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Africa: Climate Change Action, Who Will Pay?
AfricaFocus Bulletin
Jun 18, 2009 (090618)
(Reposted from sources cited below)
Editor's Note
"The global climate is changing rapidly. The science is clear: the
process of industrialisation has caused the concentration of
greenhouse gases in the atmosphere to rise steadily. ...
Environmental impacts have begun and will continue to be felt first
and hardest by some of the poorest people in the world. By 2020,
parts of Africa will see crop yields from rain-fed agriculture fall
by up to 50%. The costs of mitigation - that is, changing our
activities to decrease our use of greenhouse gases - and
adaptation, adjusting to and paying for the additional
developmental consequences of increased temperatures - will run
into tens, if not hundreds, of billions of dollars each year. But
where will the money come from?" - Stamp Out Poverty report, May
2009
With a new energy bill before the U.S. Congress and the Copenhagen
Climate Change Conference (Dec. 7-18) rapidly approaching, public
attention to the climate change crisis is increasing. But the
complexity of the issues and the weight of special interests
threaten to suffocate changes that are even remotely comparable to
the scale of the problem.
Such a failure would have particularly great consequences for
African countries. African Environmental ministers meeting in
Nairobi in May to prepare a common negotiating position for
Copenhagen stressed that "while Africa has contributed the least to
the increasing concentration of greenhouse gases in the atmosphere,
it is the most vulnerable continent to the impacts of climate
change and has the least capacity to adapt," The ministers noted,
among other points, that "existing financial mechanisms are
inadequate, complex and fragmented."
This AfricaFocus Bulletin contains a briefing note based on the
full Stamp Out Poverty report entitled "Assessing the Alternatives:
Financing climate change mitigation and adaptation in developing
countries (http://www.stampoutpoverty.org). This report evaluates
the options for new funding mechanisms, and advocates a mix,
including a currency transaction tax.
Also included in this Bulletin are a selection of links and brief
descriptions of other recent reports on the issue of climate
change, particularly as it affects Africa.
These links include (for short descriptions of each see below):
(1) J. P. Thompson, Climate Change in Africa, December 2008
http://www.africafiles.org/atissueezine.asp?issue=issue9
http://www.africafiles.org/printableversion.asp?id=19552
(2) African Ministerial Conference on the Environment (AMCEN)
3rd Special Session, Nairobi, 25-29 May, 2009
http://www.unep.org/roa/Amcen/Amcen_Events/3rd_ss/default.asp
(3) In Search of Shelter: Mapping the Effects of Climate Change on
Human Migration and Displacement
CARE International, UN University, Columbia University
May, 2009
http://www.care.org/getinvolved/advocacy/migration_report.asp
(4) Anthony Costello et al., "Managing the health effects of
climate change", Lancet (Published May 13, 2009)
http://www.thelancet.com/climate-change
(5) Links to articles on Climate Change from Choike, a web portal
dedicated to improving the visibility of the work done by NGOs and
social movements from the global South.
http://www.choike.org/2009/eng/informes/268.html
(6) G8+5 Joint Academies' Statement
http://royalsociety.org/document.asp?tip=0&id=8595
Also new on the AfricaFocus website is a page with links to
previous AfricaFocus Bulletins on environment and climate change.
See http://www.africafocus.org/envexp.php
Of particular importance as basic reference documents are the Stern
Report from 2006 (http://www.africafocus.org/docs06/ster0611.php)
and the UNEP Africa Environmental Atlas from 2008
(http://www.africafocus.org/docs08/env0806.php).
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
Assessing the Alternatives: Financing climate change mitigation and
adaptation in developing countries
Stamp Out Poverty
http://www.stampoutpoverty.org
This briefing is available at:
http://www.stampoutpoverty.org/climatefinancebriefing
The report on which it is based is available at:
http://www.stampoutpoverty.org/climatefinancereport
Contact: David Hillman, Stamp Out Poverty;
[email protected]
May 2009
The global climate is changing rapidly. The science is clear: the
process of industrialisation has caused the concentration of
greenhouse gases in the atmosphere to rise steadily. If we are to
avoid triggering runaway, irreversible and catastrophic climate
change we need to restrict global temperature increases to as far
below 2�C as possible. Perhaps the most dramatic illustration is
the melting of the Arctic ice cap, predicted to happen as early as
2013, the first time there will be watery emptiness at the top of
the world for more than a million years.
