UN chief: EU has ‘great interest’ in public climate funds

EXCLUSIVE / Europe will benefit as much as Africa, if it uses its public purse to fund climate mitigation and adaptation measures in the developing world, the UN Environment Programme’s executive director has told EURACTIV.

Achim Steiner was speaking shortly before a meeting of the inter-sessional committee of the UNFCCC in Bonn yesterday (10 June), at which developing countries reportedly demanded an initial tranche of $15 billion to be provided from richer governments, by November.

The next month, a UNFCCC summit will take place in Lima, ahead of a Paris conference in 2015 that aims to agree a comprehensive treaty.  The sources of funding for climate aid offered by the developed world will be central to its success.

“Europe has to acknowledge that it has a great interest in contributing to the public finance track that will enable participating developing nations and Least Developed Countries (LDCs) to make the transition towards a low carbon economy,” Steiner said.

He continued, “We need to ensure that a climate agreement in 2015 is cognisent of the fact that the EU has as much to gain as Africa from a significant public finance contribution – including ODA – being channeled into Africa’s renewable energy economy to avoid having another billion people locked into a 20th century fossil fuel-based energy economy.”

Steiner believes that the private sector’s contribution to climate mitigation efforts will outweigh publicly-funded efforts, but his intervention in the funding debate was still cheered by development groups.  

“I can only support the director’s words,” Jan Kowalzig, a climate change adviser to Oxfam told EURACTIV. “We have to recognise that the global phasing fossil fuels down to zero is necessary if we want to avoid climate catastrophe.”

“Europe would be well advised to help countries shift their development on to low carbon pathway and public finance has a role to play,” he added. “If the EU did that properly, then it would contribute to a common future that is very much in its interests.”

Green Climate Fund

The question of how to source climate finance has often pitted the developing world against richer nations, particularly over issues such as a proposed $100 billion-a-year Green Climate Fund that will help decarbonise emerging economies.

While developed countries have previously pushed for private investments to be counted towards its contributions – and influential figures called for the private sector to be given a seat at the negotiating table – developing countries expressed fears of profit-taking and tax dodges.   

Use of private funds for climate mitigation projects is less contentious than for adaptation measures, which involve issues such as food security and disaster preparedness, where financial returns may be too small to incentivise investments.

Last month, a deal was thrashed out at talks in South Korea to help poorer nations to reduce carbon emissions, with the lion’s share of monies coming from developed world governments.

But the details remain to be fully sketched, and some wealthier states with shaky finances are said to be biding their time before trying to reintroduce private sector capital contributions to the climate fund, a centrepiece of any future UNFCCC deal, through the backdoor.

It is unclear whether revenues for marginally cleaner coal stations or gas infrastructure may be counted towards climate finance under the new Green Climate Fund rules.

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