climate finance Archives - The India Climate Observatory

Why climate action must beware the fakery of funds

July 4, 2015 by Climate portal editor Leave a Comment

Residents use a boat to cross flood waters in Kota Bahru on December 28, 2014. Photo: RT / AFP / Mohd Rasfan. Photo by AFP Photo / Mohd Rasfan

We call upon the Ministry of Environment, Government of India, to stop pursuing the so-called Green Climate Fund as the means with which action to manage climate change can be financially supported. This so-called fund is in the end a means for the Western world – West Europe, Scandinavia, USA with Britain and Canada in tow, Australia and New Zealand, a feckless Japan and ditto South Korea – to maintain the empty but loud institutions they have set up by the dozens in the cause of climate change.

Inter Press Service has reported that the United Nations is seeking 100 billion US dollars per year by 2020 as part of a Green Climate Fund (GCF) “aimed at supporting developing countries strengthen their resilience and help adapt themselves to meet the foreboding challenges”. This is meretricious nonsense. Countries that the UN system, and the agencies of monetary ruin – World Bank, IMF, ADB and the like – call ‘developing’ do not need the prattling office-bearers of a crony international system to advise them. Countries of the South have plentiful intellectual, practical, financial and social resources to deal with climate change and the host of problems the Western countries have burdened our world with.

The Green Climate Fund, says the IPS report, may not be as realistic in its objectives as the Western-OECD alliance pretends but supporters of this Fund (naturally) are more concerned instead with how the target can be reached or neared: naturally because that is how they will derive a continuing relevance and legitimacy – both empty as far as we are concerned – which allows them to run expensive institutions and pay out immodest consultancies that serve only the Western-OECD alliance. Ignored by this glib army is the fact that, beginning from their own austerity-wracked countries, public finance for such profligacy is absent. Still they demand, like fahrenheit Shylocks, public finance for subsidies with which to “attract and leverage private investments”.

A host of ancillary agencies contributes to perpetuating this long-running fraud. Amongst the confused babble of Western-OECD support for the so-called Green Climate Fund can be found three common clauses: one, that developed nations should commit to increasing all public funding flows to 2020; two, that developed countries use new and innovative sources of finance toward the 2020 goal (such as redirected fossil fuel subsidies, carbon market revenues, financial transaction taxes, export credits); three, that all parties should clarify the definition of climate finance and development of methodologies so that accounting and reporting are improved.

These are nothing but cunning gambits advanced as justification for the continuing tenure of the Western-OECD climate-related institutions and their circles of charmed academic and finance cronies. First, developed countries have fallen short of basic overseas aid commitments for the last two generations, never mind climate finance. Under continuing austerity, it is foolish for the UN and its supporters on this subject to still preach in favour of a funding mechanism that rests on Western largesse.

Second, the ‘new and innovative’ has been experimented with for a decade with carbon exchanges and has made no impact (just as ‘deregulated’ energy markets, which are older, have not led to more sensible energy use by consumers or producers). But this is proposed in order to cement the positions of a new trading class, and its banking adjutants, in the area of climate finance. Third, the call for definitions and methodologies is part of the Western-led drive towards normative standards for the world, which will rely on its own Western bureaucracy to enforce the next mutation of trade sanctions on independent-minded countries and Southern country blocs – climate sanctions.

Our message to the profiteers of this true emerging market is: we can see through your ruse and know your game. Stop it now.

– Rahul Goswami

Carbon, money and promises

December 11, 2014 by Climate portal editor Leave a Comment

Sea level rise in the Solomon Islands is nearly three times the global average and low lying island communities are facing threats to food security and freshwater resources. Image: Thomson Reuters Foundation / Catherine Wilson

By the time the 20th meeting of any group comes around, one would think, questions such as “where will the money come from” ought to have been sorted out. Not apparently when it comes to international negotiations on climate change. The meeting which has been running since 1 December 2014 (and which is to end on the 12th), has not only failed to find enough sources of money so that countries can deal with the effects of climate change, it has also seen some searching questions being asked about what climate finance and green funds are in the first place.

