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26 NOV 2012

Climate ‘fiscal cliff’ looms for developing countries if leaders come to Doha with no new money – Oxfam

After another year of extreme weather, developing countries face a looming climate ‘fiscal cliff’ at the end of 2012 with no clarity about how they will be supported to reduce emissions and adapt to the devastating impacts of climate change, international aid agency Oxfam said today as the UN Climate Change negotiations begin in Doha, Qatar.
At the 2009 Copenhagen talks, developed countries committed to pay US$100 billion of climate finance per year by 2020 and made a down payment of US$30 billion for 2010 – 2012, called ‘Fast Start Finance.’ At the 2011 Cancun talks, the Green Climate Fund  was established to channel the US$100 billion commitment. In just over a month, the Fast Start Finance period will end and the Green Climate Fund remains empty.

Oxfam today publishes a new research on developed nations’ Fast Start Finance pledges. Despite an agreement in Copenhagen that climate finance would be ‘new and additional’, Oxfam estimates that only 33% of Fast Start Finance can be considered new – the remainder of the money was pledged before the Copenhagen conference – and at most only 24% was additional to existing aid promises.

According to Oxfam’s briefing “The looming climate ‘fiscal cliff’: An evaluation of Fast Start Finance and its lessons for the future”, just 43% of known Fast Start Finance has been given as grants; most of it was in loans that developing countries have to repay at varying levels of interest. Only 21% of known funds have been earmarked to support adaptation programmes to help communities become more resilient to the effects of climate change.
Oxfam International Climate Change Policy Advisor Tim Gore said these funding shortfalls, extreme weather and the end of the Fast Start Finance period in December should force political leaders to work with urgency and ambition to increase climate finance as they meet in Doha. 

“Developing countries are heading towards a climate ‘fiscal cliff’ without any certainty about how they will be supported to adapt to climate change after 2012 draws to a close. There is a real danger that climate finance will be scaled down in 2013, at a time when it needs to be scaled-up,” Gore said.

“This year’s UN Climate Change negotiations come hot on the heels of Superstorm Sandy in the US, a disaster made more severe as a result of climate change. 2012 also saw droughts in the US and Russia which caused world food prices to skyrocket, making it increasingly difficult for poor families in developing countries to put food on the table. 

“Developed nations must find new sources of funding outside aid budgets to honour their US$100 billion commitment without diverting money from other anti-poverty priorities like health and education.

“Political leaders must seriously consider propositions for new income streams, such as a scheme to reduce shipping emissions or new taxes on financial transactions in order to generate revenue for the Green Climate Fund. If leaders come to Doha with no new money, the Green Climate Fund risks being left as an empty shell for the third year in a row,” Gore said.

The Kyoto Protocol is also at a crossroads with its first commitment period finishing in 2012. Oxfam is calling on leaders to adopt and finalise its second commitment period with rigorous rules and further measures to cut emissions.

Note to editor:

A copy of Oxfam’s briefing “The looming climate ‘fiscal cliff’: An evaluation of Fast Start Finance and its lessons for the future” is available here .

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About Oxfam

Oxfam is dedicated to fighting poverty and inequity worldwide. The international and independent development and humanitarian organisation tackles poverty in four main ways: sustainable development in poor communities, disaster relief, local and global advocacy, and education with Hong Kong youth. Established in Hong Kong in 1976, Oxfam Hong Kong is a founding member of Oxfam, an international confederation that has assisted poor people in 94 countries. Oxfam Hong Kong alone has supported poor people in over 70 countries/regions.

For media enquiries, please contact:

Shirley Chan
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Telephone: +852 3120-5281
Email: shirley.chan@oxfam.org.hk