Finance: Key Agenda Item of UN Climate Change Negotiations

Editor’s Note:  This article first appeared in the International Development Journal, an online journal offering a platform to engage in debate and discussions on global policies and current affairs.

 

The provision of finance is set to be a key item on the agenda at the upcoming United Nations Conference of Parties (COP) 23 climate change negotiations. The conference is being convened under the Presidency of Fiji and will take place at the World Conference Center in Bonn, Germany between 6 and 17 November 2017. An overview schedule is already available online.

Fiji’s Prime Minister Frank Bainimarama, in his ‘To Bonn and Beyond’ welcome address has called on every nation to play “Its part to combat the rising sea levels, extreme weather events and changing weather patterns associated with climate change.” He adds “I intend to act as COP President on behalf of all 7.5 billion people on the planet.”

He also credits the importance of obtaining finance and directing it towards climate adaptation and resilience building efforts. “We must work together as a global community to increase the proportion of finance available for climate adaptation and resilience building. We need a greater effort to develop products and models to attract private sector participation in the area of adaptation finance. To this end, I will be engaging closely with governments, NGOs, charitable foundations, civil society and the business community.”

The importance of climate finance is emphasised by the United Nations Framework Convention on Climate Change (UNFCCC) who state that it “Is critical to addressing climate change because large-scale investments are required to significantly reduce emissions, notably in sectors that emit large quantities of greenhouse gases. Climate finance is equally important for adaptation, for which significant financial resources will be similarly required to adapt to the adverse effects and reduce the impacts of climate change.”

Not all countries are expected to make equal financial contributions. Due to the Convention’s principle of common but differentiated responsibility and respective capabilities, developed country Parties are expected to provide financial resources to developing country Parties to help them implement the objectives of the UNFCCC. Such a principle raises challenges for both developed and developing country Parties.

For developing country Parties wishing to create and implement climate change adaptation and mitigation programs, they need to know that financial resources are predictable and sustainable. They should also be confident that the channels used to provide financing to such Parties enable them to access and utilise the resources without difficulty.

Developed country Parties also require finance to implement their own climate change adaptation and mitigation programs as they have also contributed to increased greenhouse gas emissions. Furthermore, when providing finance to developing country Parties, developed country Parties should be confident in their ability to effectively receive and utilise the resources. Transparency between developed and developing country Parties is also essential as this helps build trust between the Parties as well as external actors and can lead to the effective measurement, reporting and verification of climate finance activities and programs.

Summing up the divide between developing and developing country Parties, the World Resources Institute (WRI) acknowledges that “In developing countries, climate change investment needs are significant. Direct government funding is scarce. And the billions of dollars committed to be marshalled by industraliazed countries remain inadequate to the magnitude of the challenge of stabilizing a steep trajectory of greenhouse gases. Additional financial investment should be accompanied by rules, regulations, fiscal incentives and effective markets at international, national and sub-national levels to shift current and projected “business-as-usual” investments, and mobilize resources at the scale required.”

At the COP 23 negotiations these major issues, including how country Parties can raise and use additional finance to support the fight against climate change, will be discussed and debated. Equally important will be how Parties can design and implement measures to ensure these financial resources are maximised, used efficiently and responsibly and result in measurable positive environmental impacts.

 

[Cover Image: Flickr/ItzaFineDay]

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