Finally, the juicy discussion on long-term finance under COP agenda item 10a is getting off the ground. It’s not surprising that virtually every developed country that spoke yesterday celebrated their roadmap towards the $100-billion-a-year promise. And of course they highlighted their projection that public adaptation finance may double by 2020. Maybe developed countries even think they are off the hook when looking at those projections. Yet, with a closer look, a few additional things come to mind that may require COP action.
Let’s start with a key fact. Doubling adaptation finance by 2020 would mean only a fifth of the $100bn would be public finance for adaptation. While a welcome increase, a gross imbalance is still projected between mitigation and adaptation, and Parties may wish to address this in any COP22 decision on long-term finance. They could do so by urging developed countries to increase adaptation finance way beyond the roadmap’s projections. Quadrupling instead of doubling would be a fair start, in ECO’s view. After all, adaptation needs are set to soar dramatically in the near future, especially given the lack of ambition in countries’ NDCs.
ECO was delighted to hear Bangladesh questioning the inclusion of market-rate loans as climate finance. Right on! Commercial loans do not constitute assistance to cover the ‘incremental cost’ of action as referred to in Article 4.3 of the UNFCCC. That’s where grants and the grant equivalents of concessional loans come in. Logically, the grant equivalents of such loans, not their face-value, are a better measure for progress towards the UNFCCC obligations that developed countries have committed to under the Paris Agreement’s Article 9.
And here’s another one — we’ve noticed that not all developed countries have made pledges or announcements on how they intend to increase their individual levels of climate finance by 2020. In some cases, the 2020 announcements do not constitute an increase over current levels. ECO suggests developed countries may want to clarify that when they next take the floor on this agenda item, and a COP decision may be needed to urge them to do so.