No hay tiempo que perder para hacer efectiva la financiación del clima

With a lack of a concrete, unified plan, as well as governments quickly watering down their responsibilities in jointly mobilising the long overdue USD 100 billion goal , we are nowhere near making finance flows consistent with much needed climate-resilient developmeThis attests to the glaring truth that inasmuch as climate finance has always been integral to negotiations, it has done far from enough for developing nations — with calls from grassroots and vulnerable communities visibly falling on deaf ears .

As climate financing is rife with issues at the country level — more importantly in aligning national development strategies — achieving a just transition amid a crucial tipping point in history requires tackling with depth and urgency the challenges in governing, delivering, and monitoring effective climate finance.

Los últimos meses nos han recordado una vez más que, efectivamente, estamos en una carrera contra el tiempo. Con el último informe del IPCC que revela cómo el mundo se dirige en todas las direcciones equivocadas posibles en su lucha de décadas contra el cambio climático, puede parecer que toda esperanza está perdida y que sólo nos queda esperar el inevitable final. Sin embargo, la mejor ciencia disponible dice lo contrario. Todavía hay esperanza, y no estaremos condenados a un futuro lleno de destrucción, si actuamos rápido.

Eso hace que los gobiernos y las empresas mundiales, principales responsables del actual colapso climático, tengan que tomar medidas drásticas y de gran calado durante los próximos tres años. Acciones que se aparten de la ruta de «seguir como siempre». Sin embargo, la creación de una vía de desarrollo hacia un futuro justo y resistente al cambio climático resulta ser una cuestión muy controvertida y también política.

Los planes actuales y las promesas voluntarias no tienen un impacto significativo en la limitación del calentamiento global a 1,5 grados centígrados. Y a pesar de sus compromisos a gran escala en Glasgow el año pasado, naciones desarrolladas como Estados Unidos y el Reino Unido están liderando el impulso de nuevas infraestructuras de combustibles fósiles. El aumento del gasto en armamento frustra la ayuda crucial para lograr no solo la acción climática y la resiliencia, sino también los objetivos de desarrollo sostenible (ODS).

La falta de un plan concreto y unificado, así como el hecho de que los gobiernos diluyan rápidamente sus responsabilidades a la hora de movilizar conjuntamente el objetivo de los 100.000 millones de dólares, que debería haberse alcanzado hace mucho tiempo, no permiten que los flujos de financiación sean coherentes con el tan necesario desarrollo resiliente al clima,[1]  lo que demuestra la evidente verdad de que, aunque la financiación del clima siempre ha formado parte de las negociaciones, no ha sido suficiente para los países en desarrollo, y las peticiones de las comunidades de base y vulnerables han caído visiblemente en saco roto.

Dado que la financiación del clima está plagada de problemas a nivel nacional -más aún en lo que se refiere a la alineación de las estrategias nacionales de desarrollo-, para lograr una transición justa en medio de un punto de inflexión crucial en la historia es necesario abordar con profundidad y urgencia los desafíos en la gobernanza, la entrega y el monitoreo de la financiación efectiva del clima.

 

No a la AOD como financiación climática

En la COP26 del año pasado se pidió a las Partes que aumentaran sus contribuciones en consonancia con el creciente impacto de la crisis climática en los países en desarrollo. Mientras se espera que las conversaciones en curso dominen la COP27 este mes de noviembre, apenas se discute a nivel político si la financiación climática nueva y adicional -la que se obtiene fuera de los flujos de ayuda oficial al desarrollo (AOD) existentes y además del 0,7% de la renta nacional bruta (RNB) de los países donantes- está obteniendo resultados significativos.

A pesar de la fuerte vinculación jurídica que hace hincapié en el reparto de la carga, es decir, en la responsabilidad de las naciones desarrolladas de asumir los costes de sus emisiones históricas, el quid estaría en los términos «nuevo» y «adicional», ya que nunca se han definido adecuadamente ni se han establecido sus parámetros. El Acuerdo de París de 2015 confundió aún más esta noción de estar por encima de la ayuda al desarrollo actual al definirla [nueva y adicional] como «una progresión más allá de los esfuerzos anteriores»[2].

En una situación confusa, los países donantes bilaterales tienen libertad para definir lo que es «nuevo y adicional» en sus respectivas contribuciones. Casi todos los países desarrollados han incluido y notificado la financiación para el clima en su AOD, estableciendo así sus propios puntos de referencia.[3]  Esta falta de claridad da lugar a la confusión y a una mayor canibalización de la AOD, frenando el crecimiento y el progreso de la financiación para el clima y comprometiendo al mismo tiempo la necesaria financiación para el desarrollo.

En consecuencia, se difunden más préstamos bajo la apariencia de ayuda climática a los países en desarrollo, en lugar de subvenciones directas y accesibles. Los donantes bilaterales no son ajenos a esta práctica. Los países principales, como Japón y Francia, han proporcionado un escaso 14% y 10% de su respectiva financiación climática en forma de subvenciones en 2016-2018, a pesar de contribuir más de lo que les corresponde. Lo mismo se ha observado en la financiación multilateral, ya que los préstamos no concesionales constituyen la mayor parte de la ayuda climática de los bancos multilaterales de desarrollo (BMD) en 2019, que asciende al 79%, es decir, 30 900 millones de dólares.

