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US$ 7.2 Million to Boost Climate Change Resilience

Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz (standing, left) and General Manager, Country Department, Caribbean Group, Inter-American Development Bank, Therese Turner Jones (standing, right), observe as (from left) Permanent Secretary in the Ministry of Economic Growth and Job Creation, Audrey Sewell; Managing Director, Development Bank of Jamaica, Milverton Reynolds; General Manager, JN Small Business Loans, Gillian Hyde; and Programme Manager, Environmental Foundation of Jamaica (EFJ), Allison Rangolan McFarlane sign the Memorandum of Understanding (MOU) for the Adaptation Programme and Financing Mechanism Project at Jamaica House, in St. Andrew, on July 28. Under the initiative, US$7.2 million will be made available to micro, small and medium-size enterprises (MSMEs) in the tourism and agricultural sectors to finance climate-change adaptation initiatives islandwide.

Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz (standing, left) and General Manager, Country Department, Caribbean Group, Inter-American Development Bank, Therese Turner Jones (standing, right), observe as (from left) Permanent Secretary in the Ministry of Economic Growth and Job Creation, Audrey Sewell; Managing Director, Development Bank of Jamaica, Milverton Reynolds; General Manager, JN Small Business Loans, Gillian Hyde; and Programme Manager, Environmental Foundation of Jamaica (EFJ), Allison Rangolan McFarlane sign the Memorandum of Understanding (MOU) for the Adaptation Programme and Financing Mechanism Project at Jamaica House, in St. Andrew, on July 28. Under the initiative, US$7.2 million will be made available to micro, small and medium-size enterprises (MSMEs) in the tourism and agricultural sectors to finance climate-change adaptation initiatives islandwide.

A total of US$7.2 million will be made available to micro, small and medium-size enterprises (MSMEs) in the tourism and agricultural sectors, to finance climate change adaptation initiatives islandwide.

The money, which will be in the form of loans and grants, is being provided under the Adaptation Programme and Financing Mechanism Project, a component of the Pilot Programme for Climate Resilience (PPCR) in Jamaica.

The Project is a five-year initiative which aims to increase Jamaica’s resilience to climate change, through enhancing adaptive capacity across priority sectors.

This component of the PPCR is being implemented by the Ministry of Economic Growth and Job Creation, with funding from the Inter-American Development Bank (IDB).

The initiative was formalised during a signing ceremony at Jamaica House in St. Andrew, on July 28.

The Memorandum of Understanding was signed by Permanent Secretary in the Ministry of Economic Growth and Job Creation, Audrey Sewell; Managing Director, Development Bank of Jamaica, Milverton Reynolds; General Manager, JN Small Business Loans, Gillian Hyde; and Programme Manager, Environmental Foundation of Jamaica (EFJ), Allison Rangolan McFarlane.

Speaking at the ceremony, Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Hon. Daryl Vaz, said the Government intends to increase its efforts to pursue long-term, transformative development and accelerate sustainable, climate-resilient economic growth.

“As a Government, we have pledged to protect the environment while creating jobs to drive the engine of economic growth, and we cannot allow climate change and other environmental impacts to impede us,” he said.

The Minister thanked all the partners involved in the initiative, noting that it represents an excellent opportunity to build on the work that has already begun in fostering sustainable development through partnership.

For her part, Ms. Hyde said the new loan facility will be open to qualified MSME beneficiaries who will be eligible for a loan amount between $200,000 and $5 million.

She pointed out that the loan will be available at a maximum interest rate of four per cent per annum.

For her part, Ms. Rangolan McFarlane said the money will be accessible to community-based organisations, non-governmental organisations, other civil-society groups and selected public-sector agencies, for clearly defined high-priority activities.

She added that these should be related to building the resilience of the natural environment and contributing to livelihood protection and poverty reduction.

General Manager, Country Department, Caribbean Group, Inter-American Development Bank, Therese Turner Jones, said the initiative is another in a series of partnerships to assist in the development of the country.

“We are looking to see how this pilot is going to work, so we can think about replicating this elsewhere in the region,” she said, adding that the initiative is the first of its kind in the Caribbean.

The project involves a Climate Change Adaptation Line of Credit and a special Climate Change Adaptation Fund.

The Line of Credit will provide loan financing to help MSMEs in the tourism and agricultural sectors to adapt to the impacts of climate change.  The loans will be administered by the JN Small Business Loans Limited. The sum of US$2.5 million is being provided for this.

The Adaptation Fund will provide grants to adaptation and disaster risk reduction projects and finance the associated programme management costs.

Grants will be provided using the successful EFJ grant-making model. The EFJ will be the Fund Administrator for the US$4.7 million being provided.

Credit: Jamaica Information Service

Dr Ulric Trotz: Let’s Re-imagine GCF Resources (article and interview)

Dr Ulric Trotz, Deputy Director and science Advisor at the Caribbean Community Climate Change Centre (CCCCC), says  calls for a transformation of Green Climate Fund resources that could optimize and efficiently direct private investment and limited public resources. Peruse his proposal  below and listen to his exclusive interview on the inaugural edition of Caribbean Climate Podcast.

