Have Countries Delivered on Fast-Start Climate Finance?

As the reporting deadline for 2010 looms, developed countries will need to prove that they are honestly meeting their modest $30 billion commitment.

Today, WRI releases an updated summary of developed countries’ “fast start” climate finance pledges. These funds are intended to help developing countries reduce emissions and adapt to climate change from 2010-2012.

To date, 21 developed countries and the European Commission have publicly announced individual fast-start finance pledges totaling nearly USD 28 billion to meet the USD 30 billion commitment in the 2009 Copenhagen Accord.

In last year’s Cancun Agreements, developed countries reaffirmed their commitment and also agreed to provide greater transparency on the delivery of their pledges – in other words, information not just on what the pledge is, but on how the country plans on meeting it.

The timing of this information is crucial as developing countries await progress in this area before moving other pieces of the Cancun Agreements forward. For example, major developing countries – Brazil, China, India and South Africa – have explicitly linked progress in the Green Climate Funds discussions to the sizeable flows of fast start funds.

Developed countries are invited to voluntarily provide this information in annual reports to the UNFCCC Secretariat in May 2011, 2012, 2013. Unfortunately, the Cancun Agreements contain no specifics on what format the reports should follow.

With the May deadline looming, what do we already know about what developed countries are providing? Our updated summary presents the most up-to-date information available. The summary reveals that most developed countries are making tentative progress towards delivering their commitments. However, the information available is neither complete nor consistent, and developed countries should provide comprehensive and comparable information on the delivery of fast start finance in 2010 in the reports they submit this month.

The May Deadline

Some news reports have suggested that developed countries have “missed” the May deadline for reporting. This is based on the May 1 deadline specified by the secretariat. However, since the Cancun Agreements do not actually specify a particular date in May, countries are not obliged to provide information by May 1, and could reasonably be expected to submit their information by the end of May.

WRI is aware of several countries that are working on preparing these reports and we expect to see submissions fairly soon. It is important that they all meet the May deadline in the Cancun Agreement, and submit comprehensive and comparable reports and be completely transparent about underlying assumptions behind the numbers. The summary of pledges we are releasing today provides the most up-to-date information available, and will be updated once all country reports are formally submitted.

Changes in Pledges

While there have been no significant changes to the overall pledges, further details are emerging on how the pledged resources are being mobilized and allocated. There have been some concerns over the impact of Japan’s aid cuts and U.S. budget cuts on their respective fast start commitments. These events may have an impact on 2011 and 2012 allocations of these countries, but there have been no formal announcements by either country since these events.

The United States, in particular, has never made specific numerical commitments as part of their overall fast start pledge for the period 2010-12, always maintaining that it will contribute its “fair share.” The ambiguity in the overall pledge makes it hard to assess changes resulting from the budget cuts. Moreover, the budget documents do not allow us to accurately estimate the total fast start finance available for 2011. However, it is quite likely to be lower than the USD 1.9 billion that the administration had requested for FY2011 in early 2010 from the previous Congress, and some unofficial estimates indicate that it will be under USD 1 billion.

Did Countries Meet their 2010 Pledges?

Since many countries have not yet made public the resources that they have actually delivered for 2010, it is not possible to provide an accurate overall estimate. However, the updated summary does contain information on actions taken by the executive bodies of some countries. The amount requested and/or budgeted by these bodies totals roughly USD 12 billion.

Some countries have reported more specific information. For example, in November 2010, Germany indicated that it would disburse 356 million Euros in 2010, while the UK indicated that it had approved GBP 568 million for specific programs in 2010-11. This means that Germany and the UK will still need to allocate 904 million Euros and GBP 932 million, respectively, in fast start funds by 2012 in order to meet their pledges.

Better Reporting Standards Going Forward

Since we started tracking fast start pledges over a year ago, voluntary reports by each developed country have been quite varied, making it very difficult to track and monitor progress against the pledges.

To ensure clarity, WRI recommends that countries include the following elements in their submissions: the scale of finance provided, the method for determining that the resources provided are indeed ‘new and additional’, the institutions through which they are channeling resources, the objectives, geographic distribution, whether the amount pledged has been allocated or delivered, and the types of financial instruments used.

The uncertainty in estimating the exact amount of funds clearly underscores the need for greater transparency and consistency in reporting. Yet what is more important is that the finance is actually delivered at the pace and scale needed to address the growing threat from climate change. We are yet to see this sense of urgency as developed countries continue to teeter in honoring even their modest commitments.