EU has confirms budget for next seven years, directing €180bn towards climate finance, with €15bn to go towards developing countries
By Sophie Yeo in Warsaw
20% of the EU’s budget will go towards fighting climate change, climate commissioner Connie Hedegaard announced in Warsaw today.
This equates to €180 billion on climate spending between 2014 and 2020, which will be used to reduce emissions domestically and help developing countries adapt to climate change—three times what was provided in the previous budget.
Much of this will be spent on domestic projects, helping with the development of climate-smart agriculture, energy efficiency and the transport sector.
Over the next seven years, €15 billion from the EU’s overseas development budget will be ringfenced for climate spending. This is separate from what is provided each year by individual member states. For instance, the UK will provide £3.87bn of international climate aid between 2011 and 2015.
Speaking at a press conference in Warsaw today, EU climate commissioner Connie Hedegaard said that if the world is successfully going to tackle climate change “one of the things we need is to change is the whole economic paradigm, including the way we construct our budgets.” She added that Europe is the first region to construct its budget in this way.
Dr Celine Herweijer, partner at consultancy firm PwC says that, with high-level discussions on climate finance taking place tomorrow, other countries may soon announce similar policies.
“The EU finance announcement will hopefully be followed by many others in the coming hours and days. Finance holds the key to unlocking the stalemate we are seeing on the post 2020 agreement,” said Herweijer.
But she added: “Whether we’ll get the scale of movement on finance we need is unlikely. Targets of $60bn-$70bn by 2016 have been mentioned by some of the developing country groupings. Getting there would be a huge outcome.”
This will be the first time that there has been a ministerial dialogue dedicated to climate finance. The purpose of the discussion is to find a way to scale up the finance promised by developed countries to the US$ 100bn they have promised to deliver annually from 2020 to be delivered through the Green Climate Fund (GCF).
It comes with high expectations. “Countries have known about this for a long while,” says Liz Gallagher, senior policy advisor at E3G. “I get a sense there’s going to be some announcements on a range of different issues associated with finance. Whether that will be enough to placate and temper some of the quite heightened frustration in these negotiations, I don’t know.”
Green Climate Fund
There has been some doubt over whether the GCF will be able to harness the level of funding that was promised at UN climate talks in Cancun in 2010. At a press conference today, UN chief Ban Ki-moon called the Fund an “empty shell” and urged developing nations to fulfill their promise to supply $100bn.
“We need a lot of resources and financial resources is the most important and quickest way [of addressing climate change],” he said.
But speaking today in Warsaw, Manfred Konukiewitz, co-chair of the GCF board, said that the fund was “on track”, and that there was a “good chance” that the fund would be capitalised in 2014.
But while he said that the “window is now open” for countries to make a success out of the GCF “it won’t stay open for an unlimited time.” He stressed that the credibility of the UN climate process depended on successful capitalisation of the fund.
“Looking at the entire year we have the opportunity to really bring the fund to the point where it can mobilise resources and where it can spend money,” he said. “If we miss that opportunity we have a problem because that will certainly not be good for the credibility of this whole process and we don’t know when the next such opportunity will arise.”
Hedegaard said that EU contributions to the GCF remained dependent on the eventual mechanisms contained within the fund, but said that once it was set up, many member states would be ready to contribute.