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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.
The Caribbean Community Climate Change Centre held the second in a series of Climate Change Exchange events last Thursday in Belize City. The first was held in Barbados last October. The event, which was held with support from the European Union – Global Climate Change Alliance (EU -GCCA) Programme and the United Kingdom’s Department for International Development (DFID) under the DFID ARIES project, sought to raise awareness and promote dialogue about COP 21 slated to be held in Paris later this year, the United National (UN) Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), and the range of work done by the Centre across the Caribbean over the last decade.
The widely supported event attracted over 150 guests drawn from the apex of government, the diplomatic corps, the scientific community, civil society, development partners, universities, local and regional media and the general public. It was also live-streamed and broadcast live on four television stations (Krem, Love, Channel 5 and Channel 7) and two radio stations (Krem and Love) in Belize. The event was also covered by the Barbados-based Caribbean Media Corporation and Jamaica’s CVM TV.
An impressive set of international, regional and national experts addressed the audience, including Professor Christopher Fields and Dr Katherine Mach of Stanford University, Mr Carlos Fuller, a veteran Caribbean negotiator, Dr Leonard Nurse, a member of the IPCC’s research and author teams for four global assessment reports and three key project managers.
Peruse the Speakers' Guide to learn more about our speakers.
Why is COP 21 Important?
This key public education event was held as 2015 is shaping up to be a landmark year for global action on Climate Change. The future of the Caribbean depends on a binding and ambitious global agreement at COP 21. A bold agreement that curbs greenhouse gas emissions to limit the global rise in temperature to below 2°C is needed to safeguard our survival, food, critical industries such as tourism, infrastructure and promote renewable energy.
Peruse our informational card "Why is COP 21 Important?" for more context and the region's 11 point negotiating position leading up to COP 21.
Here’s the Agenda to guide you as you peruse the evening’s key presentations (below).
Keynote Address by Professor Christopher Field and Dr. Katharine Mach of Stanford University
Keynote Address by Carlos Fuller, International and Regional Liaison Officer at the CCCCC –
CCCCC's Programme Development and Management Presentation by Dr. Mark Bynoe, Sr Economist and Head of the Programme Development and Management Unit at the CCCCC
EU -GCCA Presentation by Joseph McGann , EU - GCCA Programme Manager at the CCCCC
KfW Presentation by Kenneth Reid, KfW Programme Manager at the CCCCC *Click all hyperlinks to access relevant files/webpages.
The Georgetown, Guyana-based Iwokrama International Centre for Rainforest Conservation and Development requests proposals from private and public companies, institutions, Universities and other organizations engaged in tropical rainforest conservation. The proposal offers an opportunity to partner with the Centre, with a particular focus on climate change and land use issues, to enhance revenue generating activities for the Centre.
The partnership is intended to boost the Centre’s science and research activities and enable it to become a vibrant, innovative and leading international research programme.
The Centre requests that interested parties include evidence of resources, capacity and related experience in their proposal.
Click here to peruse the RFP for details.