• Wednesday, Feb 19, 2020
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Enhancing global funding for the most vulnerable communities and countries

  • Published at 04:56 pm January 18th, 2020
ClimateTribune_January 2020_Global funding
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It has been estimated that less than 10% of the funds received by each country reaches the most vulnerable communities

The promises and delivery of funds from the developed countries to support developing countries tackle climate change, through both mitigation as well as adaptation, is always a highly contentious topic at every COP.

There are several issues involved in sorting what has been promised and then determining what is being delivered.

The first issue is how much has been promised. In theory, this is quite clear. It amounts to $100 billion each year starting from 2020 onwards with a promise that the amount will increase each year going forward. 

However, the problem arises when trying to identify the channels through which these funds are being delivered, as there are multiple mechanisms used by developed countries that they can choose.

From the developing countries' perspective the best and most obviously relevant channels are the different funds explicitly created for fulfilling this obligation, namely the Adaptation Fund (AF), the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF), and the most recently set up Green Climate Fund (GCF). 

Of these funds, the GCF is by far the biggest, and it was started with around $10 billion in its initial phase and is now trying to double that amount for its next phase. The GCF Board has also made an excellent decision to provide half of its funds only for mitigation and the other half for adaptation and to prioritize the most vulnerable countries.

However, in practice, it has had difficulty fulfilling the prioritization of supporting the most vulnerable communities in the most vulnerable developing countries and is working on improving its delivery.

When it comes to other delivery channels such as bilateral agencies such as DFID for the UK, GIZ for Germany, USAID for USA and others, there is a great deal of discrepancy between what the developed countries claim to be providing as climate change funding and what the developing countries claim to be receiving. This discrepancy arises from the tendency of the developed countries to double count their development assistance with climate assistance.

To give an example, the developed countries recently produced a compilation of their collective contribution, which came to a total of $62 billion over one year from all of them.

However, the Government of India collected information from the developing countries for that year asking each country how much funding for climate change they received and the total was less than $3 billion for all developing countries combined.

Hence, there is an order of magnitude difference between the claims of the developed countries and actual receipts in the developing countries.

The third channel of funding is through the multilateral development banks such as the World Bank, Asian Development Bank and others who also now provide climate change funding in addition to their traditional development funding. After some initial confusion about double-counting here, things have improved now so that climate change funds can now be tracked separately from development assistance funds.

The reason for tracking these two sets of funding separately is that while development assistance has a promise of reaching 0.7 % of GNI of each developed country, this is not an obligation and only a few countries have achieved this target. On the other hand, funding for climate change is an obligation under the United Nations Framework Convention on Climate Change (UNFCCC) and hence developing countries can ask for accountability from the fund providers.

One final issue is that even though a certain amount of funds are being delivered to the vulnerable developing countries to support adaptation action, these funds are not necessarily reaching the most vulnerable communities. It has been estimated that less than 10% of the funds received by each country reaches the most vulnerable communities. This failure is primarily of the national government of developing countries, as well as the suppliers of funds and both need to improve their delivery.

At the end of COP25, the issue of funding remained unresolved, as always, as no decision was reached on the transparency of tracking climate change funds from global to national and then from national to local levels.

Hopefully, this can be taken up again at COP26 in Glasgow this year.

Dr Saleemul Huq is the Director of the International Centre for Climate Change and Development