The inherent differences in the nature of Mitigation and Adaptation outcomes is consequential and should be a central feature of comprehensive climate change policy decisions, policies and programmes. While they both result in the production of a public good, that derived from mitigation (decreased carbon) is a global public good, and conversely, that derived from Adaptation is a local public good. Indeed, Adaptation is very country specific, hence the localized nature of the benefits derived therefrom. As a result, the product from Mitigation can be commoditised and traded on the local and/or global markets. This paves the way for international private sector entities, to identify profitable pro-environmental opportunities and invest in global action that facilitates Low Carbon Development (Mitigation). Mitigation’s ability to generate private sector opportunities distinguishes it from Adaptation. Even at the local level, Adaptation fails to attract private sector investment, because the local public good it produces is not a marketable commodity. By implication, Adaptation invariably warrants public sector intervention. Specifically, more robust public spending on infrastructure, healthier ecosystems, better health systems, etc. These crucial differences underscore the existence of a significantly more favourably global private sector investment environment for mitigation relative to Adaptation, the bulk of which will remain the responsibility of the public sector.

So significant and consequential is the divergent investment potential (public and private) of Adaptation and Mitigation, the UN Secretary General’s High Level Panel on Climate finance called for a significant proportion of the US$100 billion per year to be mobilized for the Green Climate Fund to come from the private sector. This private sector engagement must operate both locally and globally given the considerable risks and high costs associated with Adaptation that could prove prohibitive for the private sector in the developing world. Some observers view this approach skeptically, often wondering, why would the private sector, say in the United Kingdom, be interested in providing funds for Adaptation in Belize? These are highly plausible concerns, but the case for Mitigation is totally different. Unlike Adaptation, both local and foreign private sector capital can be mobilized for investment in mitigative actions in any part of the world. Building low carbon economies is the business of the future and lends itself to global investment. With this in view, I propose a re-imagination of GCF resource allocation.

Considering the unlikely flow of the necessary resources from the private sector for Adaptation purposes and a clear pro-environmental incentive for global and local private sector engagement through mitigation, most of the GCF allocation should be used to support adaptation actions. GCF resources should not be used to “implement” actual mitigation actions, namely renewables, efficiency measures, among others. I strongly suggest that GCF resources be used to help countries prepare an environment for robust mitigation efforts, such as energy transformation – policy and legislative reform – and also to prepare sound investment portfolios with full-fledged, costed and ready to implement proposals for the transformation of the energy sector. I imagine GCF resources being used to incentivize investment in these actions. The approach I have articulated will create an enabling landscape marked by a favourable investment climate, an incentivizing environment, and a preponderance of credible and ready to go transformational programmes. One can anticipate such a landscape to yield heightened private sector interest and investment in Mitigation without GCF’s resources crowding out private funding, while leaving crucial adaptation efforts – which does not readily attract private funding – largely underfunded. Put simply, the GCF should be reengineered to support Adaptation directly, create the environment for private sector investment in Mitigation, and leave actual implementation of the latter  to the private sector.

Dealing with Adaptation funding more broadly is a bit less straightforward, but, the “integration” of climate risks into national development planning and budgetary processes, as well as crafting a budgetary support modality as a mechanism for adaptation funding could result in some feasible solutions. How do we approach this integration when considering a reasonable modality for adaptation financing?  I propose that countries should “integrate” climate risk into national development plans and national budgets to access adaptation funding. This integration should include quantification of both the impact and additional costs of mitigating those impacts (Adaptation costs).

We in the Caribbean already have a tool to facilitate this integration – the Caribbean Climate Online Risk and Adaptation TooL (CCORAL) – that is adaptable to other contexts. Using this approach, the normal envisaged expenditure in the budget (e.g. upgrading a coastal road) becomes the country baseline contribution to the “adaptation package” (i.e. what the country would have spent in any case on that action). The incremental costs identified by the risk management analysis (Adaptation costs) can then be accessed from the GCF. The capacity building issue here then becomes mainly one of how countries gain the capacity to “integrate climate risk” into their national development plans and yearly budgetary processes. This allows countries to clearly define their national adaptation resource needs across all sectors. Once this is done, it is a question of the modalities for accessing these funds from the GCF, implementing, monitoring and reporting under the national umbrella. The essential point here is that this approach provides an avenue for channeling adaptation funds to countries, through a “budgetary support” process (by implication through the Ministry of Finance), and precludes the need for setting up a parallel external process for accessing and utilizing Adaptation funds in our countries that are already confronting challenges associated with scarce human resources.

Gold Standard Sustainable Cities Framework

The Gold Standard Cities Programme is developing ground-breaking solutions that will unlock the finance needed by cities around the globe for low carbon development.

Urbanization and climate change will be defining issues of the 21st century. Half of the world’s population resides in cities and it is expected that by 2015, the world will have over 350 cities with more than one million inhabitants each.

Cities are already feeling the impacts of climate change and they will increasingly be susceptible to rising sea levels, inland flooding, frequent and stronger tropical cyclones, periods of increased heat and the spread of diseases. To mitigate climate change and to adapt to these impacts, it is estimated that by 2050 more than a trillion U.S. dollars in investment will be needed for cities but currently, less than 2% of climate finance is channeled into urban projects due to a lack of reliable monitoring, reporting and verification on project performance and outcomes. Further, the World Bank estimates that of the 500 largest cities in the developing world, only about 4 percent are credit worthy in international financial markets, making it next to impossible to access finance for low carbon development.

The Gold Standard Cities Programme is a ground-breaking results-based finance framework through which cities can develop, audit and verify urban programmes – in order to catalyse and scale up the currently missing investment.

Supported by WWF, initial work used suppressed demand methodologies to determine that slums in Delhi emit 6.1 million tons of CO2 annually which can be reduced to 2.8 million tons by the implementation of renewable energy and energy efficiency technologies.

