Japan’s climate finance plan welcomed by vulnerable nations

By John Parnell

Frustrated climate vulnerable nations are turning to a Japanese low carbon scheme to fill the international climate finance void.

The Maldives is set to become the latest country to forge a bi-lateral partnership with Japan to exchange carbon credits for technology, finance and logistical support for projects to reduce carbon and protect against the impacts of climate change.

The Green Climate Fund (GCF) has been set the target of raising $100bn a year by 2020. It was first suggested formally in 2009 and is still progressing through red tape, albeit at an increased pace.

“There was high expectation from developing countries that the GCF could stand up straight away and start financing projects but that didn’t happen,” Kuni Shimada, a senior climate negotiator for the Japanese government told RTCC.

Shimada says nations eager to get projects off the ground are not waiting for the Green Climate Fund (Source: Flickr/©IISD reporting services)

“Nothing happened with financial mechanisms or technology transfer at the Doha climate talks. There is an illusion in many developing countries that the GCF is up and running and ready to provide financial assistance but that has not happened yet.

“That’s why in order for countries to have the actual mitigation and adaptation benefits, rather than waiting for the GCF or for some international agreement through the UNFCCC, we decided to have some actual projects on the ground in advance of the negotiated outcome,” said Shimada.

Shopping list

The Maldives join Mongolia, Kenya, Ethiopia and Bangladesh in working with Japan through the Joint Crediting Mechanism (JCM).

Shimada said as well as getting projects up and running on the ground more quickly, the JCM also allows the host nations to dictate exactly what help it is that they need the most.

“The hosts need to come up with the priority areas in terms of technology and projects. So for example in Mongolia they are looking for some assistance in fossil fuel technologies with respect to efficiency and code of practices,” he said.

“We then come up with a list of what we can offer. Bilaterally we can directly discuss what Japan can provide and what ideas the host would like to explore. Everything is tailor made.”

Shimada revealed that as well as strong interest from Africa, Mexico, Chile and Peru have expressed an interest in the JCM.

Part of 2015 deal

Negotiations on the 2015 global climate treaty continue in Poland this November. Part of the new universal deal will be a ‘financial mechanism’ to incentivise emissions reductions.

The current UN offset market is struggling with the near-zero price of carbon credits deterring project developers from getting involved.

Regional and national carbon markets have had mixed success so far. It is unclear what form the new mechanism will take but Shimada said interest in the JCM could see it form part of the outcome.

“Our end goal is for this bilateral mechanism to be included in the end agreement that will be done by 2015,” he said.

“Even for this year’s COP talk, the hosts, the Polish government seem to be quite interested. Their advisors have already mentioned the Japanese scheme explicitly. One of the key criteria for success COP19 is to have some package for the new market mechanism.”

Shimada admits that the scheme is not perfect. The projects tend to be small and that can make them less cost effective. Also of concern is the volume of work being channelled through one donor government.

“The interest is high but there is a limit as to how much can be done. It’s not about the money it’s about human resources. There are quite a few people who can talk about this in the government but if they travel to the capitals of these countries it takes time and energy. That’s a concern.”

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