Europe Seems Hesitant in Pledging Green Funds to Developing Countries

  • Published on June 20th, 2009

Getting no support from other developed nations like United States and Australia the European Union has so far failed to commit funds for developing and poor countries to help them mitigate effects of the changing climate. EU is under tremendous pressure to pledge funds as consistent monetary support to the developing countries is essential to make the next climate treaty a success.

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During the Bali Climate Change Conference, held December 2007, it was agreed that the developed nations will create an Adaptation Fund to aid the developing countries acquire the new and clean energy technologies thus reducing their carbon emissions. This December, when the landmark Copenhagen Climate Change Conference is scheduled to take place, will mark two years of inaction on part of the developed countries.

While the European Union has always recognized its responsibility to help developing countries, the promises made have not been translated into concrete actions. Response from other developed nations has been dismal too. United States and Australia have no system in place to raise funds for the Adaptation Fund. The proposed emissions trading scheme in the United States would see industries getting emission rights for free, raising serious questions about the effectiveness of the scheme. Australia has delayed implementing its emissions trading scheme citing financial pressures owing to the economic recession.

Financial aid is one of the many contentious issues raised by developing countries in all the Climate Change Conferences. Without promising financial aid the developed countries would not be able to convince the developing countries like India and China to agree to emission reductions thus putting the climate treaty in jeopardy. The developing countries have made it clear that the rich nations need to do much more by setting more ambitious emission reduction goals and delivering on the promises of financial aid.

In an open letter to the European Council which met from 18 – 19 June at Brussels, a group of legislators had some valuable points to share.

The breaking of this promise further erodes the trust between developed and developing countries. We should not be treating this process like a tactical trade negotiation where everything can be agreed at the last minute. The later we put money on the table, the less time and incentive developing countries will have to prepare ambitious plans and the greater the risk of failure at Copenhagen in December.

Calling for swift action they demanded that the EU members,

1) Publicly recognize the 65-90bn euros a year of financial transfers required from developed to developing countries to make a post-2012 framework effective.

2) Accept the EU’s fair share of this figure, according to the EU’s share of emissions.

3) Declare that climate finance will be new and additional to existing aid commitments.

4) Begin a debate with the public about why this investment is necessary – not for charity, but to protect our own prosperity.

The European Council agreed ‘in principle’ on the funding issue but failed, yet again, to give a definite figure. It simply said that the European Union recognizes it responsibility in controlling carbon emissions and helping the developing countries move to cleaner energy systems. The European Council in its statement said that the amount of aid that a developed nation must contribute should be based on the state of the economy and the amount of carbon emissions it produced. Clearly this statement points to an internal pressure from prominent members like Germany, Britain and France who would like the United States, one of the largest emitters of greenhouse gases, to commit much more in terms of monetary support and emission reduction.

It seems that the economic recession has tied the hands of the member nations and they are reluctant to put additional financial burden on their industries. And even though the logic behind this principle would seem reasonable it could most definitely create a deadlock when delegates from almost 200 countries meet in Copenhagen to discuss the next climate treaty.

About the Author

currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

1 comment

  • Huq said this money cannot be counted towards the Bonn agreement because it was part of general overseas aid. "The Bonn agreement is clear that the money paid to help developing countries cope with climate change must be additional. Just counting overseas development aid as money for climate change adaptation cuts no ice and is double counting."

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