Establishing this baseline for slum areas was not only cutting edge research but a critical pre-requisite for climate finance to flow. Without a baseline it is impossible to verify emission reductions – the whole premise of results based climate finance. Until now, this has been a key barrier to funding urban low carbon and pro-poor development through climate finance.

The results-based finance framework, developed initially for Delhi, has been designed to be replicated in cities around the world, giving investors confidence that they have a global benchmark with which they can measure urban low carbon and sustainable development outcomes.

Major cities in China, the Middle East and Turkey are in the process of joining The Gold Standard Cities Programme.

For more information about The Gold Standard’s work with sustainable cities, please visit:

New funding structures to deliver clean energy and development in cities

Financing cities of the future: Tools to scale up clean urban development

The Cities Climate Finance Leadership Alliance – to stimulate investment into low carbon and climate resistance urban infrastructure

Credit: The Gold Standard

IN DEPTH – What’s the role of the 2015 agreement in mobilising climate finance?

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The path towards the next agreement on climate change expected in Paris at the end of the year passed through the UNFCCC ADP 2.8 session in Geneva from 8 to 13 February. According to an informal note by the Co-Chairs of the Geneva session, the objective was to “mak[e] available a negotiating text for a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties before May 2015″. The following analysis aims at underlining the role that the 2015 Climate Agreement to be adopted at COP 21 in Paris could play in mobilising climate finance. It was first published under the ICCG Reflections Publication Series. The full document is available in pdf.

The role of the 2015 agreement in mobilising climate finance

The improved coordination, greater coherence and enhanced transparency of the institutional climate finance arrangements are key issues under the 2015 climate agreement because they could contribute to mobilising increased levels of climate finance.

Enhanced transparency of climate finance is pivotal throughout the timeframe from initialising pledges and commitments to disbursing finance. Acquiring more consistent and reliable information on climate finance could help build trust among various stakeholders, including investors and the public sector. More transparent information could also help improve efficient and effective use of international climate finance, and therefore contribute to raising further international climate finance flows.

Measurement, reporting and verification (MRV) is an essential tool under the UNFCCC to produce and disseminate information on outcomes from particular climate finance instruments or funds, and therefore to ensure transparency. But there are still some challenges and gaps of MRV provisions and methodologies regarding the mobilisation and use of international climate finance. These challenges range from a lack of common definition of climate finance, the fact that not all types of climate finance are required to be reported, the problem in tracking private adaptation finance, and difficulties in attributing specific climate finance flows to certain countries.

To cope with these challenges, the Standing Committee on Finance was requested by the COP 20 in Lima, “as part of its ongoing work on measurement, reporting and verification of support, and with a view to recommending improvements to the methodologies for reporting financial information, to consider the findings and recommendations of the biennial assessment in its annual report to the Conference of the Parties for its consideration at its twenty-first session; and also, “in the context of its ongoing work, including the preparation of the biennial assessment and overview of climate finance flows, to further explore how it can enhance its work on the measurement, reporting and verification of support, based on best available information on the mobilization of various resources, including private and alternative resources, through public interventions.

The enhanced transparency under the 2015 climate agreement could contribute to mobilising climate finance in these following ways:

  • facilitating dialogue among all Parties to develop methodologies on what financial flows need to be measured, reported and verified under the agreement;
  • Using MRV as a tool to generate and disseminate information on results from specific climate financing instruments and funds;

In the end, more transparent information through international and domestic MRV processes could be useful resources for countries and private investors in making their financing decisions.

Another action that the 2015 agreement could undertake in order to mobilise effective climate finance is strengthening cooperation among international finance institutions. Concretely, the COP under 2015 climate agreement could encourage:

  • consideration for geographic and thematic balance in allocating climate finance;
  • facilitating coordination amongst institutions financing climate projects;
  • enhancing synergies between institutional arrangements outside and inside the UNFCCC.

The need for a more balanced allocation between mitigation and adaptation is clearly pointed out in the 2014 Global Landscape of Climate Finance by Climate Policy Initiative. According to the CPI Report, in 2013 annual global climate finance flows totaled approximately US$ 331 billion. Compared to 2012, mitigation finance has decreased, and finance for adaptation has grown. Adaptation received in 2013, US$ 25 billion (7 percent of total flows) of exclusively public resources, up US$ 3 billion from 2012. Private investments are not captured due to scarce and unreliable data. As already observed, the lack of transparent Information about private investment in adaptation remains one of the most important gaps in the tracking of climate finance. Although mitigation investments decreased by US$ 24 billion compared to 2012, mitigation accounted for 91 percent of total climate finance flows, totaling US$ 302 billion in 2013.

As for the geographic distribution of climate finance flows, they were split almost equally between developing (non-OECD) and developed (OECD) countries, US$ 165 billion and US$ 164 billion respectively. The good news reported by CPI Report about adaptation finance allocation is that about 90 percent of total adaptation finance was invested in non-OECD countries of which only 8 percent came from OECD countries. The East Asia and Pacific region has taken the lead in 2013 as the main destination of adaptation finance and the main recipient of Development Finance Institutions (DFIs).

The COP 21 under the 2015 climate agreement with a view to a better coordination among international financial institutions could encourage coordination among local financial institutions and relevant actors in a specific country, especially for effectively catalysing domestic investments.

