‘Rich countries mess with climate finance for developing countries’

Countries are making a mess of climate funding intended for developing countries. There is no good transparent reporting and there is poor control. It is also not always clear whether funded climate projects achieve the desired results. This is evident from various reports and is confirmed by experts at Nieuwsuur. Cause: lack of definitions and accounting rules.

Rich countries promised in 2009 that they would support developing countries with $100 billion annually so that they too can adapt to changing climate and more extreme weather. Part of this is for adaptation, that is, for example, making dikes and dams or strengthening houses and villages.

How much money has been raised so far? โ€œThe simple answer is that we don‘t know,โ€ says researcher on climate finance at the University of Brussels, Romain Weikmans. Last month, he wrote a letter to the authoritative science magazine Nature calling: โ€œCountries: define what counts as climate financing.โ€

Bitter pill

We have to go back to 2015 for this funding, when all the countries promised to do their part in the Paris Climate Agreement to limit global warming to 2, but even better, to one and a half degrees Celsius. This can only be done if all countries reduce their greenhouse gases to zero within 30 years.

Especially for developing countries, this was a bitter pill. They said that rich countries have burned coal, oil and gas for 150 years and have historically caused global warming.

In addition, the climate problem is once more doubly placed on the board of poor countries, because they are even more vulnerable to the effects of climate change. Faster than many climate experts had anticipated, countries are already struggling with the consequences: floods, drought and heat.

Disparities

Countries apply different rules and methods for climate finance. โ€œAnd they are therefore not comparable. It is completely unclear which countries are leading in climate finance and which countries are lagging behind,โ€ says researcher Weikmans.

โ€œ What there are big disagreements about is whether loans can be counted,โ€ says Pieter Pauw, affiliated with the Frankfurt School of Finance and Management. โ€œDeveloping countries say: we have to pay that back, so that can’t count?โ€

Both experts co-wrote the UN report Adaptation Gap 2020, which annually charts how people are adapting to climate change worldwide. The report literally says: ‘At the moment it is impossible to answer the question whether EUR 100 billion has actually been mobilised’.

There are now some 40 new adaptation projects in progress. 80 projects are at an advanced stage of approval. Since 2006, almost 400 adaptation projects have been financed in developing countries. In recent years, the amounts allocated to projects have increased.

A year after typhoon Yolanda hits the Philippines, Japan reports $470 million in climate adaptation. But that turns out to be a loan, according to research by development work organisation CARE that has been verified by Nieuwsuur.

Not much movement

Next week there will be (online) a so-called international adaptation top in Amsterdam. And despite the lack of clarity as to whether the annual 100 billion has been mobilised, it is expected that rich countries will be asked to pay even more money than the 100 billion annual. In the run-up to the summit, the Dutch-based Global Center on Adaptation argued for at least $300 billion a year.

The Centre writes: โ€œIt is essential that this funding is monitored so that it can be measured whether it actually reaches vulnerable communities.โ€ Weikmans: โ€œThere is no international consensus on the rules. This also leads to controversy during climate negotiations.โ€

Patrick Verkooijen, the director of the Global Center on Adaptation, acknowledged this week that it is not always clear whether pledged money is being used to adapt to climate change. โ€œIt is difficult to measure what counts as climate money and whether that money is used effectively. There is still work to be done in this area.โ€

Last year there was a disagreement again. At that time, the OECD estimated that developed countries had spent around $80 billion on climate funding in 2018. But NGO Oxfam Novib – who did it – did not reach 80 billion euros, but 22.5 billion euros in 2017-2018.

Efficiency concerns

There were more irregularities, saw Alex Michaelowa of the University of Zurich, who advises on climate policy. โ€œThey also saw projects that are not about climate financing, but have been reported as such. I hope ministries in theseveral countries that make the reporting are now really going to consider themselves.โ€

There

are also concerns about climate projects themselves. For example, a recent UN report on adaptation projects reads: ‘The lack of information on the final results of adaptation projects raises concerns about the effectiveness of these projects.

โ€œ As long as the definition of what counts as 100 billion is vague, they cannot be held responsible by developing countries if they do not reach that amount,โ€ says Pieter Pauw. โ€œIt is definitely an advantage for industrial countries if there is no clear accounting for climate finance.โ€