|
||
|
TWN Info Service
on Climate Change (Nov11/07) Geneva, 22 Nov (Meena Raman) - The United States is proposing the use of core public resources to substantially increase private investments in "green infrastructure" in tackling climate change in developing countries. The proposal is expected to draw much flak from developing countries at the upcoming climate talks in Durban who feel that the US has no political will to meet its legal commitments and is outsourcing its responsibilities to the private sector, while shifting its commitments to developing countries. In a recent submission by the US under the United Nations Framework Convention on Climate Change (UNFCCC) on long-term finance ahead of the negotiations of the Ad-hoc Working Group on Long-term Cooperative Action (AWG-LCA), the US is urging "Parties to take concerted action to identify and implement means to facilitate large-scale private investment into low-carbon, climate resilient infrastructure in developing countries," as it recognizes "that institutional investors such as pension funds, sovereign wealth funds, and insurers control trillions of dollars seeking long-term investment opportunities." While recognizing "the ongoing importance of scaled-up public finance, particularly for assisting the poorest and most vulnerable countries to adapt to the effects of climate change," the US submission states that "because private investment will continue to be the main driver of economic growth, the transition to a low-carbon, climate resilient economy cannot happen principally through public sector expenditure." "Success in tackling climate change depends on our ability to motivate pools of institutional capital to make ‘green' versus ‘brown' investments and to overcome private sector concerns about developing country risk," said the submission further. According to the US, "the challenge for governments, both developed and developing, is to use a strong core of public resources and combine it with targeted policies to substantially increase private investments in green infrastructure. This will be an inherently complex task that requires concerted action at the national and international level, through a range of actors including bilateral aid agencies, multilateral development banks, and private investors." Referring to the Copenhagen Accord and the decision reached in Cancun on a joint commitment by developed countries to the goal of mobilizing $100 billion annually by 2020 through a combination of private and public sources, both bilateral and multilateral, in the context of meaningful and transparent mitigation by developing countries, the US submission states that "there was no agreement to have the Conference of Parties determine, limit, or otherwise take decisions on sources, whether the relative contributions of public and private finance or otherwise. Rather, a fundamental backdrop to Copenhagen and Cancun was that each country is free to determine the mode and source of its climate finance contributions." The US proposal also states that "increased climate finance flows depend in part on domestic enabling environments" and urges "developing countries to promote transparency and good governance and improve regulatory and economic policies that reduce investment risks." In calling for developing countries to also contribute to climate financing, the submission also calls for the recognition of "the evolution over time in developing countries' needs and their ability to contribute to climate finance." Responding to the US submission, one senior negotiator from a developing country criticised the proposal as "outsourcing the obligations of developed countries to the private sector. "In response, developing countries could also say that their ‘mitigation actions can be outsourced to private companies'", said the diplomat in sarcasm. Another seasoned developing country negotiator said that the US submission "is totally contrary to climate change financing under the Convention which requires developed country Parties to provide resources to enable developing countries to meet their obligations to address climate change and its adverse effects." "This submission only shows that there is absolutely no political will to come up with any kind of long-term financing for climate change, not only for the US but also for most developed country Parties. They merely use the mirage of financing to get developing countries to shoulder the brunt of the responsibility for reduction of emissions and to provide for their own adaptation to adverse effects of climate change and therefore their own survival, using their own resources, or getting deeper into debt," lamented the negotiator further. "Developing countries would then have to take the necessary measures to render their economies fully open to private sector investment, through the creating of enabling environments, including the adoption of low-emission development strategies," said the negotiator further. Referring to the draft instrument for the Green Climate Fund (which will be considered in Durban by Parties for approval) that provides for a private sector facility to "directly and indirectly finance private sector mitigation and adaptation activities...", which was a proposal from developed countries including the US, "this means that the GCF will provide financing to the private sector to cover investment risks in developing countries." "Instead of making funding directly available to developing countries, on the basis of needs identified by developing countries themselves, through accredited national institutions of those countries, financing will be made available to the private sector to guarantee their loans, or cover their investment risks," and "this is unacceptable", said the negotiator.
|
||