As for the last point concerning enhancing synergies between institutional arrangements outside and inside the UNFCCC, the 2015 agreement could request entities under the Convention (e.g. the SCF and the GCF Board) to monitor climate-relevant financial flows channelled outside the Financial Mechanism. COP 20 Decision on the Fifth review of the Financial Mechanism recalls this idea for the GCF: “There is ample room for the GCF to learn from the experiences of other funds in terms of improving the enabling environments in recipient countries. It can do this by linking investments with focused efforts to engage stakeholders within countries in programming, and by providing technical assistance and capacity-building so as to strengthen enabling environments – institutions, policies, and regulations – that support mitigation and adaptation actions in developing countries.”

The 2015 climate agreement could also play a role by facilitating the efficient use of financial instruments and tools. Which financial instrument is best suited for targeting different types of climate activities is highly case-specific. For example, instruments such as grants are very well suited for capacity building and for adaptation measures in most vulnerable countries, whereas concessional loans are best suited for projects with high risk-return profiles such as utility-scale renewable energy projects and power transmission grids. Other financial tools are better suited for attracting private sector finance in more mature markets, such as green bonds and equity.

The importance of a new bottom-up approach

The 2009 Copenhagen Climate Change Conference (COP 15) highlighted how the top-down approach adopted in climate negotiations and climate agreements had been a failure, and launched the new bottom-up approach. This approach has now become even more urgent and should be followed in the negotiations leading to the 2015 climate agreement.

The introduction of the Intended Nationally Determined Contributions (INDCs) at COP 19 in Warsaw was a clear signal that each nation is responsible for pledging its own contributions for post-2020 action. This means that each individual country (INDCs indeed refer both to developed and developing countries’ plans) is being asked to come forward with its own ambitions and plans for carbon reduction. INDCs put forward by countries will form a key input to the negotiations leading towards the 2015 climate agreement. It is worth recalling that the minimum characteristics required for the INDCs are those of comprehensiveness, transparency, and ambition.

INDCs bring together elements of a bottom-up system, in which countries put forward their contributions in the context of their national priorities, circumstances and capabilities, with a top-down system, in which countries collectively aim to reduce global emissions. As a result, INDCs can create a constructive feedback loop between national and international decision-making on climate change.

Although the bottom-up system is positive in terms of raising consciousness on climate change issues, it may be risky for two reasons. The first is that without a defined target the risk of free riding is high, and the second is that it keeps the differentiation of responsibility for poorer countries not having the resources for undertaking climate actions. This risk is reinforced by the fact that the principle of common but differentiated responsibility has been kept in the Lima Call for Climate Action, and also by the consideration that the term “contribution” was the result of a compromise of the terms “commitment” used until then for developed countries and “nationally appropriate mitigation actions” (NAMAs), used until then for developing countries. Moreover, the fact that in COP 20 Decisions there is no mention of the division between Annex I and non-Annex I parties, but only a weak reference to different contributions “in light of different national circumstances” is not clear enough and could lead to weakening climate actions.

Conclusions

The need for scaling up climate finance has been widely acknowledged by all Conference of the Parties’ countries, and this is recognised by the central debate at COP 20 around the role of the Green Climate Fund (GCF), with its initial capitalization under way, and its Private Sector Facility that will be a very useful tool for catalizing a significant multiplier effect in attracting private finance.

The recognition of the growing role of private finance, also due to constrained public budgets, encourages even further the strengthening of enabling environments conducive to private investors, better coordination at various levels, and the improvement of transparency by enhancing Measurement, Reporting and Verification (MRV) systems. Also, the role of Public-Private Partnerships should be strengthened and officially recalled in the climate agreement as one of the most useful tool for attracting private finance. Among more direct measures, the 2015 climate agreement could play a very important role in mandating the operating entities under the Convention, i.e. the GCF and the GEF, to prioritise some part of their funding to specific regions or countries, or issues where climate finance would not be directed automatically.

The 2015 climate agreement should definitely cope with this lack of transparency and better clarify the differentiation of responsibility in all fields of climate action, both in mitigation and adaptation. Moreover, the agreement should forge a clear link to the new set of Sustainable Development Goals (SDGs) that the world’s governments are currently negotiating and that will be adopted at the “UN Summit for the adoption of the post-2015 development agenda” next 25-27 September in New York. The climate agreement and the SDGs should be seen as complementary, and lead to important opportunities for mutual benefits in areas such as the transition to a low carbon society, climate adaptation and resilience, and the new financial flows needed for both mitigation and adaptation actions.

Furthermore, a review of financial and insurance standards to promote long-term finance should be encouraged. Both Basel III and Solvency II should be reviewed to allow for a further mobilisation of private finance, especially towards needed energy infrastructure investment, which is usually long-term. Estimates by UNCTAD show that in climate change mitigation, and in particular in relevant infrastructures for renewable energy generation and research and deployment of climate friendly technologies, the total annual investment required between 2015 and 2030 is in the range of 550-850 US$ billion, and the annual investment gap is still very high, at 380-680 US$ billion.

In conclusion, although it is true that at COP 20 the debate was more on distributional issues i.e. how much will developing countries receive and how much will they contribute, rather than on efficiency issues and that “the Green Climate Fund will be far from covering both the required investments in adaptation, particularly in developing countries, and the costs to support the transition to a low-carbon economy”, this reflections aims at highlighting some potential positive actions that the 2015 climate agreement could concretely undertake in the way forward to the longstanding debate on climate finance.

