What does Effective Development Cooperation in Climate Finance look like?    

by Mia Grace Malit* and Josefina Villegas

In various arenas, environmental activists and advocates have opined that climate finance, if not climate action, must be anchored on principles of equity and common but differentiated responsibilities. But a bleak scenario has been steadily brewing for the past decade, with developed nations that should be at the forefront of providing climate aid and reparations leaving much to be desired in their commitments and pledges, as translated into their biennial reports and Nationally Determined Contributions (NDCs).[1]

These days, voluntary, “nationally appropriated” contributions have become the new norm in climate aid delivery. The situation calls for heightened efforts to ensure that climate finance is first and foremost, effective, participatory and is attuned to the needs of Southern developing countries. These countries have been for so long paying the price for climate breakdown and the ensuing catastrophes — something that they have least contributed to themselves.

How do we guarantee that the promise of climate finance made continually by the world’s historic emitters year after year goes beyond mere lip service and endows lasting impact, especially at the country level?

In line with its advocacy to universalise Effective Development Cooperation (EDC), CPDE aims to bring the urgency of the climate emergency and its grave impacts on communities at the centre of development discourse. It argues that climate finance must be informed by the four development effectiveness principles: financing climate actions for the Sustainable Development Goals (SDGs) must uphold democratic ownership, transparency and accountability, inclusive partnerships for development, and focus on country-determined results.

Current discussions and actions in the climate finance arena reveal multiple gaps in the application of these principles. These, in turn, hinder climate action towards reducing current GHG emissions and rising global temperature.

The call for effectiveness within climate finance presents an opportunity for all climate stakeholders. For civil society in particular, effectiveness will help develop the mechanism into one that includes and empower communities at the national, regional, and sectoral levels.

The proposal for an EDC-centred climate finance infrastructure and mechanism entails the following principles:

 

Country ownership that is both inclusive and democratic

Meeting the needs of the most vulnerable and marginalised does not end at allocating direct, adequate resources as quickly as possible. To be inclusive or effective, climate aid must gurantee developing countries set their own national development priorities. To meet that end, participation of country stakeholders and CSOs must also go beyond episodic consultation conducted by governments.

Enhancing inclusion and meaningful participation of CSOs in development planning and UNFCCC processes is part and parcel of making climate finance more accessible to the grassroots communities that ultimately bear the brunt of the climate crisis. This includes development partners and other relevant actors aligning their support to country systems and communities and territorial priorities, on top of acknowledging the traditional knowledge and skill sets held by people on the ground. . Within climate resources and investment leverage and negotiations, proposing false “zero emissions” and “net zero” approaches which are really fossil-fueled or fossil-dependent is known to be the most widespread and common practice. Fossil fuel projects are also still being approved[2], funded, and initiated, despite the latest IPCC report urgent recommendations.

 

Enhanced transparency and accountability at the country level

With too few mutual accountability mechanisms existing at the country level, we are risking a present and near future where developed countries’ accountability to NDCs remains increasingly weak, apart from it being voluntary. Moreover, this results in climate aid that is nowhere near being truly additional to ODA.

A meaningful country-level accountability mechanism is established when countries and their development partners build country-level processes that go beyond being consultative. Said processes must be accompanied by capacity development measures that aim to aid country stakeholders in using data to strengthen accountability.

Transparency in climate finance will then be achieved when deliberate steps are taken to ensure that all related information towards tracking development progress is publicly available for concerned citizens and country-level CSOs’ access.[3] This entails disaggregating existing and future data in tracking the reporting of ODA allotted to climate finance as well as rightfully addressing the yawning gap between grants and loans in the effective delivery of climate finance — putting(prioritising?)  people’s interests over profit.

 

Enabling environment for inclusive partnerships

Establishing an open civic space upholds inclusive partnerships as a core principle in achieving development cooperation. An open civic space is one which is free from harassment and human rights violations, and ensures sustained civic engagement and meaningful participation at the subnational level.

An enabling environment acknowledges what civil society can bring to the table, recognising that a whole-of-society approach is essential and influential in fostering human rights, inclusive decision-making, and transformative change in climate response.

All development actors must then step up in creating the legal and political regulations which enable the necessary space t for CSOs, allowing for o truly promoting climate finance partnerships with donors, community-based organisations, and local governments that focus on empowerment, decision-making, and capacity development. Hand in hand with this is ensuring climate finance will/shall never be weaponized at the expense not only of human rights and environmental defenders’ rights[4] but also of people and their communities, biodiversity, ecosystems and the environment.

 

Focus on country-determined results

While country-led frameworks are the foundation of inclusive development, a robust monitoring and evaluation system is equally crucial in assessing whether investments are reaping long-term benefits for recipient countries.

Results should lead to climate resilience. Climate finance will therefore be effective when the impacts of development objectives and outcomes are examined based on whether they fulfil “country-owned” strategies and priorities. This includes applying, regularly monitoring, and assessing adherence to the development effectiveness principles in the administration of climate finance, especially those furnished by bilateral donors, international financing institutions (IFIs), and multilateral development banks (MDBs).

Development cooperation can be achieved and further upheld by ensuring climate finance allocated in mitigation and adaptation projects produces long lasting transformative results. This also aligns with the global South’s call for an increase in adaptation resources, urgently upscaling the use of grants over loans to revert indebtedness trends linked to climate finance resource allocation, as well as incorporating the need for specific loss and damage climate finance.

As tactics posing as sustainable solutions threaten to jeopardise the essence of climate response/commitments and the communities in dire need of it, civil society must call for equity and justice to truly reflect how aid and reparations should be implemented in the just transition towards a sustainable future for all diverse forms of life in our planet. #

* Mia Grace Malit was an intern of CPDE

[1] Parties’ current NDCs are not on track in meeting the Paris Agreement’s goals, with identified problems ranging from a lack of adequate finance and capacity to insufficient political commitment and pandemic-related economic downturn.

[2] For instance, seven new oil and gas projects funded by the United Kingdom, United States, and Exxon Mobil among others have sprung left and right in Latin America, Africa, and the North Sea.

[3] 40% of the countries surveyed by CPDE in 2019 shared that access to required information at the national level was seen to be non-existent or very poor, with very few country-level CSOs accessing or using data from the OECD DAC or the IATI.

[4] The Escazú Agreement (Acuerdo de Escazú), entered into force in 2021, plays a significant role as the first regional treaty to regulate the legal protection of environmental and human rights defenders in Latin America and the Caribbean.

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