Financing for adaptation continues to lag behind

As major parts of Africa contend with an unprecedented drought that poses to leave over 20 million people in extreme hunger and starvation, and amid other highly damaging catastrophes, calls for the urgent ramping up of adaptation finance have been growing. But patterns of current allocations do not bode well.

In 2019 alone, USD 20 billion went to adaptation projects — a far cry from the USD 50.8 billion provided to mitigation. With annual adaptation costs expected to reach USD 140-300 billion in 2030 amid such a worrying level of financial support, actions made so far towards striking a balance between adaptation and mitigation ultimately fail to echo the language of the Paris Agreement. This is aggravated by a lack of understanding and unified mechanism on how adaptation efforts are to be interpreted in practice and reported subsequently.

Disclosing inflated margins in projects then becomes an open secret in development aid and practice, further overstating the amount donors spend on climate adaptation. Strikingly clear in World Bank’s endeavours, a report by CARE revealed that 86 per cent of the budget for the Earthquake Housing Reconstruction Project in Nepal was listed as adaptation finance regardless of the initiative being unrelated to climate change. Hand in hand with such over-reporting are the series of non-concessional loans and other non-grant instruments that only seek to cripple the already limited capacities of least developed countries (LDCs) and small island developing states (SIDS).

With development actors opting to resort to schemes that further displace debt-ridden nations[4] in a crisis that is the least of their doing, continued calls for enhanced global adaptation financing and private sector leveraging will only be — yet again — met in vain should this injustice remain unaddressed.

Ambiguous mechanisms for transparency make way for disparate results

Southern developing countries’ trust in the current processes is vastly eroded by discrepancies in climate finance reporting. Coupled with this is a certain flexibility brought about by the continued lack of a common monitoring and evaluation system. An internationally agreed definition of climate finance is also yet to be settled, allowing space for a wide range of interpretations. In spite of this, assessments made by the United Nations Framework Convention on Climate Change (UNFCCC) still mainly depend on what governments state in their national reports.

The Rio markers[5] set by the Organisation for Economic Co-operation and Development (OECD) is a prime example of how such accounting mechanisms impose risks in presenting exaggerated numbers that fail to accurately exhibit what has been provided and mobilised to the global South. Particularly, Japan’s OECD-based financial reporting method for projects that carry environmental themes has been found to be riddled with inconsistencies. Regardless of the extent to which each project truly addresses climate mitigation or adaptation as either a main or minor objective, no distinction is made as 100 per cent of the budget is reported as climate finance, mainly resulting in inflated figures.

This practice by Japan alone already contributes to the annual total for adaptation finance being 10 per cent lower than what developed-country donors disclosed to the OECD. Moreover, the UNFCCC has not signalled a compulsory reporting of net finance accounting for loan repayments, despite non-grant instruments’ dominant influence in the climate finance arena. As a reporting standard has yet to be unanimously agreed upon, results from calculation methods like these inevitably find their way into official reports — a complete antithesis of what effective climate finance should be:  transparent, accountable, and scaled up.

With the Standing Committee on Finance (SCF) gearing towards monitoring developed nations’ progress in fulfilling the USD 20 billion deficiency in their joint climate pledge ahead of the November summit in Sharm el-Sheikh, we ought to see another huge disconnect between what has been achieved in numbers and how it translates into action and actual implementation.

No time to spare

All these challenges make one thing clear: the path towards a just transition cannot be achieved without channelling effective climate finance.

These ambiguities and loopholes in the whole climate finance cycle serve as another stern reminder that world leaders and key development actors have done the bare minimum. If widespread injustices are not addressed and urgently called upon, we risk navigating a mechanism plagued by further irregularities that only serve the rich and the most powerful. Pledges and commitments that equate to nothing but a string of empty promises. If left as is, grassroots communities would, for the nth time, get the shorter end of the stick in a battle they are already losing.

It is only through integrating a financing infrastructure that takes into account the importance of development cooperation, human rights, and inclusive decision-making that we can ensure that climate aid and reparations become key drivers to peoples’ empowerment. One that is predictable, adequate, and additional. One that seeks to create an enabling, participatory environment for all sectors of society. One that is effective through and through.

Until climate action sets out to be truly inclusive and reflective of the global South’s crucial role in the climate change discourse, our steadfast call towards upholding effective climate finance through the development effectiveness principles shall persist. We will continue sounding the horn.

Indeed, there’s no time to spare.#

[1] Article 2.1c of the Paris Agreement puts emphasis on the need to make “finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”

[2] As per Article 9.3 of the Paris Agreement

[3] The OECD DAC’s criteria allows bilateral country providers to report climate finance as part of ODA if these are proven concessional, with a focus on people’s welfare and development..

[4] Despite a debt moratorium imposed amid the Covid crisis, at least 62 developing countries spent more on debt service than on healthcare in 2020 — according to Eurodad.

[5] The Rio markers for climate are commonly used by OECD DAC member countries as indicators for each spearheaded development activity and whether it targets climate objectives. Three scores are utilised: Marker 0 for projects carrying no climate objectives; Marker 1 for projects instilling one climate objective among several other ones; Marker 2 for projects with the climate as a principal objective. Countries employ different practices for Marker 1, whereas the full budget is reported for Marker 2. The finance share allocated is then reported to the UNFCCC.

Featured photo by Mika Baumeister on Unsplash

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