(Image: UN event on “Mobilizing Long-term Climate Finance for Developing Countries”, 2011. Photo credit:UN Climate Change/Flickr)

Credit: Climate Policy Observer

Finance for Climate Action Flowing Globally – Upwards of 650B in 2011-2012

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Credit: United Nations Framework Convention on Climate Change

 Finance for Climate Action Flowing Globally stood at $650 Billion annually in 2011-2012, and possibly higher
Annual public and private flows from developed to developing countries
 ranged from $40 to $175 billion
Dedicated multilateral climate funds - including UNFCCC funds – represented small shares during the same period, but are set to rise with the recent pledges to the Green Climate Fund
 amounting to nearly $10 billion
There is relative uncertainty in the global figures in part due to data gaps and other limitations, but efforts to improve the quality of measurement and reporting of climate finance flows are under way

Hundreds of billions of dollars of climate finance may now be flowing across the globe annually according to a landmark assessment presented yesterday to governments meeting in Lima, Peru at the UN Climate Convention meeting.

The assessment – which includes a summary and recommendations by the UNFCCC Standing Committee on Finance and a technical report by experts – is the first of assessment reports that puts together information and data on financial flows supporting emission reductions and adaptation within countries and via international support.

The assessment puts the lower range of global total climate finance flows at $340 billion a year for the period 2011-2012, with the upper end at $650 billion, and possibly higher.

  • Support from developed countries to developing countries amounted to between $35 and $50 billion annually, with multilateral development banks (MDBs), climate-related Official development Assistance (ODA) and other official flows (OOF) representing significant shares of resources channelled through public institutions.
  • Funding through dedicated multilateral climate funds – including UNFCCC funds ($ 0,6 billion) – represented smaller shares during the same period, and do not include the recent pledges for the Green Climate Fund amounting to nearly $10 billion.

The assessment notes that the exact amounts of global totals could be higher due to the complexity of defining climate finance, the myriad of ways in which governments and organizations channel funding, and data gaps and limitations – particularly for adaptation and energy efficiency.

In addition, the assessment attributes different levels of confidence to different sub-flows, with data on global total climate flows being relatively uncertain, in part due to the fact that most data reflect finance commitments rather than disbursements, and the associated definitional issues.

The assessment is an important contribution of the Standing Committee on Finance that enhances transparency and clarity on climate finance flows – including information on international support to developing countries.

In addition, the assessment includes a set of recommendations by the Standing Committee on Finance to the Conference of the Parties, which, among other things, include ways to strengthen transparency and accuracy of information on climate finance flows through working towards a definition of climate finance and further efforts that would enable better measurement, reporting and verification.

The assessment also recognizes the need for understanding the impacts of climate finance associated with emissions reductions and activities to boost resilience to climate change.

The 2014 Biennial Assessment and Overview of Climate Finance Flows has been prepared by the Standing Committee on Finance following a mandate by the Conference of the Parties. The 2014 report was prepared with input from a wide range of experts and contributing organizations that collect data on climate finance flows.

Christiana Figueres, Executive Secretary of the UNFCCC, said: “Finance will be a crucial key for achieving the internationally-agreed goal of keeping a global temperature rise under 2 degrees C and sparing people and the planet from dangerous climate change”.

“Understanding how much is flowing from public and private sources, how much is leveraging further investments and how much is getting to vulnerable countries and communities including for adaptation is not easy, but vital for ensuring we are adequately financing a global transformation,” she said.

“I would like to thank the Standing Committee on Finance and the numerous experts and organizations who have contributed to this important assessment. It provides a baseline and a foundation upon which future assessments and more importantly future climate action can be refined and focused,” said Ms. Figueres.

“This first biennial assessment represents a milestone of the work of the Standing Committee on Finance. It is an important information tool for Parties to the Convention that provides a picture of climate finance flows and how they relate to climate actions, including the objectives of the Convention” said Standing Committee on Finance co-chairs Diann Black Layne and Stefan Schwager.

“Going forward, the Standing Committee on Finance will contribute further to improvements in the information on climate finance flows, including through collaborations with data collectors and aggregators,” they added.

More Facts and Figures from the 2014 Biennial Assessment and Overview of Climate Finance Flows Report:

  • Global total flows: Most climate finance in 2011/2012 is raised and spent at home–in developed countries 80 per cent of the funds deployed for climate action are raised domestically.
  • The same pattern is seen in developing countries where just over 71 per cent comes from national sources
  • Around 95 per cent of global total climate finance is spent on mitigation or cutting emissions with 5 per cent on adaptation.
  • Subsidies for oil and gas and investments in fossil fuel-fired generation are almost double the global finance for addressing climate change
  • Flows from developed to developing countries: Multiple sources were involved in providing funding to support climate action in developing countries ranging from Multilateral Development Banks (MDBs) and Overseas Development Assistance (ODA) to multilateral climate funds – including funds administered by the Operating Entities of the Financial Mechanism of the Convention and the Kyoto Protocol.
  • For example, finance from MDBs is around between $15 and $23 billion annually; multilateral climate funds including via the GEF were about $1.5 billion, including those linked to the UNFCCC at about $0.6 billion a year.
  • 48 to 78 per cent of finance is reported as fast-start finance (2010-2012), in Biennial Reports (2011-2012), through multilateral climate funds, and through MDBs supports mitigation, or other/multiple objectives (6 to 41 per cent)
  • Adaptation finance in the same sources ranges from 11 per cent to 24 per cent.

Notes to Editors

The assessment has tried to identify the flows to various sectors and initiatives–real precision in this area will have to await future assessments and the numbers need to be treated with caution.

Adaptation Investments Unclear

Assessing investments in adaptation is particularly difficult often because they can form part of a larger project such as an investment in a port of water supply system.

