EU fast start finance claims ‘misleading’ say observers

By John Parnell

The EU’s claims to have met its climate finance commitments between 2010-2012 have been branded as “misleading”.

Developed nations pledged to provide US$30bn between 2010 and 2012 under the Fast Start Finance initiative and the EU has said it has provided its fair share.

“Despite difficult economic circumstances, the European Union has met and even surpassed its fast start finance pledge to developing countries by providing more than €7.3bn of climate finance,” Connie Hedegaard, EU climate action commissioner announced on Tuesday.

Mattias Söderberg, climate advisor for the ACT Alliance said these claims are confusing could damage trust between rich and poor nations at a delicate time in the UN climate talks.

“These figures are misleading. A big portion of the EU Fast Start Finance consists of loans, and these funds will return to EU member states, with an interest. Why should poor people pay the bill for rich people’s emissions?” said Söderberg.

“The EU broke a promise when they prioritized mitigation before adaptation. This is very unfortunate, and a provocation to developing countries, facing an urgent need to adapt to the effects of climate change,” he added.

A report released by the International Institute for Environment and Development (IIED) towards the end of 2012 showed that the EU had pledged $6.39bn.

A condition of governments’ climate finance contributions agreed at the UN climate talks in Copenhagen, is that it is “new and additional” rather than transferred from existing aid budgets.

“Many EU member states have changed the label on existing funds, from ‘development aid’ to ‘climate finance’. In extreme cases it may lead to situations where HIV/AIDS projects in southern Africa are closed, to enable investments in windmills in emerging economies,” warned Söderberg.

The UN climate talks meet next month to continue work on the 2015 global emissions deal and finance has become a central part of the argument.

The new agreement would ask developing nations to agree to some form of binding commitment to limit greenhouse gas emissions but they argue that without the technical, logistical and financial support to help them transition to low carbon economies.

The Green Climate Fund (GCF) will be the vehicle for climate finance once work on its rules and procedure are finalised. It has the target to raise $100bn a year from 2020 onwards.

There was frustration at the last round of talks in Doha that there was no timetable on how to hit the target.

EU officials RTCC has spoken to privately, acknowledged that the bloc needs to work on “a better narrative of how it can hit $100bn by 2020”.

The EU and other developed nations have been criticised for turning to the private sector to provide climate finance. They argue this is the most efficient way to secure large volumes of funding.

Critics argue that private finance will not be interested in funding climate adaptation projects where there is often no clear return on investment.

A number of developing countries meeting in London last week said “the age of aid was over” and that they needed cooperation not finance, in order to meet the challenge posed by climate change.

“We should rethink international cooperation, of which we need far more in this globalised world, and rethink it in terms of something other than north giving aid to south,” said Dipak Gyawali. “That should not be the driving force anymore,” he said.

2012 fast start finance pledges (IIED):

CLICK TO ENLARGE

Read more on: Climate finance | Climate Politics | EU