At the conclusion of the G7, leaders of the world’s richest countries said they “will continue our efforts to provide and mobilise increased finance, from public and private sources, and to demonstrate that we and others are well on our way to meet the US$100 billion goal”.
“Continuing efforts to provide and mobilise increased finance” is about maintaining current levels of finance, which the G7 leaders claim are “already flowing at higher levels”. So far so good, no backsliding. But where is the much-needed commitment to further increase finance beyond current levels?
We are nowhere near Chancellor Merkel’s commitment to double Germany’s climate finance contribution by 2020. Other rich countries should be following suit well ahead of Paris with clear quantified commitments to scale up public finance, especially for adaptation, while avoiding confusing language or accounting tricks. This is key to success in Paris.
Next the G7 claim that we are “well on our way to meet the $100bn goal” warrants a closer look.
OECD-DAC estimates that public climate finance flows were $37bn in 2013. There are two reasons why this number is too high.
First, it includes bilateral aid contributions where climate change is not just a “principal” but a “significant” objective. But we all know the truth — aid projects are being counted as climate finance even when there’s almost no relationship. If ECO just counted projects where climate change is the “principal” objective, then the number in 2013 goes down to $12.4bn.
Second, the OECD includes multilateral flows that are not even concessional in nature—concessional flows alone adds another $4.9bn. So the $37bn estimate is really only $17.3bn.
Other estimates are similarly overstated – for example, the Standing Committee on Finance estimate of at least $35bn annually going to climate finance.
If, as suggested here, current flows of public and concessional climate finance range from only $14-17bn per year, then a gap of over $80bn per year still has to be closed to meet the annual $100bn goal by 2020. ECO doubts that many developing countries would consider the delivery of one fifth of the target as being “well on our way”.
G7 leaders did note that they “stand ready to engage proactively in the negotiations of the finance provisions of the Paris outcome”. It would be good if that carried directly to their engagement on finance in Bonn this week. Negotiating provisions on post-2020 finance would be so much easier with a clear commitment from all G7 governments to bridge the $80bn gap by 2020. It’s time they took a leaf out of Chancellor Merkel’s book.