Meanwhile, there is also no universal operational definition of what constitutes adaptation and in addition publicly funded adaptation actions within countries–both developed and developing–is rarely reported or available.

As a result, flows from developed to developing countries are not really known with precision.

The biennial assessment and overview of climate finance flows can be found on the UNFCCC website.

About the UNFCCC

With 196 Parties, the United Nations Framework Convention on Climate Change (UNFCCC) has near universal membership and is the parent treaty of the 1997 Kyoto Protocol. The Kyoto Protocol has been ratified by 192 of the UNFCCC Parties. For the first commitment period of the Kyoto Protocol, 37 States, consisting of highly industrialized countries and countries undergoing the process of transition to a market economy, have legally binding emission limitation and reduction commitments. In Doha in 2012, the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol adopted an amendment to the Kyoto Protocol, which establishes the second commitment period under the Protocol. The ultimate objective of both treaties is to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system.

Credit: UNFCCC Press page

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UNFCCC Executive Secretary Christiana Figueres on Twitter: @CFigueres
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Caribbean seeks to take full advantage of new U.N. climate fund

Dr Kenrick Leslie, CBE; Credit: Earl Green

Dr Kenrick Leslie, CBE; Credit: Earl Green

The South Korea-based Green Climate Fund (GCF) is open for business, and Caribbean countries are hoping that it will prove to be much more beneficial than other global initiatives established to deal with the impact of climate change.

“Despite our region’s well-known, high vulnerability and exposure to climate change, Caribbean countries have not accessed or mobilised international climate finance at levels commensurate with our needs,” said Dr. Warren Smith, the president of the Barbados-based Caribbean Development Bank (CDB).

The CDB, which ended its annual board of governors meeting here on Thursday, May 29, had the opportunity for a first-hand dialogue on the operations on the GCF, through its executive director, Hela Cheikhrouhou, who delivered the 15th annual William Demas Memorial lecture.

But even as she addressed the topic “The Green Climate Fund; Great Expectations,” Smith reminded his audience that on a daily basis the Caribbean was becoming more aware of the severe threat posed by climate change.

“Seven Caribbean countries…are among the top 10 countries, which, relative to their GDP, suffered the highest average economic losses from climate-related disasters during the period 1993-2012.

“It is estimated that annual losses could be between five and 30 percent of GDP within the next few decades,” he added.

According to a Tufts University report, published after the 2007 Intergovernmental Panel on Climate Change (IPCC) study and comparing an optimistic rapid stabilisation case with a pessimistic business-as-usual case, the cost of inaction in the Caribbean will have dramatic consequences in three key categories. Namely hurricane damages, loss of tourism revenue and infrastructure damage due to sea-level rise.

The costs of inaction would amount to 22 percent of GDP for the Caribbean as a whole by 2100 and would reach an astonishing 75 percent or more of GDP by 2100 in Dominica, Grenada, Haiti, St. Kitts and Nevis, and Turks and Caicos.

“In the Caribbean, the concern of Small Island Developing States is all too familiar – the devastating effects of hurricanes have been witnessed by many. Although Caribbean nations have contributed little to the release of the greenhouse gases that drive climate change, they will pay a heavy price for global inaction in reducing emissions,” Cheikhrouhou warned.

Executive director of the Belize-based Caribbean Community Climate Change Centre (CCCCC), Dr. Kenrick Leslie told IPS that regional countries were now putting their project proposals together to make sure they could take full advantage of the GCF.

“The CARICOM [Caribbean Community] heads of government, for instance have asked the centre to help in putting together what they consider bankable projects and we are in the process of going to each member state to ensure that we have projects that as soon as the GCF comes on line we would be among the first to be able to present these projects for consideration.”

Leslie said that in the past, Caribbean countries had been faced with various obstacles in order to access funds from the various global initiatives to deal with climate change.

“For instance if we mention the Clean Development Mechanism [CDM], the cost was prohibitive because our programmes were so small that the monies you would need upfront to do it were not attractive to the investors.”

He said the Caribbean also suffered a similar fate from the Adaptation Fund, noting “we have moved to another level where they said we will have greater access, but again the process was much more difficult than we had anticipated.”

The GCF was agreed at the 16th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Cancun, Mexico.  Its purpose is to make a significant contribution to the global efforts to limit warming to 2°C by providing financial support to developing countries to help limit or reduce their greenhouse gas emissions, and to adapt to the unavoidable impacts of climate change. There are hopes that the fund could top 100 billion dollars per annum by 2020.

“Our vision is to devise new paradigms for climate finance, maximise the impact of public finance in a creative way, and attract new sources of public and private finance to catalyse investment in adaptation and mitigation projects in the developing world,” the Tunisian-born Cheikhrouhou told IPS.

She said that by catalysing public and private funding at the international, regional, and national levels through dedicated programming in climate change mitigation and adaptation, and as a driver of climate resilient development, the GCF is poised to play a relevant and timely role in climate action globally.

Cheikhrohou said that it would be most advisable if Caribbean countries “can think of programmatic approaches to submit proposals that are aggregating a series of projects or a project in a series of countries.”

She said that by adopting such a strategy, it would allow regional countries “to reach the scale that would simplify the transaction costs for each sub activity for the country” and that that she believes the GCF has “built on the lessons learnt from the other mechanisms and institutions in formulating our approach.

“To some extent there is embedded in the way of doing work this idea of following the lead of the countries making sure they are the ones to come forward with their strategic priorities and making sure we have the tools to accompany them through the cycle of activities, projects or programmes starting with the preparatory support for the development of projects,” she told IPS.

