The Paris Agreement on Climate Change and the UN SDGs reinforce the commitment made by developed countries to ensure the needs of developing countries to mitigate climate risks. Towards achieving SDG13 on climate action, especially in climate finance, Goal 16 is fundamental for effective, accountable, and transparent institutions, pertaining to climate finance at all levels.
Particularly, SDG target 13a emphasizes implementing the commitment undertaken by developed country parties to mobilize funds to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation, especially from the Green Climate Fund.
Under the Copenhagen Accord, developed countries have pledged “new” and “additional” $100 billion annually by 2025, to cope with adverse effects of climate change, especially in developing countries. The volume of climate finance is likely to increase for the use of developing countries.
Increased transparency, accountability, and integrity are pre-requisites to ensure effectiveness in the implementation of adaptation and mitigation actions to fight climate change. The vulnerable and affected countries deserve their just and equitable share of the climate finance. Also, the UN SDGs and the Sendai Framework on disaster risk reduction embed the Paris Agreement to implement the commitment undertaken by developed countries as soon as possible.
Yet developed countries hardly mention finance in their plans, and unmet financial expectations limit climate action in developing countries and undermine NDCs -- the key instrument to implement the Paris Agreement.
Consequently, there is increasing concern over the absence of concrete and time-bound commitments from the developed nations and scanty flow of grant-based public funds. While developing countries’ need is estimated to be $3.5 trillion by 2030 to curb the climate change impacts, altogether only $18 billion will be made available from public sources of developed countries by 2020.
Though attempts have been made to fill the gap created by the US withdrawing from the Paris deal, as per last report of UNFCCC, major carbon emitters such as China, Brazil, France, and Germany have failed to mobilize resources within the agreed timeline for payments.
Countries are expected to contribute according to a UN formula, based on relative wealth and development status, and the US should provide 21% of the core budget as CF. Within the backdrop, the executive secretary of UNFCCC has emphasized: “It is essential that the response of the international community also accelerates and is scaled up, so that countries can green their economies and build resilience to the inevitable impacts of climate change.”
The emission/pollution tax, eg aviation tax, should be imposed by developing countries to mobilize the grant-based climate finance for their sustainable development. Unfortunately, this has not yet been practiced properly, and in the absence of such tools, developed countries are dumping their coals into developing countries, ultimately damaging their ecology and environment, without taking emission liabilities.
Article 13 of the Paris Agreement has included a Transparency Framework emphasized to promote transparency, accuracy, completeness, consistency, and comparability of both demand and supply sides. However, the Adaptation Finance Transparency Gap Report 2016 by Adaptationwatch has identified that “Overall findings suggest that countries are not being adequately transparent in their reporting of climate finance, and at the very least are failing to meet UNFCCC guidelines in their reporting process.”
In the absence of an agreed definition of climate finance, considering the “polluter’s pay principle,” the earlier agreed “new” and “additional” to ODA has gradually been disappearing from the climate finance landscape.
The powerful multilateral development banks, some UN agencies, and experts are promoting loans for climate adaptation in vulnerable countries, in the name of private sector financing. That would ultimately deprive the legitimate rights of the vulnerable people and will lead towards a climate-debt burden.
It is also important to note that developing countries are already using their revenue for climate change adaptation, and individual donation, CSR, zakaat etc could play vital roles to protect recurring loss and damages.
On the other hand, countries that are adversely affected by global climate change also happen to be widely affected by governance deficit and corruption. The Global Climate Risk Index 2018 identified that Honduras, Haiti, Myanmar, Nicaragua, Philippines, Bangladesh, Pakistan, Vietnam, Thailand, and Dominican Republic are among the most vulnerable countries (between 1997 and 2016) in terms of climate change respectively.
However, according to Transparency International’s Corruption Perception Index 2016, Honduras ranked 123; Haiti 159; Myanmar 136; Nicaragua 145; Philippines 101; Bangladesh 145; Pakistan 116; Vietnam 113; Thailand 101, and Dominican Republic ranked 120. The Environmental Performance Index 2018 has revealed that “Good governance emerges as the critical factor required for balancing between distinct dimensions of sustainability, which are environmental health -- which rises with economic growth and prosperity -- and ecosystem vitality -- which comes under strain from industrialization and urbanization.”
Several vulnerable countries including Bangladesh are slow in meeting stringent fiduciary, environmental, and other standards for the direct access from the GCF. That’s why, in case of climate funds, the vulnerable countries should utilize scientific evidence of climate vulnerability, adaptation plans, projections of environmental, ecological and other impacts, and review innovative solutions and practices, prioritizing community-led adaptation.
To ensure the proper delivery of climate funds, strictly following the top-down approach is required for effective coordination among policy-makers and implementers. Subsequently, the level of people’s awareness is still not up to the mark, neither is the capacity of project implementers. Information regarding delivering climate finance should be well-accessible, and government and other agencies’ auditing capacity should be up to the standard. Even the adaptation fund needs to be utilized properly, by strengthening the project monitoring system and engaging communities at all levels of project implementation.
The Transparency Framework under the Paris agreement should follow the “whole-of-governance” approach in climate finance as well as finance for loss and damages. There is no one-size-fits-all approach in meeting SDGs, as industrialized, emerging, and developing, or least developed countries are facing different challenges and opportunities.
Climate finance could be a vehicle to meet SDG targets, but overall greening of the economy will depend on governance status, social equity or inclusion, resource endowments, particular environmental pressures, intensity of human capital investment, employment generation, and well-designed tax/transfer redistribution policies.
M Zakir Hossain Khan is a climate finance governance analyst, TIB.