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Lessons from the Montreal Protocol for Climate Finance

Alan Miller's picture

The recent talks in Tianjin, Washington DC and Addis Ababa show that there is serious thought being given to making good the promises on climate finance in Copenhagen (read related blog post by Andrew Steer).

 

I believe that the Montreal Protocol has some lessons to offer for tackling climate change: It is an international agreement that addresses stratospheric ozone depletion and is widely viewed as the most successful response to a global environmental problem to date. One common feature of the ozone and climate conventions is the provision of financial resources to help developing countries pay for the higher costs of measures with global environmental benefits. This topic is high on the agenda for the Cancun climate meeting in December, and is being specifically addressed by a high-level UN Advisory Group on Climate Finance that met last week in Addis Ababa.

 

Since the signing of the Copenhagen Accord last December, much attention has focused on the issue of resource mobilization and specifically how to generate the US$100 billion a year for climate finance promised by 2020. Numerous studies have also been published estimating total costs for developing country mitigation and adaptation requirements─they usually conclude that the needs are in the many billions of dollars.

 

The Montreal Protocol was adopted in 1987 and established a timetable for reductions in emissions of ozone depleting chemicals for both industrialized and developing countries, the latter on a delayed schedule. A key feature of the Protocol was the creation of a Fund to help developing countries phase out their use of ozone depleting substances (ODSs), a commitment first made in 1990. In the climate convention, negotiators often refer to two features of the governance of the Ozone Fund: its operation under the authority of parties to the treaty and the equality of voting power between donors and recipients. Less discussed is that financial commitments were agreed upon for three year periods based on an assessment of what recipient countries were prepared to do to reduce their use of ODSs. These short-term assessments guided the Ozone Fund, as opposed to more speculative, long-term estimates of total costs. 

 

There are several problems associated with long-term resource mobilization as being attempted for climate finance (see graph which shows the estimated annual climate funding required compared with current resources). The discussion is one-sided and all about money but without respect to how funds will be used. This is arguably destructive politically and as an environmental strategy. Donors are confronted with difficult requests for large sums without a clear commitment in return, and funds come to be viewed as a political entitlement rather than as a means to specific environmental ends.

 

In the short-term, the most critical needs may be for quick access to relatively small amounts for planning and capacity building. While there is a benefit to knowing larger sums will be available over time and thus allowing long-term planning, the Ozone Fund has shown that good faith and trust can be maintained consistent with a system of periodic assessments of needs and replenishments. Yet another key benefit is the allowance for learning from experience, which is particularly important in fields like adaptation to climate change which lack established good practice and cost guidelines. Climate finance could therefore also benefit by working with commitments of funds tied to a system of periodic review and replenishment.