Selwin Hart, the climate change finance advisor with the CDB, said the GCF provides an important opportunity for regional countries to not only adapt to climate change but also to mitigate its effects. He is also convinced that it would assist the Caribbean move towards renewable energy and energy efficiency.

“The cost of energy in the Caribbean is the highest in the world. This represents a serious strike on competitiveness, economic growth and job creation and the GCF presents a once in a lifetime opportunity for countries to have a stable source to financing to address the vulnerabilities both as it relates to importing fossil fuels as well as the impacts of climate change,” he said.

Credit: Thomas Reuters Foundation; CMC/pr/ir/2014

Post-COP 19 Round-up: Six outcomes welcomed by the Caribbean

(Left to Right) Selwin Hart, Dr. Kenrick Leslie, Dr. Ulric Trotz

(Left to Right) Selwin Hart, Dr. Kenrick Leslie, Dr. Ulric Trotz

Caribbean Climate released a widely reviewed post called COP 19 – Five things the Caribbean anticipates in the lead up to the 19th session of the Conference of the Parties (COP 19) to the UNFCCC and the ninth session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol. Several decisions were taken at the event in Warsaw, Poland that are of particular relevance and importance to the Caribbean.

  • The region successfully lobbied for the establishment of a Loss and Damage Mechanism.
    The Warsaw International Mechanism for Loss and Damage consists of an Executive Committee, which will develop the modalities to assist developing countries that suffer loss and damage from extreme events and slow onset events precipitated by climate change. While it does not explicitly mention a compensation mechanism as demanded by vulnerable countries, it does not prohibit the Executive Committee from discussing it. The Mechanism has been established under the Cancun Adaptation Framework even though the position of the Caribbean is that loss and damage goes beyond what can be accomplished through adaptation.
  • Agreement reached to reduce emissions from the forest sector in developing countries. Norway, the United Kingdom and the United States of America pledged US$280 million to support these actions. This will be of particular relevance to CARICOM countries such as Belize, Guyana and Suriname.
  • The Adaptation Fund Board (AFB) reached its target of mobilizing US$100 million to fund the six projects in its pipeline. These include a project in Belize, which had been submitted by PACT, one of only two National Implementing Entities (NIE) in the Caribbean accredited to the Adaptation Fund. The other NIE is in Jamaica, which has also received funding for its project.
  • The Climate Technology Centre and Network (CTCN) is now fully operational. This follows the COP's adoption of CTCN's modalities and procedures. Starting December 8, 2013, Caribbean countries can submit their technology requests to the CTCN, which is hosted by UNEP's Danish office.
  • The Green Climate Fund (GCF) has been operationalized. Developed countries have been asked to channel a significant portion of their US$100 billion per annum pledge for climate change though the GCF.  The Board of the GCF has been tasked with ensuring that there is an equitable balance of funding for both adaptation and mitigation. All developing countries are eligible for funding from the GCF.
  • Parties to the Convention agreed to continue to work towards establishing a new legally binding climate change agreement by 2015.  This would be achieved through the convening of a high-level Ministerial dialogue in June next year to increase the mitigation pledges by developed countries and the summit to be convened by the Secretary General of the UN in September 2014. A draft negotiating text should be available at COP 20 next year to enable Parties to finalize the agreement in Paris at COP 21 in December 2015.

We welcome these developments and will continue to advance the region’s interest.

Also read: COP 19 – Five things the Caribbean anticipates

COP 19 – Five things the Caribbean anticipates

The 19th session of the Conference of the Parties (COP 19) to the UNFCCC and the ninth session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol will take place next week (November 11-22). The conference will be held at the National Stadium in Warsaw, Poland.

 Five possible outcomes that will benefit the Caribbean:
  • COP 19 is billed by many as the "Finance COP". A Ministerial high level segment will address issues on long term financing for developing countries. A pathway detailing how donor countries will honour the US$100 billion a year by 2020 pledge made at the 2009 U.N summit in Copenhagen, accompanied by interim targets and a private sector engagement plan would benefit the region.

Currently, there’s no specific date for donor pledges to begin, but developing countries have already contributed a majority of emissions reductions even without promised support from developed countries.

  • Operationalization of REDD+ activities. The region's heavily forested countries, particularly Belize and Guyana, are facing increased deforestation and would benefit from comprehensive programmes aimed at addressing this problem.
  • Raise mitigation ambition. The development of a road map to use the Ministerial summit scheduled for next year to increase the level of mitigation ambition, specifically cutting emissions substantially to limit global warming to 2°C.
  • Establish Loss and Damage Mechanism. A decision to establish such a mechanism would allow for the provision of compensation to countries that have suffered and will continue to suffer irreparable damage and loss due to climate change.
  • Draft the new CCA.  A significant shift from general discussions to the drafting stage for the new climate change agreement (CCA), the successor to Kyoto, would advance the likelihood that the negotiating text can be produced by the end of 2014 and ultimately allow for copious perusal and discussion.

Under Decision 1/COP.17, the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) was given the  ambitious mandate: first, to deliver by 2015 a new international climate change agreement that brings all Parties together in taking action on climate change, and second, to undertake essential work on enhancing pre-2020 mitigation ambition. Success depends on all Parties and the Co-Chairs of the ADP working together to make the best use of the time available, guided by a clear plan of work.