This should be troubling to the thousands who have gathered in Lime, the capital of Peru, to discuss (for the 20th year running), a coordinated international response to the effects and impacts of climate change. Such questions – which are fundamental in nature and inconveniently reveal the deep disagreements between countries and between finance professionals – should not have been raised at this stage of the UN climate change negotiation process.

But they have been, and the delegates and representatives and, it must be said, opportunists of all shades who gather at such meetings are caught in a cleft stick. On the one hand, there is the ‘progress’ claimed by the UN Framework Convention on Climate Change (the UNFCCC) that substantial and real progress has been made in finding assured sums of money so that ‘developing’ and ‘less developed’ countries particularly can be supported in their efforts to tackle the effects of climate change (more floods, worse droughts, new diseases).

Level of risk and potential for adaptation, from the IPCC Fifth Assessment Report, 2014

Prakash Javadekar, Minister for Environment, said there is a need to ensure “an ambitious, comprehensive, equitable and balanced agreement in 2015 that takes into account the huge development needs, including access to financial resources and low carbon technological options for developing countries”. With such a declaration Javadekar has opened wide the door to interpretations of ‘comprehensive’, ‘equitable’, ‘balanced’ and ‘development needs’ in ways that very likely will add to the problem.

Nor does this help lighten the view, now apparently held by the western and ‘developed’ (that is, the EU, the OECD and in particular western Europe and north America) countries that India is resisting changes to the UNFCCC being attempted by them, such as reviews of what are called intended nationally determined contributions (INDCs) that will be declared by developing countries by June, 2015.

Other than disagreement in various tones and at different pitches, all countries have committed to sign a new climate agreement in Paris at the end of 2015, pledging climate action beyond 2020. So the UN has said, and if this is meant to show progress, in the usual roundabout UN manner, then the months between the Lima meeting and the Paris meeting will be spent by armies of administrators cooking up successfully consensual texts that reek of progress.

On the other hand, the propensity of governments and their associates to tweak definitions has been on embarrassing display. Consider Japan, and the news that emerged which showed that the country (which continues to be in denial about the effects of the Fukushima nuclear plant disaster) had counted US$ 1 billion for the construction of coal-fuelled power plants in Indonesia as part of its low carbon financing package. Yes, coal still provides some 40% of the world’s electricity supply and yes, coal is by far the largest source of greenhouse gas emissions. To get past the obvious contradiction, Tokyo’s officials at the Lima meeting argued the plants were more efficient and therefore greener than those that would have been built without their help.

Not as red-faced by such duplicity as they should have been, UN officials offered their own framing. “Climate finance aims at reducing emissions, and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts,” they wrote. Rather than contribute to the confusion, they should have come clean about the dismal performance of the green funding discussed in the three or four meetings before this one, during which a US$ 100 billion corpus was promised. The result so far? Less than US$ 10 billion in the bank. No wonder there’s so little bang for the climate buck.

Perhaps the UN Secretary-General, Ban Ki-moon, noted the anaemia for he asked countries to do more (in what direction was not clear) and at the same time avoided the question of how to resolve deep differences on the format for the pledges, which is a matter that seems to have engaged the attention of many of the negotiators. What ought to have engaged them instead is reducing the use of petroleum products, the use of resources with which far too many unnecessary trinkets are made and sold, and the use of climate negotiation jargon.

But there is too much inertia, and the negotiating circuit seems to serve itself first by quibbling about semantics that matter not one bit on the ground. Thus the European Union has insisted that countries’ pledges should only focus on carbon cuts; richer countries want to focus on new emissions targets, and so place the onus on developing countries whose emissions are growing fastest; ‘developing’ countries want to focus on pledges of aid. Some of this impinges upon what are called intended nationally determined contributions or INDCs.