Environmental impacts have begun and will continue to be felt first
and hardest by some of the poorest people in the world. By 2020,
parts of Africa will see crop yields from rain-fed agriculture fall
by up to 50%. The costs of mitigation - that is, changing our
activities to decrease our use of greenhouse gases - and
adaptation, adjusting to and paying for the additional
developmental consequences of increased temperatures - will run
into tens, if not hundreds, of billions of dollars each year. But
where will the money come from?
Answering that question is the purpose of a new report from Stamp
Out Poverty, written by the new economics foundation, which
provides the basis of this briefing paper focusing on new sources
of substantial on-going finance. This is one of the principal
challenges in the run-up to the Copenhagen conference in December,
2009. Without a solution to how the massive costs of climate change
will be met, meaningful progress will not be possible. Whilst the
report concludes with the recommendation of a portfolio of
mechanisms to raise substantial revenue, as important is its
articulation of clear principles and criteria upon which current
and future proposals can be assessed.
Adaptation financing
Clearly, an overarching concern whether speaking of mitigation or
adaptation finance is that we arrive at a fair, sufficient, global
deal, that does not adversely affect the world's poorest and most
vulnerable people, and at the same time safeguards (rather than
diminishes) current finance for development.
When addressing adaptation, specifically, the UN Framework
Convention on Climate Change (UNFCCC) estimates costs to developing
countries in the range of $49-$171 billion each year relating to
agriculture, forestry, fisheries, water supply, human health,
coastal zones and infrastructure. The central factor guiding
adaptation finance concerns historical responsibility. Whose fault
is it that the planet is warming up? Industrialisation in developed
countries is responsible for the lion's share of the problem. As
such, the 'polluter pays principle' should apply - essentially, the
developed world needs to make compensation payments to developing
countries for the environmental damage it has caused. Beyond this
a key consideration is 'ability to pay', and again, it is developed
countries who have the greater capacity.
With the source of flows from North to South in mind, the report
develops criteria to judge financing proposals which include:
- Sufficiency - where the funds generated are equal to the scale of
the task
- Predictability - where funds are generated in as stable and
predictable a way as possible
- Equity - where contributions reflect both historical
responsibility and capacity to pay
- Additionality - where funds are 'new and additional' to existing
aid commitments
- Verifiability - where funds are collected and disbursed in a
transparent and verifiable manner
- Ease of implementation - where mechanisms are favoured that can
be readily implemented.
As well as these criteria it is argued that a combination of
financing mechanisms is to be preferred to one silver bullet
solution and that as far as possible mechanisms should be a)
broadly international in form, and b) diverse in their cost impact
ie not designed to fall on one small constituency but more
economically spread out.
A number of proposals have been submitted to the UNFCCC by national
governments and other bodies regarding the funding of adaptation
and mitigation in developing countries. In the report twelve
proposals are reviewed. Please see Box 1 for a brief description of
each one.
BOX 1 Twelve proposals for mitigation and adaptation financing
1 The G77+ China proposal - developed countries provide funding of
0.5% of GDP mainly for mitigation
2 The World Bank's Pilot Programme for Climate Resilience (PPCR) -
discretionary loans for adaptation given by developed countries as
part of ODA through the World Bank
3 The Mexican Climate Change Fund (MCCF) - countries are obliged to
contribute to the fund on the basis of emissions, population and
income, mainly for mitigation
4 The Swiss Carbon Tax proposal - a global tax on all carbon
emissions in all countries, but with a per capita exemption that
would benefit some poorer countries
5 The US Auction Levy - where a small proportion of the proceeds of
auctioning carbon permits within the US are earmarked for funding
adaptation activities in developing countries
6 The EU Emission Trading Scheme (ETS) Auction Levy - where a
proportion of the proceeds of auctioning carbon permits within the
countries of the European Union are earmarked for funding
adaptation activities in developing countries
7 The Global Capital Fund Mechanism - bonds are issued on the
international capital markets and the proceeds are invested in
mitigation and adaptation
8 The Norwegian 'Assigned Amount Units' (AAU) proposal - the
international auctioning of national carbon emission permits
9 The Tuvalu Burden Sharing Mechanism - a levy on air travel and
freight shipping with different rates for developed and developing
countries and exclusions for travel to and from Least Developed
Countries (LDCs)
10 The International Air Passenger Adaptation Levy (IAPAL) - a levy
on international air travel
11 The International Maritime Emission Reduction Scheme (IMERS) -
a levy on international shipping
12 The Currency Transaction Tax (CTT) - a very small duty on
international currency transactions as a long term funding stream
for adaptation
Mitigation financing
The UNFCCC speaks of figures upward of $200 billion per year that
will be required to fund mitigation in developing countries,
breaking down the costs into the following categories: energy,
industry, buildings, transport, waste, agriculture, forestry and
technology.
