|
||
|
TWN
Info Service on Climate Change (Sept23/05) Kathmandu, 6 Sep (Prerna Bomzan): At the recently concluded third meeting of the UNFCCC’s Transitional Committee (TC) on loss and damage held on 29 Aug-1 Sep in the Dominican Republic, developing country members called for addressing the existing gaps in the global financial architecture on loss and damage relating to the scale, access, effectiveness and coherence. They also stressed the necessity for better coordination in respect of new funding arrangements, via their submission introduced at the closing of the TC meeting. The developing country submission states that “the purpose of the new funding arrangements is to mobilize significant new and additional, grant-based, concessional and non-debt financing for addressing loss and damage by strengthening country response; promoting a more coordinated approach to loss and damage response; and convening key stakeholders and serving as a platform for discussion and advocacy around strengthening loss and damage responses that complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement”. It also states that “in order to correctly establish, enhance and promote synergies within loss and damage funding arrangements, we foresee a structure of different levels of coordination: the Loss and Damage Fund leading the technical coordination space of the funding arrangements and a high level advisory and coordinating dialogue as the policy and orientation coordination space of the funding arrangements, and the COP (Conference of Parties to the UNFCCC) and CMA (Conference of Parties to the Paris Agreement) structures of guidance, support and accountability”. (The decisions adopted at the UNFCCC’s COP27/CMA4 last year in Sharm el-Sheikh, Egypt, reads, “Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement”) One of the key mandates of the TC is to make recommendations on defining the elements of the new funding arrangements and negotiations on this critical matter were fraught with divergent views along with other issues regarding the loss and damage fund. (See Update 1) While developed country members pushed for specific and concrete recommendations, elaborated in their submissions, on their identified “priority gaps” of so-called pre-arranged finance; recovery and reconstruction; human mobility; and humanitarian assistance, developing countries countered them by arguing that the priorities identified were top-down, not country-led and were also contentious on matters such as on pre-arranged finance, (such as insurance). (See exchanges below). Sources revealed that when the initial round of discussions on this issue took place in the closed sessions (for TC members only), developed countries basically pitched their respective submissions pushing for reinforcing “existing” financial arrangements strictly in the areas of pre-arranged finance (such as the Global Shield insurance initiative); recovery and reconstruction (expansionary role of the multilateral development banks [MDBs]); human mobility (such as the Migration Multi-Partner Trust Fund) and humanitarian assistance (UN agencies such as the OCHA [UN Office for the Coordination of Humanitarian Affairs], the Red Cross etc.); which they identified as “priority gaps” to be “strengthened” as part of the new funding arrangements. In response, it is learnt that developing countries unanimously voiced out that the existing system falls far short in terms of scale of funds, accessibility and delivery, predictability, coherence, transparency and overall coordination. Moreover, the much touted insurance as a recommendation could not be a solution and that new and additional, grant-based and non-debt financing should be the fundamental elements of the new funding arrangements, which would run contrary to the MDBs and their lending conditions if they are part of the new arrangements. They also raised issues of access and eligibility issues that would arise with those developing countries who are not part of the MDBs and existing exclusive initiatives such as the Global Shield (an initiative outside the UNFCCC process on social protection and insurance-based finance mechanism advanced by the G7 countries led by Germany). According to reliable sources, developing country members also made clear that the new funding arrangements must be consistent with the principles and provisions of the UNFCCC and its Paris Agreement, including equity, historical responsibility and common but differentiated responsibilities and respective capabilities (CBDR&RC). Besides ensuring the eligibility of all developing countries to financial resources as well as their predictability and accountability, these fundamental principles also have a huge bearing on “sources” of the new funding arrangements as a key element since the submissions of developed countries markedly present the shifting of their financial responsibilities to developing countries, said developing country members further. In this regard, France mentioned “high income/high emitting developing countries”, while Germany/Ireland mentioned “all countries with responsibilities for loss and damage and in a position to do so”. The United States (US) also had a “placeholder for text about contributions from Parties” and is said to be considering to urge countries “in a position to do so or ready to do so”. Discussions were eventually opened in the afternoon of 30 Aug with the TC Co-Chair Richard Sherman (South Africa) introducing the Co-Chairs’ informal note explaining that it’s a “highly unbalanced” text since they had yet to receive the developing countries’ submission and therefore, it was largely based on the submissions of developed country members, including views expressed during the closed session. (The other TC Co-Chair is Outi Honkatukia [Finland]). Avinash Persaud (Barbados) commented that there was not sufficient “country-led” aspect in the text. Citing his country’s extensive