**Bookmark this page for regular updates from the 5Cs’s delegation at COP 17.

Three criteria the Green Climate Fund MUST meet for the Caribbean to benefit

Credit: CGIAR Challenge Program on Water and Food

Credit: CGIAR Challenge Program on Water and Food

President of the Caribbean Development Bank (CDB) Dr. Warren Smith says the Green Climate Fund (GCF), a new multilateral initiative, must achieve three short-term objectives if it is to be different, make a significant contribution to transforming Caribbean economies and create low carbon, climate-resilient societies in the region.

  • First, the Board of the Fund must complete before year-end, the design work necessary to ensure that the Fund becomes operational by 2014.
  • Second, given the global scale of the climate challenge, the GCF must be well resourced. In this regard, developed countries should, by the end of this year, make firm commitments towards resourcing the initial capitalisation of the GCF;
  • Third, this Fund must pay particular attention to the needs of those developing countries which are most vulnerable to climate change.

In underscoring the importance of this Fund, Dr. Smith said,

We, in the Caribbean, share the vision of the founders of this Fund, as enunciated in its Governing Instrument that, “given the urgency and seriousness of climate change …the Fund is to make a significant and ambitious contribution to the global efforts towards attaining the goals set by the international community to combat climate change”

He continued…

To ensure that [developing] countries can access the Fund on equal terms, when it is fully operational, the Board must advance, in a meaningful manner, its work programme on climate finance readiness and preparatory support.

The  GCF Board members from Barbados and Zambia, representing the Small Island Developing States and Least Developed Countries constituencies, have called for the prioritisation of activities related to readiness and preparatory support during the design of the Fund, as developing countries in these groups have, traditionally, not accessed climate finance at levels commensurate with their high vulnerability to climate change.

Take, for example, the case of the Caribbean. Of the 694 national projects approved by the Global Environment Facility (GEF) under its climate change focal area between FY 1991 and FY 2013, only 33 national projects from CARICOM countries received support. This represents a mere USD24 million or less than 1% of the total USD2.5 billion grant financing provided by the GEF for national climate action. The amount allocated to the Caribbean must be seen in the context of a worsening of the climate change phenomenon and of economic losses in excess of USD1 billion in three Caribbean countries for 2012 alone.

This inability of Caribbean countries to access climate financing can be directly attributed to institutional constraints; to difficulty in identifying priorities and developing coherent investment programmes; and to serious deficiencies in capacity to effectively and efficiently implement projects and programmes.
It is extremely important to note that, in general, the burdensome criteria attached to accessing resources are often by themselves a deterrent to access.

The situation is complicated by the monitoring and reporting requirements to evaluate outcomes.
Therefore, if these countries and other countries with similar capacity constraints are to benefit from the GCF, it is crucial that focus is placed on “climate finance readiness” at the national, regional and international levels ~Dr. Warren Smith

Despite these challenges, Dr. Smith notes that there is consensus, at the highest political levels in the Caribbean, on the way forward.

Leaders have endorsed a Regional Climate Change Strategy and Implementation Plan to guide national and regional efforts towards building climate-resilient, low-carbon economies. This effort will require transformational change by national governments, regional organisations, civil society and the private sector, underpinned by an unprecedented level of financial resources and technical assistance. Within the context of the regional Implementation Plan, CDB has been assigned, and takes seriously, the role of spearheading the Region’s resource mobilisation efforts.

Dr. Smith says the region must boost  capacity (policy, institutional, expertise and accountability) and develop investment-ready, low-carbon climate-resilient projects and programmes to benefit from the GCF and other new flows of low-carbon, climate-resilient financing.

Dr. Smith was speaking at the launch of the Green Climate Fund Workshop on Climate Finance Readiness in Barbados on July 11, 2013. Read his speech here.

** The workshop was convened by CDB, in partnership with the Green Climate Fund and the Government of Germany through GIZ.

Dr. Kenrick Leslie, CBE, Executive Director of the Caribbean Community Climate Change Centre, also spoke at the workshop. See highlights of his speech here and/or review the actual speech here.

Also read: Dr. Ulric Trotz says the Caribbean lags in climate finance

Where’s the Caribbean component of “Turn Down the Heat”?

Executive Director Dr. Kenrick Leslie, CBE

Executive Director Dr. Kenrick Leslie, CBE

Executive Director of the Caribbean Community Climate Change Centre Dr. Kenrick Leslie, CBE, says “it would be informative and useful” if a Caribbean-centred study akin to the World Bank’s Turn Down the Heat: Climate extremes, regional impacts and the case for resilience, which focuses on Sub-Saharan Africa, South East Asia and South Asia, is conducted.

Turn Down the Heat says it is now very likely that the increase in average global temperature could be as high as 4oC, 2.5 oC more than what the Centre has advocated as a critical threshold for the region since 2009— a position strongly supported by the latest science.

Whereas the World Bank Report dealt in depth with the impact of a 3oC to 4oC temperature rise on the risks of climate change to development in Sub-Saharan Africa, South East Asia and South Asia, such an in depth study is yet to be done for our region which is considered one of the most vulnerable to the impacts of Climate Change.

Such a study is particularly important for the region as the Intergovernmental Panel on Climate Change (IPCC) highlighted the Caribbean as one of the most vulnerable areas to Climate Change in its Fourth Assessment Review. It further recommended that average global temperature should not exceed 2oC if the region was to avoid significant climate and development impacts.

Dr. Leslie was speaking at the recently concluded (July 15-16) Caribbean Regional Workshop on Climate Change Finance and the Green Climate Fund in Barbados.

Review Dr. Leslie’s speech here. Learn more about Turn Down the Heat.

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