What progress was made regarding climate finance at the 2009 talks in Copenhagen? The ‘Copenhagen Accord’ gives some clear promises and numbers for both short- and long-term financial support to help developing countries, especially the most vulnerable, to address climate change. It pledges US$10 billion per year from 2010-2012, then US$100 billion per year from 2020. However, as the Accord is a non-binding political agreement, if and how those commitments can be fulfilled remains uncertain. The Advisory Group on Climate Change Financing will submit its final recommendations before the Cancun meeting in December 2010.
The ‘Copenhagen Accord’ was created as a compromise document in a last minute face-saving effort; a small group of 28 countries (out of the 193 represented at Copenhagen) negotiated the text at the request of the Danish Conference of Parties (COP) presidency. However, with several member countries openly objecting to the document, the delegates simply ‘took note’ of the Accord, depriving it of legal status.
Copenhagen revealed the possibility of a division of the global climate negotiation process. On one side, there is a transparent multilateral process at the UNFCCC. On the other side, the Copenhagen Accord was hammered out by a small group of UNFCCC parties in a less transparent two days of meetings on the sidelines of the Conference of Parties.
The Copenhagen Accord devotes several paragraphs to the issue of climate finance:
Short-term finance
- The accord calls for the provision of ‘scaled up, new and additional, predictable and adequate funding as well as improved access’ to developing countries for mitigation, adaptation, REDD-plus, technology development and transfer and capacity building.
- Short-term finance ‘approaching’ US$30 billion for 2010 to 2012 is to be used in equal parts for mitigation and adaptation, with preferred access for the adaptation monies going to least developed and small island states and Africa.
- It is significant that more definite language is not used for funding that is to be committed immediately.
Long-term finance
- Paragraph 8 of the Copenhagen Accord refers to mobilisation of US$100 billion a year by 2020 to address the needs of developing countries. This is intended to come from a wide variety of sources, including international public as well as private contributions.
- The Accord lacks reference to a financing baseline, a starting year or starting amount. Without this, verifiable accounting of pledges will be difficult.
- The Accord stipulates the creation of a High Level Advisory Group under COP guidance to determine how the revenue for climate financing goals can be achieved. The Group has started work and is set to report before Cancun.
Additional finance
- The Accord refers to alternative sources of finance, which could include the auctioning of emission allowances; cap-and-trade schemes; international taxes on air and maritime transport; a financial transactions tax; and a global reserve currency managed by the International Monetary Fund.
- The Copenhagen Green Climate Fund is supposed to be established to manage future climate finance sums. For the Fund to operate under the Convention’s Financial Mechanism, a formal COP decision, meaning the agreement of all parties, is needed. Such a consensus might come at the next COP in Cancun in December 2010, or later, if at all.
- It remains unclear if the Copenhagen Accord will inform a resumed UNFCCC negotiating process, or whether it will effectively supersede the two UNFCCC working group reports from Copenhagen and serve itself as the basis for further international climate negotiations. For climate change financing, this uncertainty has major consequences.
