$100b annual climate change fund hits barrier

Plans for a multi-billion dollar fund to help developing countries deal with climate change hit a big barrier this week when countries could not agree on the design of the fund, a press release from the International Institute for Environment and Development (IIED), has announced.

The inability to reach a consensus happened on Tuesday, October 18, 2011 at a meeting of an international committee tasked with designing the fund in time for governments to approve the design at next month’s UN Climate Change Conference in Durban, South Africa.

This was a follow up on a decision by 194 nations last year, to create the “Green Climate Fund” to channel up to US$100 billion a year by 2020 to developing countries and parties to the convention also set up the fund’s Transitional Committee to design how the fund would operate.

It was at the sixteenth Conference of Parties (COP16) to the UN Framework Convention on Climate Change in Cancun in December 2010, that the developed countries agreed to set a new Green Climate Fund (GCF) to channel up to US$100 billion a year starting from 2020.

However, the final decision on the design hit a snag, when the developing countries warned that control of the fund by the donor nations – and the burden of bureaucracy that it entails, would limit their ability to make good use of it.

The Least Developed Countries made up of 48 of the poorest nations in Africa and Asia that are particularly vulnerable to climate change – were represented on the committee by Bangladesh and Zambia, whose negotiators have called from the outset for a radically new approach.

They argued that national climate-change trust funds in developing nations should be able to access the Green Climate Fund directly, rather than going through a third party such as the World Bank – which entails long delays and excessive paperwork.

“Direct access would empower the recipients of support to take their destiny into their own hands, without having to have their plans and projects approved by external entities,” advanced Dr. Saleemul Huq of the International Institute for Environment and Development (IIED), which has provided technical support to the Least Developed Countries for several years.

For his part, Pa Ousman Jarju, chair of the Least Developed Countries negotiating block at the UN climate change talks said: “Direct access would allow more devolved decision-making to reflect local and national concerns and it would enable countries to integrate the funding into their national plans and strategies for dealing with climate change.”

He argued that “Without direct access, poor countries will struggle to adapt to climate change, as they would face immense delays to access the funding and would not have the freedom to decide how and when to spend the money.”

Although after six months of tense negotiations, the Least Developed Countries seemed to have succeeded in their demand for provisions for direct access to be included in the final text, the United States and Saudi Arabia withdrew their support for the overall design, supported by all other countries because of concerns about other aspects of the text in the committee’s final meeting held on 18 October,.

Trevor Manuel, former finance minister of South Africa, who co-chaired the meeting with Kjetil Lund of Norway, called the outcome “sub-optimal”.

Germany for her part, expressed frustration and disappointment, and said that the committee’s failure to agree a design “will likely result in not having the Green Climate Fund this year or the next”.

By Edmund Smith-Asante

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