The Africa Progress Panel says world leaders must honour pledge to provide additional annual $100 billion in climate finance by 2020

Wednesday 30 June 2010, Basel, Switzerland – The Africa Progress Panel will today launch a new report arguing that additional public financing is required for achieving the Millennium Development Goals, climate-change adaptation and mitigation of greenhouse-gas emissions in Africa. 

The report entitled “Finance for climate-resilient development in Africa – An agenda for action following the Copenhagen conference”, being launched today at the Africa Energy Forum in Basel, Switzerland, sets out a ‘roadmap’ for action for developed and developing countries towards the United Nations Climate Change Conference COP 16 in Cancun in December.

The Africa Progress Panel highlights that whilst the Copenhagen Accord includes the commitment to provide an additional annual $100 billion in climate finance by 2020 the source of this funding remains unresolved. 

The report states that “the year 2010 should be when key elements of the Copenhagen Accord and negotiation texts are made operational. It would be naïve to presume that a binding international agreement can be reached without adequate financing for climate-resilient development.”

Arguing that “making the finance commitments real and bankable is the test that the international community must meet in coming months if the upcoming COP16 in Cancun is to succeed”, the report outlines the immediate responsibilities for developed and developing countries in enabling financing for climate-resilient development.  The APP calls for:

1. Members of the OECD Development Assistance Committee (including all EU members) to make the following commitments:
2. Immediate start-up finance: Developed countries’ credibility is at stake unless they deliver on the promised start-up funding of $10 billion per year starting this year.
3. Assessed contributions: Each country or group of countries, such as the EU, must quantify the share of the $100 billion that it will meet – perhaps with an interim target of mobilizing $50 billion by 2015.
4. Predictable mechanisms of public resource mobilization: Finance for climate-resilient development must be predictable over long periods, and so must come from clearly identified sources, such as taxes or levies on greenhouse-gas emissions.
5. Multilateral disbursement mechanisms: To keep transaction costs down and maximize the efficiency of climate finance, rich countries need to commit to using disbursement mechanisms such as the proposed Copenhagen Green Climate Fund.
6. Demonstrate and track additionality of resources: To gain the trust of developing countries, the agreed principle of “new and additional resources” must be put in to practice.  Climate financing specified in any agreement must be demonstrably new funding, additional to existing and promised aid flows.
7. Clear mechanisms for mobilizing private finance: Private finance for mitigation requires clear price signals and incentives set through policies including emissions-trading schemes in rich countries.

Advanced emerging economies, such as the BASIC countries (Brazil, South Africa, India, China) to make the following commitments:

1. Recognize the special needs of climate vulnerable countries: Wealthier emerging economies do not require substantial public external financing for development and adaptation. These countries should recognize the need of the climate-vulnerable countries for such financing, and rely instead on private investments and domestic public resources for their development, adaptation and mitigation needs.
2. Over time, provide financing to climate vulnerable countries: advanced developing countries should commit to contribute over time to multilateral mechanisms that support climate resilient development in the poorest countries.

African and other climate vulnerable countries to take the following steps to ensure full mutual accountability:

1. Identify priority programmes and make them bankable: This will be necessary to justify scaled-up financing, and the promised start-up funds can then flow as soon as incremental resources are available.
2. Ensure full accountability and transparency: Without full mutual accountability, the case for more resources will not be successful. Systems and processes for ensuring accountability and transparency need to be strengthened as necessary in developing countries.
3. Develop incentives for private-sector development: Many governments in Africa and elsewhere can advance climate-resilient development through actions that are entirely under their control, such as removing unnecessary barriers to trade and investment, and strengthening policy and regulatory frameworks.

The Africa Progress Panel asserts that taking some of these practical steps “will build trust and goodwill among countries and negotiators and, critically, permit the demonstration of real benefits on the ground. This route can take us towards a productive and successful COP16 in Mexico. Pushing aside the need to get real on financing will result in more recriminations and failure.”

Finally, the report also issues a strong call to African leaders to form a united front ahead of the December conference, warning that: “African countries have a vital interest in financing for development and climate change. It is therefore crucial that African-led processes develop to agree an effective common negotiation position in preparation for the Cancun meeting. Otherwise, African countries risk being pushed aside during the negotiations.”