Transparent systems for accounting and tracking climate finance flows are fundamental to the success of the Paris Agreement. ECO notes how some naughty players are including some types projects where the relevancy to climate is, at best, questionable. Some are also relying heavily on reporting non-concessional finance that adds on new debt for developing countries, making their support look bigger. This does not fit with the spirit of Articles 4.3 and 4.4 of the Agreement.
ECO would like to remind Parties of paragraph 57 of Decision 1/CP.21, which calls for the elaboration of “modalities for the accounting of financial resources”. Fulfilment of this mandate can help overcome tensions about what counts and what doesn’t, alongside what kind of financial support has been delivered. ECO sees five fundamental elements of an accounting system:
1) We need to get agreement on what counts. Projects that promote the continued use of coal or non-conventional fossil fuels, such as shale gas, will only undermine credibility and must be excluded. Certain types of financial flows, such as export credits and market-rate loans, cannot be counted as assistance because they do not follow the meaning of Articles 4.3 and 4.4. To better understand the net value of support provided, all financial instruments should be accounted for in grant equivalent terms. The terms “new and additional” should have an internationally agreed definition, too.
2) Information needs to be provided at the project level, and should report on not only the promised money, but also the actual disbursement amount. Otherwise, how can we check the claims of “delivering on promises”?
3) Agreement is needed on what information needs to be supplied for each project (from the description to funding volume or “geo-referencing”, so that we can map projects by location). The information should be up-to-date, complete, and of the highest quality.
4) Information on project plans and outcomes needs to be collected from a variety of perspectives: contributor nations, recipient governments, implementing agencies, as well as community and watchdog groups.
5) Transparent evaluation systems need to be developed so that we can all learn from experience.
The Agreement invited “other parties” to provide information about financial contributions. To facilitate this, Annex I countries must be able to show they are following good practices, including a sound set of accounting modalities that can provide a helpful template for others. ECO notes that some of those “other Parties”, such as Colombia, are already accounting and tracking their financial contributions.
With no time to spare, Parties should agree here to the work programme and its timetable. This should include a call for submissions from Parties in early 2017, followed by a zero order draft at SB46 in mid-2017, before it gets debated and revised at subsequent SB and COP sessions, until CMA1 finally adopts it.