experience with “pre-arranged finance” and “debt-for-nature-swaps”, he criticised that they are “completely inadequate”, “not to scale” and cannot address loss and damage in a “sustainable way”, berating the insistence of developed country members on such solutions. Matheus Bastos (Brazil) agreed with Persaud on pre-arranged finance and pointed out that the fact that current funding arrangements are “not enough” is a fact acknowledged from the very first TC meeting, and that all existing institutions are “uncoordinated”. He also said that the “priority gaps” (selected by developed countries) were not identified by developing countries and that the Sharm el-Sheikh mandate is “not prescriptive”, and the task is to be informed by gaps related to “speed, eligibility, adequacy and access to finance”. He further emphasised that the new funding arrangements should have a linkage and be consistent with the provisions of the Convention and the Paris Agreement. Mikhai Robertson (Antigua and Barbuda) said that defining the elements of the funding arrangements is crucial and there is need for a “broad framing of selection criteria” echoing Bastos on “speed, eligibility, adequacy and access to finance. Yingzhi Liu (China) underlined that the principle of “CBDR&RC lies at the core” since it recognises various capacities and “historical responsibility” of nations, thus calling for the funding arrangements to ensure “equitable” burden-sharing”. He said both debt and climate finance are “complex and systematic” issues and that a “proper mandate” is required to manage debt-related matters. Therefore, there should be grants-based finance and non-debt instruments with no further burden on the fiscal space of affected developing countries, he said further, adding that developed countries should provide primary finance to help developing countries address loss and damage. Mohamed Nasr (Egypt), also representing the COP27 Presidency, provided a sequenced unpacking of what are the funding arrangements: first, establishing a mechanism to enhance the complementarity, coherence and transparency; that “new and additional” has to be one of the criteria to ensure not “repackaging” of resources plus the “scale” based on the “vision” by Parties and further on how to select other criteria like “non-debt” instruments when it comes to MDBs in the landscape. He underlined the significance of the fund to be the “substantial” player (“not only in millions”) and that it should have the “authority”, suggesting that the fund should be the main coordinator and should provide reports to the COP. He added that MDBs would not be changing their policies unless this comes strongly from the COP. Sonam Phuntsho Wangdi (Bhutan) said that the support to be provided under the funding arrangements must be according to the principles of the Convention and the Paris Agreement as well as under its authority. He said the work of the funding arrangements should be responsive to “country needs and circumstances” and that they should prioritise “grant-based and non-debt instruments including implementing debt deferment and debt cancellation clauses”. Khadeeja Naseem (Maldives) as a proponent for a “high-level council” for coordination elaborated that it would be a committee meeting few times a year with its members comprising heads of multilateral organisations and UN agencies including executive levels of representation of the World Bank and the International Monetary Fund. Adao Soares Barbosa (Timore Leste) echoed other speakers in saying that current mechanisms for humanitarian assistance are not enough and that is why there is a need to be guided by “paragraph 2” of the decisions (which established the new funding arrangements), emphasising that resources need to be “new and additional”. He said the fund itself is the core element for coordination and that the funding arrangements are to be complementary to the fund which is accountable to both the COP and the CMA. On the closing day on 1 September, when the developing countries’ submission on the funding arrangements was made available to the TC members, developed countries led by Jaime de Bourbon de Parme (Netherlands), Heike Henn (Germany), Christina Chan (US), David Higgins (Australia), Debbie Palmer (United Kingdom), and Jean-Christophe Donnellier (France), while acknowledging the need for coordination and complementarity, they however pushed for concrete and specific recommendations contained in the proposals of US, France, Germany/Ireland. Chan (US) specifically pointed to the US’ “bridging proposal” which contained detailed recommendations about “policy changes” on pre-arranged finance, humanitarian assistance, recovery and reconstruction, as well as human mobility. Robertson (Antigua and Barbuda), Naseem (Maldives), Persaud (Barbados), Bastos (Brazil), Daniel Lund (Fiji), Angela Rivera Galvis (Colombia), Barbosa (Timore Leste) all defended the developing countries’ submission that the spirit of the proposal was in good faith and to settle with a general agreement on the coordination mechanism recognising its importance, while not considering issues that not all constituency members would be comfortable to endorse. They also said that specific recommendations to other fora like the MDBs are not likely to have impact being outside of the UNFCCC process. The other issue which was also highlighted was that the recommendations were not country-led and were contentious, for instance, on the proposal on pre-arranged finance which has not worked and would involve further debt, as well as with premiums which is without budget for funding. TC Co-Chair Honkatukia (Finland) remarked that it is a missed opportunity that that members could not defend the outcome of the TC discussions as a “balanced” package. Co-Chair Sherman (South Africa) in closing said that a balance would be found for finding a way for recommendations that all Parties would be comfortable with. +
|
||
