Spotlight Cancún: Climate Financing is Not the Problem, it's the Solution

Aaron Leopold, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

If only one thing has been sure at the climate negotiations in Cancún this year, it is that money talks. The intense and constructive discussions on and off the negotiating floor on inter alia, the adaptation fund, a new green/climate fund, funding the avoidance of deforestation and forest degradation, the climate-related budgets of development banks, and the need for government assistance to more effectively bring private sector on board, will all be for naught if previous experience with development financing is any indication how climate funding promises pan out over the coming years.

Among funding nations’ top concerns at the moment is monitoring, reporting and verification (MRV) of the $100 billion per year by 2020 promised last year in Copenhagen to help alleviate the most catastrophic aspects of our global climate conundrum. MRV from the funders’ perspective should ensure climate financing is indeed used for adaptation and mitigation purposes and not squandered or sent to a Swiss bank. From the recipient side, it should ensure the norm of backpedaling on, and non-delivery of, financing promises is kept to a minimum.

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Spotlight Cancún: Climate Financing is Not the Problem, it’s the Solution

Aaron Leopold, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

If only one thing has been sure at the climate negotiations in Cancún this year, it is that money talks. The intense and constructive discussions on and off the negotiating floor on inter alia, the adaptation fund, a new green/climate fund, funding the avoidance of deforestation and forest degradation, the climate-related budgets of development banks, and the need for government assistance to more effectively bring private sector on board, will all be for naught if previous experience with development financing is any indication how climate funding promises pan out over the coming years.

Among funding nations’ top concerns at the moment is monitoring, reporting and verification (MRV) of the $100 billion per year by 2020 promised last year in Copenhagen to help alleviate the most catastrophic aspects of our global climate conundrum. MRV from the funders’ perspective should ensure climate financing is indeed used for adaptation and mitigation purposes and not squandered or sent to a Swiss bank. From the recipient side, it should ensure the norm of backpedaling on, and non-delivery of, financing promises is kept to a minimum.

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Spotlight Cancún: Diving into the risk-sharing pool? A game-based approach to communicate insurance for risk reduction

Pablo Suarez, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

Economic policy shapes most international negotiations, including those under United Nations Framework Convention on Climate Change (UNFCCC). However, negotiators often face serious obstacles to understand the full complexity of available policy instruments. A case in point is insurance schemes and climate change negotiations. Insurance schemes have the potential to support adaptation and climate risk management [read more]: Article 4.8 of the UNFCCC and Article 3.14 of the Kyoto Protocol require Parties to consider mechanisms, including insurance, to meet the specific needs and concerns of developing countries in adapting to climate change. Two proposals have been submitted to that effect. Yet progress has been relatively slow, in part due to difficulties in explaining the concepts in ways that engender both understanding and trust among climate negotiators.

Nonlinearities, feedbacks, “side effects” and trade-offs, inherent in risk financing, are not easy to grasp by non-expert audiences exposed only to text, presentations and other unidirectional approaches. How can we devise a communication platform that can successfully convey the complexity, possibilities and risks of complex policy instruments, in this case climate-related insurance systems?

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Spotlight Cancún: The Equitable Sharing of Atmospheric and Development Space

Martin Khor
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

Triple Crisis blogger Martin Khor published the following policy brief for the South Centre on why global temperature and emissions reductions targets must take both the environmental and developmental imperative into account.

The Equitable Sharing of Atmospheric and Development Space

In the quest for an international climate agreement on actions to address the climate change crisis, three aspects have to be the basis simultaneously: the environmental imperative, the developmental imperative, and the equity imperative. This EDE formula requires that the different pieces of the climate negotiations be seen and addressed as a whole, in a holistic way.  In particular, setting the global goal for emission reduction has to take account of the environmental imperative, and also deal with the emission reduction of Annex I and non Annex I parties.  A global carbon budget of how much more emissions should be allowed between now and 2050 should be fixed, and also how that budget should be allocated especially between developed and developing countries.

Thus a fixing of a temperature target and of a global emissions reduction goal must be done within a paradigm or framework for the equitable sharing of the atmospheric space and the development space.   The sharing of the mitigation efforts, and the support (finance and technology transfer) that must accompany this sharing, is a most critical piece of the jigsaw puzzle.

The UN Climate Convention recognises the equity principle; that developed countries take the lead in emission reduction, and that developing countries have development imperatives, and their ability to undertake climate actions depend on the extent of support they receive from the developed countries.  Annex I countries will also meet the agreed full incremental costs of implementing developing countries’ climate policy measures.

Read the full policy brief at the South Centre.

