COP18 daily: Greasing the wheels in Doha’s final hours – the essential role of finance
- 07 December 2012
COP18 in Doha, Qatar, runs from November 26 to December 7, 2012. As part of our involvement in COP18, Damian Ryan our Senior Policy Manager, is providing news and analysis, as well as live tweeting from Doha. Today Damian reports back from the penultimate day of the negotiations.
DOHA: Officials and ministers at COP18 in Doha have reached the sharp, pointy end of their negotiations as the clock ticks down to the official conclusion of the conference in less than 24 hours.
Today has seen a mixed bag of results. On the positive side, UN climate chief, Christiana Figueres was quietly pleased with the closure of the Kyoto Protocol negotiations. This, however, was more a triumph of a process rather than substance.
As expected officials passed on to their ministers a draft decision text that still contains a range of unresolved issues, including the carrying over of emissions allowances and access to the Protocol’s flexibility mechanisms.
Ministers now need to crack these political nuts in the remaining hours. At the same time, lawyers have begun the process of checking the draft text to ensure that it is fit for adoption as a formal legal amendment to the Protocol.
But the real battle remains in the parallel Convention track process on ‘Long-term Cooperative Action’, which is meant to be ‘terminated’ here in Doha.
Reporting this evening, the Chair told Parties that further streamlining of a number of texts was required before a final single document could be brought together for adoption.
Privately, negotiators have described some of these texts as a mess with Parties split not only on various options, but also specific language. Negotiations are likely to continue through the night.
Whether parties can make the breakthroughs they need by tomorrow, will depend to a large extent on the question of finance. It is no surprise that this is the essential lubricate needed for greasing the wheels of the overall process.
The key issue at stake is so-called mid-term financing between now and 2020.
Developing countries are seeking firm agreement on a new quantified tranche of funding to continue the $30 billion of ‘Fast Start Finance’ developed countries pledged to deliver in Copenhagen in 2009. They are worried that in the absence of a specific commitment, financing will dry up.
In contrast, developed countries are far less keen to be tied down to any numbers – a consequence of tight domestic budgets and the political difficulty of selling foreign aid to voters in austere times.
The UK, Germany, Denmark and Sweden, however, have come forward with new individual commitments in recent days. And others, such as the US, have confirmed that climate finance through existing aid programmes will continue uninterrupted.
But a collective commitment, beyond a broad political assurance that funding will still be delivered, remains elusive. With the G77 developing country group stating this evening that finance is of “utmost importance” to a deal clearly, something (or someone) has to give.
It really needn’t be this hard of course. Throughout this COP, private, public and international financial institutions have been presenting solutions on how to scale up climate finance. The basic message of these organizations has been that partnerships between public and private finance are the key to getting funding at the scale required.
The general prescription is that public finance needs to be used to crowd-in much larger quantities of private finance by de-risking low carbon investment in developing countries.
This can be done in a variety of ways, including through innovative financial instruments such as internationally subsidised feed-in-tariffs for renewable energy in developing countries.
Ensuring ‘investment-grade policy’ is in place at the domestic level is also essential to attracting finance at scale. Unfortunately, such proposals and ideas do not yet resonate across the negotiations, with developing countries focused on securing public rather than private finance. Part of this is no doubt due to strategic negotiating reasons, but misunderstanding and misconceptions of private sector finance also play a part.
With luck, the launch today of the UNFCCC’s ‘Innovative Finance’ programme under its Momentum for Change initiative will help to dispel many myths and demonstrate the huge role that private sector finance is already playing in driving a clean revolution.
Whatever happens in the remaining hours of this COP, the issue of climate finance is not about to disappear.
The challenge for ministers from all countries is to find that middle ground that successfully marries the de-risking and leveraging power of public finance to the scalability of private sector sources. And a messy divorce is in noone’s interest.
Photo credit: UNFCCC
Damian Ryan is writing news and analysis and live-tweeting throughout COP18, and providing a more in-depth post-COP Briefing after the events. Keep up to date on our website and by following him on Twitter during COP18.
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