Adding climate finance to our promises


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Here is the sad truth: Presently, the resources available for developing countries to address the impacts of climate change cover 5% of estimated needs by 2020.

One of the challenges is to mobilize the resources needed without dipping into the same basket of current official development assistance (ODA). Another challenge is to measure and monitor what is 'new and additional' from the complex web of sources and channels.

More than a technical exercise, it is a useful tool to build trust and accountability with developing countries to show that assistance is being delivered in line with promises made. 

As part of its commitment laid out in the Strategic Framework on Development and Climate Change, the World Bank has teamed up with UN and OECD partners to help monitor financial flows to developing countries. Last week, the Bank held a lunch-time seminar to start discussing current monitoring practices and future options.

The range of financing instruments and sources makes it difficult to track funds and then to determine whether these funds would have come anyway as part of existing ODA commitments from developed countries. Not all new flows are truly additional. Additional climate funds in a strict sense would be those that exceed the previous 'non-climate' ODA commitments, including those set in Monterrey in 2002 (0.7% of GNI by 2015) and in Gleneagles in 2005 (increase total ODA by USD 50 billion by 2010 in real terms and double aid to Africa).

The Adaptation Fund that derives resources from a 2% levy on Clean Development Mechanism (CDM) transactions is new and additional. Carbon markets continue to be the largest source of mitigation-related flows to developing countries, with the CDM market at $6.6 billion commitment per year on average in 2006-08. 

In other cases,  climate-related finance  is delivered via  ODA channels, like most of the resources for the Global Environment Facility. Attempts are being made to monitor flows using so-called 'Rio markers', a scoring system used to determine if climate change in a funded project or program is a 'principle objective', a 'significant objective', or of  'no relevance'.  Experience has shown that when it comes to adaptation support (tracked with Rio markers since January 2010), it is particularly difficult to separate the strands of ODA and climate finance.

Since this is a qualitative assessment, it can at best point to climate finance trends and orders of magnitude. But the methodology could be improved. The use of Rio markers needs to be strengthened by promoting more consistent and comprehensive application across donor countries and ODA flows, and by evaluating their use so that they can be fine-tuned by 2015.  And while improving the monitoring and reporting system for financial flows, it is important to strive to ensure that developing countries are able to achieve their sustainable development objectives and outcomes despite more challenging conditions - an objective that is central to ODA and the World Bank mission.  

Read also: Monitoring and Reporting on Financial Flows Related to Climate Change


Kseniya Lvovsky

Former Climate Change Program Manager Climate Change Team, Environment Department

Join the Conversation

Per Kurowski
March 17, 2010

Being truly responsible with the poor nations on the issue of climate change is to always remind them that, at the end of the day, they will most likely be on their own since, as usual, promises of help, will most probably evaporate in the heat.

If you want to help, sell an insurance against promises unfulfilled by developing nations, and then let any ensuing derivatives trade openly.