Spotlight Cancún: Financing Coastal Adaptation

Janot Mendler de Suarez, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

One of the themes of Oceans Day at Cancún was climate financing on the frontlines– the 183 coastal countries, including 44 SIDS, ­already battling the escalating costs of the global climate crisis.

How do the numbers stack up against the Copenhagen price tags for adaptation in developing countries? The ‘Fast-start’ up to $30 billion/year by 2012 followed by $100 billion/year by 2020 looks a lot like the $70-100 billion/year estimate from the 2010 Economics of Adaptation to Climate Change Adaptation (EACC) report from the World Bank and UN– the most comprehensive study to date.

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Spotlight Cancún: Kyoto Protocol Post Mortem

Kristen Sheeran, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

This week the world stands by as international negotiators in Cancun appear to be writing the post mortem for the Kyoto Protocol. It seems likely that an alternative track first proposed in Copenhagen – the Copenhagen Accord – will replace the top-down U.N. centered approach to climate change that has characterized international climate negotiations since the early 1990s. Many view the Copenhagen Accord as a major set-back to global efforts to stabilize the climate system. Others see it as a realistic alternative to the Kyoto framework which failed to induce the participation of the U.S., now the world’s second largest emitter, and exempted major emitters like China and India from reductions.

The Copenhagen Accord signifies a major shift in both the tenor and structure of international cooperation on climate change. Here are some of the major changes and potential consequences as I see them.

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Spotlight Cancún: Opening the Door for Agriculture at COP16

Nathan Russell, Guest Blogger
Another in a series from the Real Climate Economics Blog and Triple Crisis Blog on the Cancún Climate Summit, originally posted on the CGIAR blog.

The mutual dependence of climate security and food security was the clear message from Agriculture and Rural Development Day 2010, held on December 4 in parallel with the Sixteenth Conference of the Parties (COP16) to the United Nations Framework Convention on Climate Change (UNFCCC) taking place at Cancún, Mexico.

These words are only now starting to resonate with climate change negotiators. Hopefully, actions will speak louder than words. Just from the event’s plenary session, it was clear that many countries are already actively seeking ways to achieve the “triple win” of stronger food security, more rapid growth in agricultural productivity and enhanced carbon capture, while also making farming more resilient in the face of climate change.

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Spotlight Cancún: Economics Textbooks Get Climate Change Wrong

Kristen Sheeran, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

A useful new report by Yoram Bauman and the Sightline Institute reveals the deficiencies of many of the best selling economics textbooks in dealing with climate change, arguably one of the most important economic concerns of our time. The report finds that some of the most widely used textbooks present out-of-date accounts of climate science, minimize the economic urgency of the climate crisis, and provide superficial treatment of the real policy challenges inherent to solving the problem.

I wish I could say that I am surprised.

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Spotlight Cancún: So, Where is the Global Feed-in Tariff these days?

Alan AtKisson, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

The movement of ideas through the international system is a mysterious thing. Consider, for example, the circuitous journey of the “Global Feed-in Tariff”: this is the idea of guaranteeing the purchase of renewable energy by electricity utilities, supported by a subsidized price. What is happening with this potential global climate-game winner?

The feed-in tariff model (to simplify, “tariff” means “price support” in this case) has worked brilliantly to spread wind and solar energy in countries like Germany and Spain. Too brilliantly, worry some experts, who point to grid over-load risks. Other experts say that risk is remote. But in the rest of the world, “too much solar energy” is hardly the problem. Despite the amazing, astonishing spread of the stuff, and the steady drop in prices, wind and solar energy are still (says conventional wisdom) “too expensive” compared to “conventional” sources like coal and natural gas.

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Spotlight Cancún: Climate Economics and Policy Resources

Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

Frank Ackerman’s comprehensive book on climate economics: Can We Afford the Future: Economics of a Warming World
Frank Ackerman et al., “The Economics of 350”
James Boyce, “Cap and Dividend, A State By State Analysis”
Climate-L, a knowledge base of UN and intergovernmental activities addressing climate change policy
Earth Negotiations Bulletin
IATP series on Climate and Agriculture: Cancun 2010
ICTSD on trade and climate change
IFPRI on the impacts of climate change on agriculture
IISD Reporting services
Official UNFCCC website
Official Mexico’s COP16 website
Nalin Kulatilaka, “Green Revolution 2.0: A Sustainable Energy Path”
South Centre, “Addressing Climate Change through Sustainable Development and the Promotion of Human Rights”
The UN on Development and Climate Change
The World Bank on Development and Climate Change
UNCTAD’s World Investment Report 2010: Investing in a low-carbon economy