Will the EU backtrack or fast-forward on global climate money?

The European Union is rumored to be preparing just a token handout for climate action in poor countries for the next three years, with no guarantee that this money is going to come on top of existing aid commitments, warns Oxfam International.

EU heads of state and government are meeting tomorrow in Brussels to hammer out final details of their position for the global climate talks taking place in Copenhagen. Finance for developing countries to tackle climate change has emerged as one of the key obstacles in the negotiations.

A key question facing EU leaders will be whether to move forward on financing by putting a concrete sum on the table for the money it will provide up to 2020. At the end of October, the EU said €22-50bn would be needed in public financing for poor countries, and offered to pay its fair share, but stopped short of saying how much. The EU is still to clarify whether this money should come on top of, or be diverted from, promises already made to poor countries on development aid.

Oxfam says the EU has the potential to propel negotiations forward by putting 35 billion euros (50 billion dollars) per year from 2013 on the table to help developing countries cope with global warming in the long run. This money must come on top of existing commitments made by rich countries to provide 0.7% of national income for development aid. Rich countries must not force poor people to choose between building flood shelters and hospitals.

The EU is prevaricating on its commitment to long-term financing, and preparing a much smaller sum to put on the table in Copenhagen for just the next 3 years, consisting only of recycled commitments already made to developing countries.

Big developing countries such as China have signaled that they are willing to increase - and formalize - already significant pledges to reduce emissions if rich countries provide the necessary support.

Tim Gore, Oxfam International’s EU climate change policy advisor, said:

″EU leaders can set the pace of negotiations in Copenhagen with their decisions on financing. They must stop prevaricating on their commitments to big, long-term money for poor countries. Offering just a token handout for the next 3 years made up of recycled promises won’t achieve the breakthrough in talks we need.

Putting a concrete sum for the EU’s fair share of the long-term finance needed, and guaranteeing that this won’t just re-brand existing commitments, could be a game-changer.”

Oxfam estimates that at least 75 million fewer children are likely to attend school and 8.6 million fewer people could have access to HIV/AIDS treatment if aid that would otherwise have been spent to meet the 0.7% commitment on health and education is diverted to tackle climate change. Cannibalizing aid promises to pay for climate change will condemn the Millennium Development Goals (MDGs) to failure.

Notes to editors

Background on EU finance position

The EU was the first negotiating bloc to put concrete numbers on the table for the total amount of public finance needed in developing countries – suggesting between €22-€50 billion per year by 2020 is needed. But there are concerns that the EU is now prepared to row back and only make commitments to “fast start” financing in Copenhagen (much lower, voluntary pledges of support from 2010-2012, which would give no assurances that poor countries will have the resources they need to cope with climate change). As UN climate chief Yvo de Boer has recently put it, “the world is waiting for the EU to commit to concrete financial numbers" for the EU’s long-term financing contribution in Copenhagen. 

The EU suggestion -put on the table at the October EU summit- of global public financing worth €22-€50 billion per year for developing countries to tackle climate change not only falls short of what is needed, it comes with a fatal flaw – there is no guarantee that this money would be “new” and not diverted from existing aid commitments. To have credibility in Copenhagen, the EU must clarify that its finance offer will not simply be a recycling of old promises.

Key EU countries

Who are the champions, swingers and blockers when it comes to climate finance?

UK, Netherlands, Belgium and Denmark have been pushing to make progress on the EU’s finance position in 2009. UK Prime Minister Gordon Brown was the first developed country leader to announce a figure of 100bn dollars for the climate finance needed in Copenhagen, and the first to announce he would personally attend the Copenhagen conference. UK, Netherlands and Denmark, recently joined by Belgium, have been the strongest champions for climate finance to be additional to existing aid commitments to provide 0.7% of national income. Others such as Ireland and Spain are said to be ready to agree to such a commitment.

Germany together with Poland and other Central and Eastern European (CEE) member states have been the main blockers this year on progress on the EU’s financing position, although there are signs that German Chancellor Angela Merkel is now prepared to lead again towards a strong deal in Copenhagen, having personally committed to attend the conference. Germany has said clearly that they will recycle existing aid commitments for climate finance, although the new Environment Minister, Norbert Roettgen, has recently expressed his discomfort with this position. For CEE countries, the issue of the internal financial burden-sharing between member states has gripped climate finance discussions in the EU all year. European leaders hope that this issue has now been resolved until after Copenhagen.

French environment minister Jean-Louis Borloo proposed on 7 December in Copenhagen that an extra 60 billion dollars per year over the next 10 years (40bn euros), on top of the 22-50bn euros already indicated by the EU, should be made available for the most vulnerable countries (least developed countries, poor islands states and many African countries).This is an important step forward but France still needs to make clear that this money should come on top of existing aid commitments. 

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