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01 DEC 2014

Climate finance action plan can set table for Paris deal, says Oxfam

All countries must use the COP 20 Summit in Lima to resolve the impasse over ‘climate finance,’ and make success possible at the critical Paris talks in December 2015, says international agency Oxfam.

In a new report, ‘Breaking the Standoff (Summary)’, Oxfam details how current pledges are out of step with the magnitude of need in developing countries and calls on world leaders to outline a robust new strategy to boost climate finance. Developed countries promised to mobilise US$100 billion per year in climate finance by 2020, but headway in mobilising that funding has been slow.

If progress is made on climate finance, the clean development that poor countries can achieve could be spectacular. Ethiopia could lift millions of people out of poverty while avoiding annual carbon emissions to the equivalent of 65 coal-fired plants. Peru could increase its GDP by nearly 1 per cent more than business as usual while halving its emissions at the same time. Indonesia could fulfil its plan to cut emissions by 41 per cent in 15 years.

However, the US$100 billion climate promise can only be the start. Sub-Saharan African countries alone, for example, will need $62 billion per year to invest in climate adaptation. An effective climate policy regime will also unlock hundreds of billions more in private investments and move the world onto a low-carbon path that keeps warming below 2°C.

 

A key reason for the gap between current climate investments and climate needs is that donor countries have managed to avoid accountability for their fair shares. Too few details have been agreed by negotiators about how financial flows will be mobilised, which countries will mobilize them and which countries will receive them. This has undermined developing countries’ ability to create effective plans for their adaptation and mitigation needs.

‘The US$100 billion promise is an iconic reference point in global climate negotiations. Countries have haggled over it for years. But for people on the front lines of the climate crisis, this abstract number has made little to no difference in their lives’, said Oxfam International Executive Director Winnie Byanyima.

‘The COP20 Summit in Lima will set the stage for success or failure in Paris. We need clear commitments of climate finance, focused on what developing countries actually need’, Byanyima said. ‘Vague promises won’t help people to adapt to the harmful effects of climate change, or help countries to pursue cleaner paths to growth and development’.

 

Oxfam’s report offers a blueprint for progress on climate finance in Lima, showing that it is possible to protect the world’s poorest people from the worst impacts of climate change, unlock significant economic growth, and slash emissions. The blueprint shows how a Paris agreement must:

1. Set out exactly how climate finance should be accessed and spent

2. Identify new sources of public and private finance

3. Establish a ‘fair shares’ framework to mobilise the necessary financial flows and direct them to the right places

Oxfam’s calculation of country ‘fair shares’ estimates that the US would be responsible for mobilising 56 per cent of financial flows to shift the world onto a low-carbon path during the first commitment period of the new agreement followed by 22 per cent from the EU and 10 per cent from Japan. When it comes to adaptation Oxfam identifies new countries that should become climate finance contributors including Russia, Brazil, the Republic of Korea and Mexico. Oxfam’s blueprint shows the level of specificity negotiators need to address in Lima and Paris to seal a deal.

 

Following this year from the Ban Ki Moon Climate Summit and the Green Climate Fund pledging conference, COP 20 is the most significant negotiation before the Paris talks. Recent political announcements, including a deal between China and the US on promised emissions cuts have offered new political momentum to the negotiations.

A large portion of climate finance is expected to be channelled through the Green Climate Fund. Its mandate is to support developing countries to reduce greenhouse gas emissions, preparing for the unavoidable impacts of climate change and growing in a sustainable way. Two weeks before COP 20, the fund reached the bare minimum level of initial capitalisation it needs to get off the ground with pledges totalling just under US$10 billion so far. Several countries are yet to pledge, including Australia and Austria, Ireland and Belgium.

‘Millions of people came together in New York and other cities around the world in September to demand action on climate change. They understand that action on climate means new green jobs, secure food supplies, and a future for all’, said Byanyima. ‘Now is the time for our leaders to step up and lead.

‘These talks are not the endpoint. They are milestones on a journey that will take decades. But the talks in Lima can – and must put us on the right track for Paris and beyond’.

///ENDS

Notes to editors

This table sets out Oxfam’s calculation of the fair shares of the global mitigation effort for 2020–25 (assumed to be the first commitment period of the new agreement). It estimates the percentage of international finance for mitigation that the country should be responsible for mobilising. For more details see ‘Breaking the Standoff (Summary).

Table 1: Indicative fair shares of mitigation effort and finance by 2025

* = new contributors

Country1 Fair share of emissions reductions finance (%) 
 United States 56%
 EU 28 22%
 Japan 10%
 Canada 3.1%
 Australia 2.9%
 Switzerland 1.4%
 Norway 1.4%
 *Brazil 0.87%
 *Singapore 0.72%
 *UAE 0.53%
 *Kuwait 0.27%
 *Israel 0.24%
 New Zealand 0.17%
 *Qatar 0.13%
 

NOTES

1. Countries whose indicative share of internationally supported emissions reductions is less than 0.1 per cent are not included in this list.

2. We have based the Responsibility and Capability Index on each country’s cumulative emissions since 1990, and the income accruing to its population living above a development threshold of $9,000 per annum and weighted progressively thereafter.

3. Brazil is included in the list, though we recognise that it is a marginal case. Further, that owing to a large potential for domestic mitigation, the inclusion of Brazil as a contributor to international mitigation finance may be debated. As stressed, this list is indicative only.


This table sets out Oxfam’s calculation of the fair shares of the global adaptation effort for 2020–25 (assumed to be the first commitment period of the new agreement). It estimates the percentage of international finance for adaptation that the country should be responsible for mobilising. The percentages are separated between the existing contributors and new contributors. For more details see ‘Breaking the Standoff’.

Table 2: Indicative fair shares of adaptation finance

Country1

Step 4:

Fair shares of adaptation finance (%)
USA53.05%
EU26.63%
Japan9.72%
Canada4.16%
Australia3.25%
Norway1.26%
Switzerland1.21%
New Zealand0.32%
New contributors
Russian Federation18.81%
Brazil18.44%
Republic of Korea11.44%
Mexico7.18%
Saudi Arabia6.32%
UAE5.68%
Qatar5.12%
Kuwait4.85%
Turkey4.12%
Singapore3.45%
Venezuela3.35%
Israel2.61%
Chile2.26%
Colombia1.76%
Malaysia1.62%
Iran1.22%
Oman0.95%
Libya0.81%

NOTES

1. Countries whose Responsibility and Capacity Index score adjusted for vulnerability is below 0.1 per cent are not included in this list.

2. We have based the Responsibility and Capability Index on each country’s cumulative emissions since 1990, and the income accruing to its population living above a development threshold of $9,000 per annum and weighted progressively thereafter.

3. The adjustment for vulnerability is performed using data from David Wheeler’s 2011 study ‘Quantifying Vulnerability to Climate Change: Implications for Adaptation Assistance’.