Twisted logic: no money for adaptation unless the rich can emit more, and profit from it.

by nathan thanki

The old axiom “adapt or die” is haunting the halls of the UNFCCC in Doha.

As has been made clear over the years of apathy and inaction, the industrialised world will do everything it can to avoid making serious emissions reductions. The resulting 0.8 degree celsius warming, and certainty of a further 0.8 degrees, mean that those who are particularly vulnerable are forced to adapt to the adverse impacts of climate change.

For most of humanity, living in the developing world, the response to the climate crisis represents an additional burden. The degree to which the countries of the South are able to cope with the crisis depends, and always will depend, on the provision of adequate financial resources. This is true of mitigation action as well as adaptation action: as the Philippines wryly noted “we would like to do mitigation action, but first we must stop drowning.” The failure to provide the adequate, predictable and additional resources marks a double tragedy: not only does it undermine global efforts to curb emissions, it also undermines the poverty alleviation and sustainable development priorities of the South. Failure on finance is tantamount to condemning much of the world to poverty and vulnerability, and future generations to a 4 degree warmer world. And that’s putting it politely.

Although there is an un-elaborated and meagre promise from the industrialised nations for $100b in climate finance by 2020, there is no reason to believe them. For one, the trust building “fast-start” $30b promised in Copenhagen and ever since used to sweeten the deal of increased emissions has been proven to be redirected aid money, usually in the form of loans, and usually for projects that the donor nations prioritized (read: creating “enabling” conditions for carbon markets). It has not been subject to agreed measuring, reporting, or verifying, and has largely been done bilaterally with no clear rules for eligibility and access. Basically, it was everything climate finance should not be. The rich countries at various presentations here in Doha gave another version, but they need to get their stories straight. They will say the $30b was a “one off” that shouldn’t be expected again while at the same time saying there is no need to worry about a lack of clarity on sources and measuring of long-term finance. They will then applaud themselves for, among other thing, [allowing developing countries to be the energy behind] establishing the institutional arrangement that is the Green Climate Fund (GCF).

Everyone is very excited about the GCF, and I suppose they should be. It took a long hard negotiation to arrive at it, and finally we have a counterbalance to the other “operating entity” of the UNFCCC’s financial mechanism, the Global Environment Facility (GEF), which developing countries have had many negative experiences with over the years. Matters pertaining to the GCF, and it’s relationship to the governing body of the UNFCCC (The COP) are also on the table here in Doha, but let’s leave them for another day, because we’re overlooking some simple facts. The Green Climate Fund is not yet operational, and in any case is empty.

Supposedly the GCF will allow for direct access of money for real on the ground projects – but there are also the usual concerns over the involvement of the private sector and the kind of preference for financing mitigation that meant since inception the GEF has given $3b to mitigation projects and only $300m for urgently needed adaptation.

One Fund that we do not have to wait around for any longer is the Adaptation Fund. Born of a decision in 2001, it took 8 years to become operational–telling you something about the political will of the powerful nations in assisting adaptation efforts. Yet it does exist, and has boots on the ground. It too allows direct access, provides money exclusively as grants (no loans which add to the vicious debt cycle) and is away from GEF control, even if the World Bank is the Trustee. Basically, it is a Fund considered extremely important by the developing world as it directly, and in a proper manner, addresses their adaptation needs.

But the Adaptation Fund is on life support. The report of the Board to this session shows that unless something urgent is done, it could cease to exist. There have been donations, but nowhere near enough; Fast Start finance oddly skipped the Adaptation Fund. Projects in the pipeline may now miss out on the funding expected.

Part of the solution, now part of the problem, is that the Fund is supported by carbon markets: 2% of sales of certified emissions reductions (CERs) under the clean development mechanism (CDM) of the Kyoto Protocol go into the Fund. The CDM is a “flexibility mechanism” of the Protocol – a way for Parties to avoid failing to meet their [un-ambitious] commitments by paying for projects in developing countries that reduce emissions (it’s very debatable if this is actually the case) which the Party can then use to offset their own emissions. In theory this would keep the Fund full. Reality, however, has a way of intervening and inconveniencing. The price floor has fallen out of the carbon market. Now lolling in the doldrums at a mere 80 cents per tonne, the low price of carbon in the CDM means that the mechanism is failing. The real crime is that we are seeing an [ultimately futile] effort to ensure its survival by taking the Adaptation Fund hostage. New Zealand and Australia have listened to developing country concerns, and in response, they have replied: the solution to this problem lies in our being able to access carbon markets. This orthodoxy is not limited to Parties: Halldor Thorgeirsson, the Director for Implementation Strategy at the UNFCCC secretariat told me via twitter “The Adaptation Fund depends on vibrant carbon markets since it get a share of the credits flowing from the CDM.” In one fell swoop, the provision of resources to adapt to climate change has been made solely dependent on market mechanisms, when in fact what is needed is a fulfillment of the legal obligations of the Convention by rich nations providing the funds.

It gets worse though. Here’s the killer: New Zealand, Australia, Japan and other rich nations want to be eligible for the CDM even if they are not undertaking a second commitment period of emissions reductions under the Kyoto Protocol. This is an affront. What they are saying is: there will be no money to adapt unless you let us emit more and benefit from it! It is a sick and perverse logic that cannot be allowed to prevail in Doha.

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