A key issue under intense discussions here at the negotiations is the climate finance decisions made last year in Copenhagen. Under the provisions of the Copenhagen Accord, the non-binding agreement thrashed out at the last minute behind closed doors between the United States and China, developed countries agreed to mobilize $30 billion in “fast start financing” between 2010 and 2012 and $100 billion per year by 2020 to help the most vulnerable and least developed countries adapt to and mitigate the impacts of climate change.
This might seem like a done deal, but actually there are actually several key areas of contention that must be hammered out here and in Cancun when it comes to these sources of finance, not the least being that this decision is not actually binding. On the question of fast start finance, there is concern that developed countries are not following through on their commitments. Total commitments so far number about $28 billion, which is not bad when measured against the original commitment, but not nearly enough when it comes to diverting climate catastrophe. There is also concern that developed countries are not following through and actually disbursing all of the money that they have pledged. In order to introduce some transparency into the process, the government of the Netherlands created a website, www.faststartfinance.org, to track developed country commitments and disbursements. I was concerned to see that the United States’ fast start finance commitments are not yet listed on the website, but the US delegation assured me that the information is currently being finalized and will be submitted within the next month, before the Cancun talks.
The World Resources Institute has also published a report detailing developed country commitments based on information collected from a wide variety of sources, distilled here.
According to their report, the United States appropriated $1.304 billion in fiscal year 2010 and $1.725 billion in FY 2011, divided amongst clean energy, adaptation and sustainable landscapes. According to the report, the FY 2010 appropriations were more than triple that of the previous year, and the United States is also increasing investments in other international assistance programs that will “deliver significant climate co-benefits.” In this context, the US commitments are exciting in the unprecedented nature of their size, even though it’s also clear that the United States can and must do more.
In terms of long-term finance, things get a little trickier. It seems as though there is general agreement about the fact that there should be some kind of climate green fund established. The details of governance are the hazy part: some parties (namely the developed countries, who have a controlling stake in these institutions) would prefer a climate fund under the auspices of the World Bank or another international financial institution, while others would prefer that the fund be established under the auspices of the UNFCCC itself. Since the World Bank has a track record of investing in carbon-intensive projects like coal-powered plants, this distinction is actually more important than it sounds.
Another issue is of course who will cough up how much of this money. At this point in the discussion at the UNFCCC, eyes usually turn collectively to the United States. This is fair in some senses, because the United States is one of the most prosperous and highly developed countries in the world, and the main source of historical emissions. But many don’t realize that domestically, this is not simply an issue of forking over the cash. Our budget process, which I have been “privileged” to witness in Washington, DC, is far more complicated than one might expect. Frankly, the President or a special envoy on his behalf can promise anything that he wants in international negotiations, but it is the Congress that holds the purse strings and must approve this amount before it is actually disbursed. The President submits his own budget to the Congress about a year before it would take effect, at which point Congress wheels and deals, slashes some accounts and beefs up others, before it is finally passed. So it is not simply a matter of making a commitment at negotiations, but also convincing Congress, and their constituents, that these are worthy ways to spend taxpayer money. This is particularly difficult in the political climate right now, since as several politicians have pointed out, record numbers of unemployed Americans probably don’t feel as rich as outsiders think they are. And if you think of how that climate may intensify after this November’s elections, then it may get significantly more difficult to pass this kind of finance allocations through Congress in the future.
There are also several proposals floating around Congress to find an innovative source of climate finance, one that won’t place a greater burden on taxpayers. For example, Congressman Pete Stark (no relation, even though I do feel a special kinship with him based on our shared last name) has introduced H.R. 5783, the “Investing in Our Future Act,” which would place a 0.005% levy on international financial transactions from the United States, a bill that I am currently working on in my day job back at home. This bill is innovative in that it would only apply to transactions of $10,000 or more, so would only apply to financiers on Wall street and not casual travelers or Americans buying small stocks. Of course, the key with legislation like this is getting it passed, which is another matter entirely.
Fast start finance is an essential part of these negotiations, because it serves as a confidence building measure amongst parties. After the bitter division of the Copenhagen negotiations, especially the divide between developing and developed countries, countries need to signal one another that they are ready and willing to negotiate. Faithfully disbursing the fast start funds is a key signal from the developed countries that they are really back at the negotiation table. In the words of Ban Ki-moon, the Secretary General of the UN, “clear evidence is needed before Cancun that fast star funds have started to flow in 2010.”
I guess the point of all this is that in the UNFCCC negotiations, nothing is as simple as it appears. If you are wondering why negotiators must spend so much of every year flying from location to location and spending days on end in discussions, it has to do with the nitty-gritty of all of the details of the balanced package that we all hope will emerge in Cancun. Of course it also has to do with the complicated dance of Robert’s Rules of Order (thank you, Brits), which apparently requires everyone to thank their distinguished colleagues at every opportunity before ripping them to shreds. And it’s not just the United States that has this problem: after all, every country must bring home a set of agreements that will fly in their own domestic political climate. Hopefully the end of the negotiations in Cancun will see a set of decisions that everyone can agree. At least let’s keep our fingers crossed.
About the authorAlex Stark
Alex Stark joins the project from Washington DC, where she's focused on legislation addressing drivers of violent conflict around the world, including the effects of climate change. Tracking the US negotiators and getting the word out about action inside the UNFCCC combine her passions for activism, sustainable development, conflict prevention and US foreign policy.