International climate finance

Climate Finance for Poor Countries

Climate finance to poor countries needs to be upscaled quickly. Photo: C.Krackhardt, Brot für die Welt

Every year, many poor and vulnerable countries around the world are having to cope against the ever increasing climate induced extreme events. Severe poverty, pre-existing economic and social problems and underdevelopment are already a harsh reality in many of these countries. Climate change impacts are only adding additional burden. Without the adequate financial support from the international community, groups of countries such as the Least Developed Countries (LDC) and Small Island Developing States (SIDS) will not be able to manage and adapt in the changing climatic conditions.

In the recently held twenty-first session of the Conference of Parties (COP) meeting in Paris under the United Nations Framework Convention on Climate Change (UNFCCC), climate finance was one of the major agendas. Lengthy discussions took place on how to support the poor and vulnerable countries in tackling climate change and achieve sustainable development. In the final outcome document called the ‘Paris Agreement’ climate finance only saw a moderate conclusion. Though, the developed countries have taken the responsibility of providing climate finance to developing countries no concrete numbers were mentioned in the agreement. It also clearly lacked any mid term targets or pathways in raising the finance ambition. The decision document, however, does provide some numbers and guidance but it is regarded less effective compared to that of the Agreement document. For the first time, rich developing countries have also taken some responsibility under the UNFCCC in supporting the other poor countries, though on a voluntary basis.

LDC that are categorised as the most vulnerable and least capacitate countries need special and particular focus when it come to climate finance. Addressing chronic poverty, providing health services, education, drinking water and basic infrastructure to their populations is a constant challenge due to resource constraint. Given their low capacity to cope with the extreme shocks and events, they require high consideration for support. The Paris Agreement that only comes to effect from 2020 does acknowledge this reality but the need is urgent and warrants immediate action.

Many promises, but failing to deliver

In the past, the international community have time and again promised to deliver adequate climate finance to the LDCs but this has not materialised fully in practice. At COP7 held in Marrakesh, Morocco in 2001, Least Developed Countries Fund (LDCF) was created to help LDCs prepare and implement their urgent and immediate adaptation needs under the National Adaptation Programme of Action (NAPA). Almost all these countries have prepared and submitted their programme but most of these projects remain to be funded. Many of the countries prepared them almost a decade ago; some may even need to be revisited to contextualise them. Given the low capacity of these countries, richer countries should contribute to the LDCF for the smooth implementation of the already designed programs

A new international climate fund called the Green Climate Fund (GCF) has been established to support the developing countries. LDCs are again given a special recognition and prioritized under this fund. However, the delivery of the finance has been very slow and the process is too complicated to access resources. Many LDC countries find the process too cumbersome, technical and beyond their capacity to meet the requirements as set up by the Fund. It is important to realise the low capacity of the LDCs and find ways to ease the process for these countries.

What needs to happen next to support poor countries

Developed countries alone have promised to mobilize US$100 billion per year by 2020 through to 2025. This is a positive sign but a short-term target with a fair share of allocation of this fund for the LDCs is also of urgent importance.  Many people and communities in the LDCs already suffer from the impact of climate change; hence, fast track support is needed for this particular group of vulnerable countries. Climate finance is also important for the LDCs to build their internal capacity in terms of institutional, policy and programmes. Similarly, assisting LDCs to boost their finance absorption capacity is of equal importance. LDC countries continue to rely on international agencies to implement their programmes and projects. International assistance should help them towards building their own institutions and strengthen capacity. Capacity building must be imbedded in any programmes and projects of the international funding stream. The Adaptation Fund and Green Climate Fund have set up readiness projects, which are important for the poor countries. This must be further strengthened so that the countries themselves can designed and implement projects in the future.

Timely delivery of promised climate finance can save lives and livelihoods of many communities, attain food security and build a resilient future for the poor countries. Climate finance can not only help LDCs fight climate change and take low carbon and climate resilient path but it can also assist them towards achieving sustainable development.

Raju Pandit Chhetri / Prakriti Resources Centre, Kathmandu, Nepal