Pertaining to this new concept, the latest from the climate negotiators’ fecund imagination, is the view held by some Indian groups (non-government and academic both) that India is neither supporting a so-called review of INDCs nor proposing an alternative. Bound with the new concept and the critiques of how it may be applied are other concepts – the principles of equity and common but differentiated responsibility. Such wrangling (to which official India is a party and to which the non-governmental organisations and academic collectives routinely contribute) is useless, for the answers are simplicity embodied: we must use less fossil fuel, less per head and less as a country, progressively every year; we must, as households and villages and city wards, pay much greater attention to the primary materials used to make the things we need and buy, and one surefire way of doing so is by educating adults about being responsible for climate change; we must limit, halt and reverse the trends of family and community consumption, for waste goes unremarked and so does greed.

– Rahul Goswami

How ADB cooks the climate pot

August 21, 2014 by Climate portal editor 1 Comment

The Asian Development Bank has, amongst the world’s multilateral development banks, been a bit of a latecomer to the area of climate financing with the help of modelling. Its senior peers – the World Bank and the European Bank for Reconstruction and Development – have been at it for a while, with the World Bank being rather in its own league if one was to judge by the tonnage of reports it has printed. The ADB probably holds its own on the matter against the Inter-American Development Bank and the African Development Bank, but this latest effort, I think, pushes it ahead of the last two.

Not for any reason that would gladden a farmer or a municipal worker, for that is not the audience intended for ‘Assessing the costs of climate change and adaptation in South Asia’ (Asian Development Bank, 2014), which was released to the Asian world a few days ago. But the volume should immensely help the modelling crews from a dozen and more international agencies that specialise in this arcane craft. Providing the scientific basis around which a multilateral lending bank can plan its climate financing strategies will help the craft find a future. Rather less sunny is the outlook for states and districts, cities and panchayats, who may find an over-zealous administrator or two quoting blithely from such a report while in search of elusive ‘mitigation’.

The reassuring shapes of indecipherable models

In my view, this volume is useless. It is so because it is based on a variety of modelling computations which have their origin in the methods used for the IPCC’s Fourth Assessment Report (that was released in 2007). The permanent problem with all such ‘earth science’ modelling approaches is that it uses global data sets which must be ‘downscaled’ to local regions. No matter how sophisticated they are claimed to be by their inventors and sponsors, such models can only work with regular and large sets of well-scrubbed data that have been collected the same way over a long period of time and recorded reliably. This may serve a ‘global’ model (which is irrelevant to us in the districts) but in almost every single case of ‘downscaling’, a scaling down may make a smattering of sense if there is some comparable data relating to the region for which the scaling is taking place. And this correlation, I can assure you, is not possible 99 times out of 100.

But that doesn’t bother the ADB, because it is a bank, it must find a way for Asian countries to agree to taking loans that help them mitigate the effects of rampaging climate change, as this report tries to convince us about. Which is why the ADB has said its unimpeachable analysis is based on “a three-step modeling approach” and this is “(i) regional climate modeling (ii) physical impact assessment, and (iii) economic assessment”, the last aspect being what they’re betting the thermometer on.

The numbers that have emerged from the ADB’s computable general equilibrium model must be satisfyingly enormous to the bank’s thematic project directors and country directors. For the scenario modellers have provided the ammunition for the bank to say: “The region requires funding with the magnitude of 1.3% of GDP on average per annum between 2010 and 2050 under the business-as-usual-1 scenario. The cost could rise to up to 2.3% (upper range) of GDP per annum taking into account climate uncertainties. To avoid climate change impact under the business-as-usual-2 scenario, adaptation cost of around $73 billion per annum on the average is required between now and 2050.”

I could not, in this needlessly dense and poorly written volume, find a mention of which rice strains have been measured for their yields in the example given for India, when the ADB report makes some dire forecasts about how yields will be lowered or will plunge under several forecast conditions. Perhaps they were buried in some footnote I have overlooked, but considering that the International Rice Research Institute (one of the more dangerous CGIAR monster institutes) has in its genebank more than 40,000 varieties from India, and considering that rice conservationist Debal Deb cultivates 920 varieties himself, the ADB (and its modelling troupe) talking about rice ‘yield’ means nothing without telling us which variety in which region. And that sort of negligence naturally leads me to ask what sort of thermometers they consulted while assembling these models.

– Rahul Goswami