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28th Jan 2023

EU criticised for 'inadequate' climate fund

  • Civil society groups worry that if the West does not stump enough cash for adaptation and mitigation, any global climate deal is off (Photo: Tom Jensen/norden.org)

The European Commission has proposed that the EU pay as little as €2 billion a year to fund third world carbon reduction measures and adaptation to unavoidable climate change.

Climate finance for the third world has become the main focus of discussion in the lead-up to the Copenhagen climate change summit in December. If the EU and US stump up significant chunks of cash for cutting emissions and climate adaptation, developing countries may in return commit to considerable CO2 reductions, even though it is the industrialised north that is responsible for most of the emissions that caused the problem.

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Last December at the UN climate talks in Bali, Indonesia, the EU committed to such monies, but it was only today for the first time that the EU executive has proposed any specific figures.

A communication from the EU executive published on Thursday (10 September), proposes that the bloc contribute some €2-15 billion a year by 2020, assuming an ambitious agreement is reached at the international climate negotiations in Copenhagen in December.

"With less than 90 days before Copenhagen we need to make serious progress in these negotiations," said European Commission President Jose Manuel Barroso. "That is why the commission is putting the first meaningful proposal on the table on how we might finance the battle against climate change."

"The sums involved are potentially significant, both ambitious and fair."

Environment commissioner Stavros Dimas also saluted the sums: "The European Union has led the way in committing to ambitious emission reductions and agreeing the measures to achieve them."

"Now we must break the impasse in the Copenhagen negotiations. That is why the commission is putting forward a balanced blueprint for financing."

By 2020 developing countries are likely to face annual costs in the 2013-2017 period of around €110 billion to mitigate their greenhouse gas emissions and adapt to the impacts of climate change, according to civil society. The commission for its part places a price tag on this of €100 billion.

The commission argues that international public financing for this from both developed countries and emerging economies such as China, India and Brazil should amount to some €22-50 billion a year beyond funds flowing from a future global carbon market - which Brussels thinks will add up to €38 billion a year - and the budgets of poor nations themselves.

Of this total amount, they believe the €2-15 billion represents Europe's fair share. The final scale of financing will depend on how ambitious any final Copenhagen agreement is. The more ambitious the overall carbon reduction plan, the more expensive it will be and thus the greater the funds that the EU will commit.

It is understood that some member states, notably France, Germany and Italy were opposed to including any figures at all in the communication, while Denmark, the Netherlands and the UK were strongly supportive of doing so.

Paris and Berlin feel that the EU has already done more than other industrialised nations in committing to binding carbon reduction targets and that it is time that the US, Japan and others step up to the plate. They also feel that, similar to classic trade negotiating tactics, a clear position should be held back until the last minute in order to squeeze as many concessions as possible from other parties.

But environmental groups and development NGOs, while welcoming what they describe as a "small step" and are happy that the EU moved first amongst industrialised powers to put at least some money on the table, worry that so a small amount could all but scupper any such agreement.

They believe that the EU needs to contribute a minimum of €40 billion a year.

Greenpeace described the proposed monies as "desperately inadequate" while WWF called aspects of the blueprint "financial jujitsu".

"The EU is trying to get away with leaving a tip, rather than paying its share of the bill to protect the planet's climate," said Greenpeace's EU climate campaigner, Joris den Blanken.

Development groups, for their part, are frightened that some of the money could come from existing aid budgets.

"Funds to help developing countries to tackle climate change must be additional to aid - not instead of it," said Elise Ford, head of Oxfam's EU office.

According to the commission proposal, climate financing for the third world "has met the agreed definition of overseas development assistance (ODA)." Indeed, Brussels says that grants and loans for development aid "the central role" in funding adaptation measures in the short term.

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