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Climate ‘fiscal cliff’ looms for developing countries if leaders come to Doha with no new money: Oxfam

Climate ‘fiscal cliff’ looms for developing countries if leaders come to Doha with no new money: Oxfam

November 25, 2012

25 November  2012 – After another year of extreme weather, developing countries face a looming climate ‘fiscal cliff’ at the end of 2012 with no clarity about how they will be supported to reduce emissions and adapt to the devastating impacts of climate change, international aid agency Oxfam said today ahead of the UN Climate Change negotiations in Doha, Qatar.

At the 2009 Copenhagen talks, developed countries committed to raise $100 billion per year by 2020 of climate finance and made a down payment of $30 billion for 2010 – 2012, called ‘Fast Start Finance.’ At the 2011 Cancun talks the Green Climate Fund was established to channel the $100 billion commitment. In just over a month, the Fast Start Finance period will end and the Green Climate Fund remains empty.

“Canada made good on its fair share of the Fast Start financing pledge, spending most of it on loans to private companies to adopt energy-saving technologies, with the final tranche still to be programmed,” said Mark Fried of Oxfam Canada. “Only ten percent of Canada’s support has gone to help poor communities adapt  to the dramatic changes in climate they face. We hope Canada will spend the final tranche of Fast Start monies on adaptation, and make a significant commitment to additional finance beyond this year.”

The government of Canada pledged $1.2 billion over three years for Fast Start, disbursing all but $183 million so far. No plans beyond this fiscal year have been announced.

Oxfam today publishes new research on developed nations’ Fast Start Finance pledges. Despite an agreement in Copenhagen that climate finance would be ‘new and additional’, Oxfam estimates that only 33 per cent of Fast Start Finance can be considered new. The remainder of the money was pledged before the Copenhagen conference – and at most only 24 per cent was additional to existing aid promises.

Just 43 per cent of known Fast Start Finance has been given as grants; most of it was in loans that developing countries have to repay at varying levels of interest. Only 21 per cent of known funds have been earmarked to support adaptation programs to help communities become more resilient to the effects of climate change.

Tim Gore, Oxfam International climate change policy advisor, said funding shortfalls, extreme weather and the end to Fast Start should force political leaders to work with urgency and ambition to increase climate finance in Doha.

“Developing countries are heading towards a climate ‘fiscal cliff’ without any certainty about how they will be supported to adapt to climate change after 2012 draws to a close,” Gore said.

“There is a real danger that climate finance will be scaled down in 2013, at a time when it needs to be scaled-up.

This year’s UN Climate Change negotiations come hot on the heels of Superstorm Sandy in the US and after droughts in the U.S. and Russia caused world food prices to skyrocket, making it increasingly difficult for poor families in developing countries to put food on the table.

“Developed nations must  find new sources of funding outside aid budgets to honour their $100 billion commitment without diverting money from other anti-poverty priorities like health and education.

“Political leaders must genuinely consider propositions for new income streams, such as a scheme to reduce shipping emissions or new taxes on financial transactions in order to generate revenue for the Green Climate Fund.

“If leaders come to Doha with no new money, the Green Climate Fund risks being left as an empty shell for the third year in a row,” Gore said.

The Kyoto Protocol is also at a crossroads with its first commitment period finishing in 2012. Oxfam is also calling on leaders to adopt and finalise its second commitment period with rigorous rules and further measures to cut emissions.

Read Oxfam’s briefing The climate ‘fiscal cliff’: An evaluation of Fast Start Finance and lessons for the future.

For interviews or more information in Canada, please contact Juliet O’Neill Oxfam Canada media officer 613. 240 3047

Members of Oxfam’s delegation in Doha are available for interviews. Contact Oxfam International Economic Justice Media Lead Sunita Bose on +1 650 353 1936.

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