Climate finance: You asked, the EU listened

In the run up to the international climate change talks in Cancun last year, you took action to demand more information for the world’s poorest. You called on UK Chancellor George Osborne to push the EU to open up about the money pledged to help poor countries cope with climate change.

You asked four simple questions.

EU Climate Change Finance

EU Climate Change Finance

  • Where will the money come from for climate finance?
  • What will it be spent on?
  • Will the money be in the form of grants or loans?
  • Who will be responsible for spending the money?”

So how did they do?

Thanks to your efforts, the EU opened up with a new annual report, the ‘Fast Start Finance Report’. During the Cancun talks, they published the first of these reports, which gave extra details about the €2.2 billion the EU mobilised to combat climate change throughout 2010. This forms part of the €7.2 billion they pledged they would give (in the years up to 2012) during the Copenhagen talks. They also released more detailed information from individual EU member states on spending by country and on specific climate projects. The level of detail was a huge improvement on previous reports but questions still remain.

Where the money will come from

The €7.2 billion was promised to be ‘new and additional’ but as the EU did not report on where the money was coming and whether it was coming out of existing aid budgets, developing countries have serious fears that climate finance is being recycled from money already allocated for development.

The UK itself has been transparent that climate finance is being taken from overseas aid budgets, but justifies this by saying that the aid budget is increasing. However, the agreed level of UK aid was set in 1970, when there was little recognition or understanding of climate change. Climate change is a new issue and an added burden to countries already trying to address poverty and therefore should not come out of existing budgets.

What the money will be spent on

The report released important information on what projects the money will be spent on. However, the vast majority of climate finance to date is being spent on mitigation (reducing emissions), with only a third going to helping poor people adapt to the effects of climate change. Whilst bringing down reductions is crucial, we need to ensure an equal amount of money is dedicated to helping address the needs of the poorest and most vulnerable.

How the money will be given

The report also included information about the source of the finance. According to the EU, over half the money given this year was awarded as loans or other forms of finance, rather than grants. It is unfair to expect poor countries to accumulate new debts to deal with a problem that they did not cause.

Who will be responsible for spending the money?

The annex to the report provided oversight into who will govern the fast start finance. This is positive as it shows who to hold to account. However, most of the UK money is going through multilateral funds such as the World Bank where developing countries remain unrepresented. For long term finance, leaders agreed to set up a Climate Fund that is under the authority of the UN and has equal representation from the world’s regions. We’ll be keeping a close eye on this positive first step.

Maintaining the momentum

Thank you to everyone who took action calling on the EU to open up. Now we have the crucial questions answered, we can begin to lobby our government to ensure the promised money reaches the poorest and most vulnerable to climate change. We’ll keep you posted on ways you can act in the run up to the climate change talks in South Africa later this year.

4 thoughts on “Climate finance: You asked, the EU listened

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