6th Dec 2022

Latest EU climate deal remains vague on funding

  • Europe is not being schizophrenic on climate financing, says Polish PM Tusk (Photo: Tom Jensen/norden.org)

Another European Union summit has come and gone, yielding only the vaguest of hints on how much cash the bloc is willing to stump up to help the developing world tackle the effects of climate change.

EU premiers and presidents meeting in Brussels on Friday (30 October) thrashed out a compromise deal in which the bloc has agreed that industrialised countries should commit between €22 billion and €50 billion a year for climate adaptation and carbon emissions mitigation in the third world.

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But, under pressure from Germany, what share of this global amount should come from Europe's public coffers - essentially Europe's offer ahead of UN climate talks in Copenhagen in December - remains unmentioned.

All that is said in the summit's final communique is that the EU will contribute it's "fair share" of this sum. A commission paper issued in September suggests that such a fair share would lie in a range between €2 and €15 billion a year, but there is no reference to this paper in the summit document.

The sums do not compare favourably with the amounts assessed as being necessary by development NGOs and third-world countries themselves: annual flows of €110 billion a year from the global north to south, of which the EU should be offering €35 billion.

Eastern member states under the leadership of Poland also won a major victory in securing a commitment that any climate cash they have to put in to the international kitty will take into account their ability to pay.

Poland and other poorer member states had held up movement on climate finance over their worries that if their share of EU climate funds for the third world was based on their carbon emission levels, they would be stuck with a huge bill, as they are very much dependent on coal for their energy and continue to pump out lots of carbon dioxide. Meanwhile, a much wealthier France, with its low-carbon nuclear energy sector, would not have to spend very much at all.

'No schizophrenia here'

The main reason the western states had wanted an EU calculus based on country emissions instead of wealth, is because an internal wealth-based model would expose it to similar claims from developing countries at a global level.

This would undermine their position, and that of the US, that even developing countries must contribute to the global climate fund and that the basis of paying into such a fund should be heavily weighted towards levels of carbon emissions.

Polish leader Donald Tusk, content with his victory, tried to allay such concerns by saying that what mattered was the EU climate finance commitment as a whole and what happened internally in Europe was not the business of other global powers.

"There is no schizophrenia here," he said, referring to the potential for others at global talks to accuse the EU of double standards.

"We're not interested in how various Chinese provinces or US states are going to achieve their climate goals," he told reporters after the summit. "It's the EU as a whole that is important and what we are doing is at the forefront of that fight. I don't see any conflict between the two positions."

Under the final compromise, the leaders gave the nod to an "internal adjustment mechanism" that will be established after Copenhagen, which "fully takes into account the ability to pay." A working party will be set up to thrash out the details of this mechanism, details that must then be agreed by consensus by EU leaders - giving Poland and the other eight eastern states a potential veto if it is not to their liking.

Fast track funding and hot air

Separately, the EU agreed that between €5 and €7 billion a year in so-called Fast Track financing - monies that would cover the gap in climate adaptation needs in the third world between now and the start of a post-Kyoto Protocol regime in 2013 - should be paid out "following an ambitious agreement in Copenhagen."

But again, the EU's share of this sum was left unsaid, although environment commissioner Stavros Dimas ahead of the summit said that a "good" figure would amount to around €1.5 billion a year. In another significant concession to eastern states, contribution to fast-track projects will only be on a voluntary basis.

A third stumbling block was overcome when EU leaders assented to a compromise over the question of so-called unused Assigned Amount Units of carbon emissions - the allocations of CO2 that countries could emit under the outgoing Kyoto Protocol.

Countries in the east underwent severe deindustrialisation over the course of the 1990s in the wake of the collapse of the Soviet bloc, producing a sharp drop in emissions without any real carbon mitigation efforts and leaving them with a massive surplus of unused AAUs.

The eastern states believe that these unused AAUs - referred to colloquially in Brussels as "hot air" - should be bankable and carry over from the Kyoto regime to whatever replaces it. The western states for their part argue that the unused AAUs exist in such quantities that to release them into the market would collapse the price of carbon and feel that the unused AAUs should just expire when any post-Kyoto regime enters into force.

Last minute fudge

In a last-minute fudge, the leaders struck a bargain in which AAUs should indeed be done away with, but only if everyone around the world agrees to this, so that eastern EU states do not have to dump their extra AAUs while Ukraine and Russia do not.

Green and development NGOs welcomed the fact there was at least some movement on climate financing, but lamented that what figures were mentioned were inadequate and that the EU remained mute on its own commitments.

Jules Kortenhorst, CEO of the European Climate Foundation said:"EU leaders have recognised the critical importance of fast start funding for the developing world but Europe, along with the United States, will need to come to Copenhagen with real money on the table if the process is to succeed."

Faith-based development groups APRODEV, Caritas and CIDSE, said: "The devil is in the detail, and the reality is that the EU is still evading its responsibilities."

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