Flooding, Fires, and Climate Finance: This Week in International Climate Negotiations

The World Resources Institute recently released updated estimates of the “fast-start” climate mitigation and adaption commitments rich nations made to poor countries after the Copenhagen summit. The headline figures are pretty impressive: Developed nations have set aside an estimated $27.9 billion, a combined total that is only $2 billion shy of the amount they promised between now and 2012. Environmental think tank WRI was quick to note that “while this represents a significant step in the right direction, developed countries still have much to do in meeting their Copenhagen fast-start pledge.” With unprecedented costs of combating climate-related disasters in Pakistan and Russia, one must ask, is this pledge a big enough step?

Fast-start money matters

First a bit of background: The fast-start pledge was only intended to help fund poorer, more vulnerable countries’ climate efforts from now through 2012, when the Kyoto Protocol is due to expire. The negotiators who cobbled together the non-binding Copenhagen Accord at the eleventh hour of the last big climate summit hoped to have a successor treaty with larger, binding climate finance figures in place before then. The Accord established a goal of ramping up mitigation and adaption funding to $100 billion by 2020.

Unfortunately, the diverging negotiating positions of rich and poor countries that have emerged since the Copenhagen summit make it less likely that a binding treaty will be agreed upon and ratified by 2012. This dreaded “Kyoto gap”–as the expected space between the end of the current greenhouse gas regulatory regime and whatever comes next is now being referred to–has developing countries clamoring for assurances that rich nations are still committed to cooperatively addressing the threat of climate change.

One simple way for the developed world to reaffirm its resolve is by meeting the existing fast-start pledge made in Copenhagen. The importance of this point was made explicit before the Bonn climate talks by the environmental ministers of Brazil, South Africa, India, and China–an influential collection of emerging economies that have coalesced into the “BASIC” negotiating block. In a joint press release, the BASIC ministers warned that “fast-start finance will be the key for an effective result in the climate change negotiations in Cancun.”

Tallying the pledges

Although the Bonn talks failed to establish firmer climate finance figures, WRI’s estimates suggest that the developed world has still made progress in fulfilling the commitment it made in Copenhagen. In March 2010, WRI found that developed countries had only allocated some $23.2 billion. The fast-start financing picture has improved considerably since then. By mid-August, rich countries had collectively exceeded their 2010 pledge by a quarter of a billion dollars and were less than that amount away from reaching the $10 billion promised in 2011. The biggest shortfall is in 2012 but–given that some major countries like the US have not yet begun budget negotiations for that year–that nearly $3 billion gap seems less daunting.

The analysis accompanying WRI’s new figures warns of two likely sticking points: additionality and delivery. In other words, are countries’ fast-start promises additional to existing development aid and will they actually pony up the cash? On both points, there are reasons for developing countries–and anyone holding out hopes that rich and poor countries can agree on a Kyoto successor treaty–to be wary.

Neither the Copenhagen summit nor the Bonn talks succeeded in establishing what exactly “additionality” means. “As a result,” WRI notes, “countries have proposed a variety of methods for defining the additionality of their fast-start finance.” With literally billions of dollars in immediate question, this is a huge stumbling block that could continue to drag down the progress of ongoing climate negotiations.

Another worry for international negotiators is whether or not these funds will every make it to the vulnerable developing countries that need them. “Though the commitments are clear, their delivery is uncertain,” WRI warns. Like the US aid in 2012, WRI points out that “some of the funds have yet to go through national budget appropriations processes.” (How effectively the funds are spent when they make it there is more of a concern for the international institutions disbursing the aid, the national politicians trying to get their hands on it, and the citizens whose futures depend on it.)

Problematic precedents

Further complicating the fast-start finance picture are the recent bills racked up by Pakistan and Russia in disasters that many are attributing to climate change. Pakistan’s High Commissioner to Britain told Reuters rebuilding his country may cost “more than $10 to $15 billion” over five years, while the cost of wildfires to Russia’s economy has been estimated in the $15 billion range. These disasters have made painfully clear that $10 billion a year spread across the entire developing world will not go very far to address the very real cost living with a changing climate.

Poor country negotiators pointed out the inadequacy of the fast-start figures at the Bonn talks. This enraged developed nation’s who thought they’d settled on agreeable climate finance figures in Copenhagen. The US negotiator Jonathan Pershing complained that some countries were asking for “staggering sums out of line with reality.” He and other developed nation negotiators are likely downplaying the bridge funding the fast-start dollars represent and focusing on drafting a new treaty that will codify the hundreds of billions promised annually beginning in 2020.

What Pershing was referring to at Bonn was not scientific or economic reality, but rather the increasingly bleak political reality of the international climate negotiations. The success developed nations have had in reaching their fast-start commitments in spite of the fraught domestic and international politics of climate change is a rare glimmer of hope. Whether it will be overshadowed by lingering, legitimate concerns about the additionality, delivery, or adequacy of the aid remains to be seen.