this leadership. They now point at how the economic profiles of larger developing countries have changed since then and everyone needs to come on board to save the warming planet. Secondly, the last time a deal was brokered and developing countries agreed to take on mitigation actions, significant amounts of financial transfers were promised. Institutions have been set up to this effect but after some initial transfers, the level of confidence about the the scale of finance promised has withered. This is mostly due to the growing importance being placed on private finance and the gradual push by some developed countries that not all the money can come from developed countries and that the financial responsibility should also be shouldered by larger economies within the developing country bracket.  

Highlights

• India wants a report card on climate finance contributions coming from developed countries along with details on type, scope, time period and other details

• China calls for a clear aggregate commitment of 70 billion USD by 2016 and Sudan highlights the importance of pre-2020 finance as a confidence building measure

• Philippines says developing countries will make contributions but will need finance and technology equally measured, reported and verified for that

• India says finance commitments should have timelines and should be legally binding - it cannot be treated on a different footing from mitigation actions

• China calls for financing R&D actions and India calls for facilitative IPR regime

• Developing countries say adaptation must be balanced with mitigation

• Sudan for Africa Group asks for a finance goal in line with a 2-degree target

• US and EU and other developed countries say mitigation cannot be conditional on finance; US says priority will be for adaptation in vulnerable countries

• EU says long term finance is challenging for Governments to put forth but is committed to climate financing

• EU: finance and mitigation cannot be discussed in the same space

• Japan and US suggest finance should be outside the core agreement

• Most developed countries see private finance as a significant component

• India says private finance should be reported separately

The response from the developing countries to this has been a unanimous call for financial support that can be measured, reported and verified (MRV) and a clear pathway for financial commitments that would ensure predictability and clarity from developed countries. While the devil is always in the details, here are the broad positions of different countries and country groupings on finance and technology transfer: 
 

China

Developed countries should provide clarity and a pathway on financing.
A clear aggregate commitment of 70 billion USD by 2016.
Ensure compliance and MRV of finance commitments by Annex-II parties.

Special window for technology transfer for environment related technologies.
Removal of barriers to technology transfer including through Intellectual Property Rights (IPRs).
Financing for R&D in developing countries particularly for diffusion of RE technology.

 
Philippines

How do we reflect financing in 2015 agreement?
A clear element for developing countries is support not just finance, but also technology and capacity building.
Facilitated access and transfer of technology and finance should be clearly reflected in the agreement.
We will make contributions but we will need finance and technology equally measured, reported and verified (MRV).
On private finance: they are not the ones who made commitments under the Convention and cant be held accountable.
Green Climate Fund is not going the way we intended it; it was mandated by the COP to provide predictable finance.

 
India

Financial commitments have been made by some but are not based on needs assessment
of the developing country parties.
Private sources can only supplement public source of funding.
Sources, period of funding, sectors being supported, impacts, population being supported all need to be mentioned on a common reporting format and agreed to.
Equal level of information will be shared by the recipient country.
Private sector funding should be reported separately.
Finance should be agreed to on a time scale and should be legally binding - it cannot be treated on a different footing from mitigation actions.
Business approach cannot help us with technology transfer; Government-based approach needed.
The Technology institutions currently in place (TEC/CTCN) not adequate. Facilitative IPR regime is a must in this regard. GCF can have window to support technology transfer through supporting differential cost.

 
South Africa

Contributions must include all aspects and not just mitigation.
Funding gap is far beyond the UNFCCC mechanism.
700 billion - 1 trillion per year by 2030 is the estimate of costs for adaptation.
Clarity on investments made by parties needed and on type of financing - concessions, loans etc.
A range of global policies including those addressing issues of incidence needed.

 
EU

A core part of 2015 agreement is finance and EU will be active in delivering climate finance.
Process for discussing finance cannot be the same space for discussing mitigation.
Countries cannot decide on long-term finance commitments such as what they can put forth 10 years from now.
Finance from a small number of countries in isolation will not achieve much; co-operation from all parties is sought.

 
US

Commitments cannot be conditional on finance; parties can identify if they need additional support.
National contribution refers to mitigation only.
Finance is better placed outside the agreement; we see it as a package that contains a core agreement complemented by other elements.
Will prioritise on adaptation finance to particularly vulnerable countries.
Public finance not a substitute for private finance but should use it to leverage private finance.

 
Japan

There should be a core agreement along with other elements (such as finance).
Legal bindingness of each element varies.
The Secretariat is not a financial institution and has limited capacity on financial issues.
Should not overburden UNFCCC on financial issues.
Do not agree that private finance is not useful; need discussion on how to use private finance.

 
Nauru (AOSIS)

Cannot take action without the provision of finance.
We look to international community for support.
Develoepd countries have obligation under the Convention to provide clear, predictable and measurable finance.
Start with 100 billion USD by 2020.

 
Sudan (Africa Group)

Finance in pre-2020 period is key to 2015 agreement as confidence building measure for 2015 regime.
100 billion USD is a floor rather than an ultimate target.
A goal for climate finance that reflects the 2 degrees target is needed.
Countries can use 1.5% of global GDP as a reference point to start with.
Clear commitment for financing adaptation and balanced allocation between mitigation and adaptation.

 
Uganda

Technology needs assessments is the basis and foundation for LDC’s when it comes to technology transfer.
The Technology Executive Committee should also ensure that technology networks are in place soon.

 
Bangladesh

The cost of mitigation/adaptation needs to be figured out in order to reflect this in a financing agreement.
Polluters pay principle or fiscal measures should be considered to finance our contributions.
Trillions of dollars needed to reduce emissions, raise adaptation ambition.
100 billion will not be sufficient in 2020.

 
CoP19
CoP19/Warsaw
CoP18
Doha, Qatar
CoP9
Milan, Italy
CoP17
Durban, South Africa
CoP8
New Delhi, India
CoP16
Cancun, Mexico
CoP7
Marrakech, Morocco
CoP15
Copenhagen, Denmark
CoP6
The Hague, Netherlands
CoP14
Bonn/Poznan
CoP5
CoP5 Bonn, Germany
CoP13
Bali, Indonesia
CoP4
Buenos Aires, Argentina
CoP12
Nairobi, Kenya
CoP3
Kyoto, Japan
CoP11
Montreal, Canada CMP 1
CoP2
Geneva, Switzerland
CoP10
Buenos Aires, Argentina
CoP1
Berlin, Germany
 

Uthra Radhakrishnan
Email: uthra@cseindia.org
Tel: +91 11 29955124