Isra-Mart srl: EU finance ministers confirm €7.2bn climate financing

www.isramart.com

EU finance ministers yesterday pledged €7.2bn in short-term funding to help developing countries tackle the effects of climate change, but were quickly accused by green campaigners of "re-labelling" development aid.

A statement outlining the conclusions of the latest meeting of finance ministers showed EU states had provided €4.68bn in 2010 and 2011 towards the $30bn "fast-start" climate fund agreed at the 2009 climate change summit in Copenhagen.

"Despite the severe economic downturn and strong fiscal constraints in Europe, we have mobilised €2.34bn also in 2011," said Connie Hedegaard, the EU's climate action commissioner, in an emailed statement.

"This figure shows Europe's clear commitment to support actions for reducing emissions and adapting to climate change in developing countries. And after the first year of funding, it's very encouraging to see tangible results in a number of developing countries."

But NGO's claimed that rather than meeting its climate finance commitments, the EU has simply diverted large amounts of existing development funds to climate projects.

"On first sight it looks like European governments have done well on meeting their commitments to help poor countries cope with immediate climate change impacts," said Lies Craeynest, Oxfam's EU climate change policy advisor. "But they have done this mainly by re-labelling development aid as climate finance."

The fast-start finance is intended to fill a funding gap before the proposed $100bn Green Climate Fund kicks in from 2020.

But developing countries are concerned the fund will be scaled back unless public money is used, as they do not feel the private sector can be relied upon to provide funds for aspects such as climate adaptation where there is little prospect of profit.

Oxfam and WWF have proposed a levy on shipping emissions or a tax on financial transactions would be better able to supply funds for adaptation and would be easier to regulate.

Craeynest said: "Major reports by Bill Gates, the World Bank and IMF stress that both a Financial Transaction Tax and a fair carbon price on shipping are technically feasible and would raise billions of fresh money to deal with the growing challenges of climate change in poor countries, whilst also tackling emissions from ships and sorting out the financial crisis."

However, Bloomberg New Energy Finance among others has claimed raising funds from private sources will be easier than from cash-strapped governments.

Climate funding is likely to be one of the key areas of negotiation at the upcoming UN climate summit in Durban with an influential working group scheduled to present a package of proposals on how to raise the promised $100bn a year of funding from 2020 onwards.

The latest statement from the EU came as the International Energy Agency released a major new report warning that with global greenhouse gas emissions rising to record levels the world only has a few years left to take action to avoid dangerous levels of climate change.