Moving away from fossil-fuel dependence for energy generation is
predicted to be the most expensive category. The Stern Review
states that 'investing' today to move the economy onto a low-carbon
footing would certainly be expensive, but far less so than dealing
with the economic consequences of the level of climate change
resulting from continuing with 'business as usual' - a colossal 5%-
20% of global GDP on an on-going basis.
In terms of ways forward the report describes two approaches:
quantity-based or price-based. That is, to shift to a sustainable,
low-carbon trajectory we can either restrict the quantity of global
emissions, or we can increase the costs of these emissions to
achieve the same result. In policy terms these two options equate
to a global limit, or 'cap'; or to a global carbon tax. Either
option can only work in the context of a sound and effective global
deal to limit climate change, which is based on historical fairness
and where future human development is an integral part.
Responsibility and capacity to pay
It is essential that decisions on climate change financing be made
on a fair and equitable basis, using clear principles, and that
national contributions should vary to reflect responsibility and
capacity to pay. One of the recognised systems by which to assess
which developed countries ought to shoulder what proportion of
financial responsibility, in respect of both mitigation and
adaptation, is the Greenhouse Development Rights (GDR) framework.
[see http://www.ecoequity.org] Fundamental to the GDR approach is
firstly the need for emergency measures to reduce global carbon
emissions rapidly to avoid global temperature rise of 2�C; and
secondly the overriding need for poverty reduction in developing
countries.
Under the framework, Responsibility is calculated by taking each
country's total 'cumulative' emissions per capita, and Capability
is calculated using per capita national income data, adjusted to
reflect differences in purchasing power and inequality from one
country to another. As well, the rights of poor people to develop
are safeguarded through the use of an income threshold; the greater
the proportion of a country's population that falls below this
poverty line, the less that country is required to invest. Finally,
proportionate reponsibility can be determined through the use of a
Responsibility and Capacity Index.
Recommendations
Adaptation
A set of criteria was applied to the twelve proposals which,
through the use of an indicative scoring system, enabled them to be
compared. At the end of this process it was clear that no one
instrument would generate a sufficient volume of finance and that
a portfolio approach be adopted. One possible combination, the
report recommends, applies the Norwegian �Assigned Amount Units�
Levy at 2%, raising around $14 billion pa, combined with the
International Air Passenger Adaptation Levy, raising $10 billion
pa, and the IMERS levy on international shipping, raising $15
billion pa. This would amount to $39 billion a year; however by
adding in the Currency Transaction Tax, which could raise in the
region of $40 billion pa, the total generated would climb to
approximately $79 billion a year.
BOX 2 Governance and disbursement of funds
While this paper focuses solely on the raising of finance, the
following are key principles regarding institutional arrangements
and the spending of funds:
Governance
1 Representation - governing bodies should have equitable, and
balanced participation
2 Decision making and activities must be transparent
3 Financing must be accessible to all developing countries,
specifically poor and vulnerable ones such as LDCs which often
struggle to access funding
4 Financing should be carried out under the auspices of the UNFCCC
5 Funds for adaptation should not be made in the form of loans
Disbursement
1 Funding must be distributed fairly and through existing
mechanisms, where possible: for adaptation, priority must be given
to the poorest and most vulnerable countries and communities within
those countries
2 Principles of sustainable development must be taken into account,
and projects should comply with international and national
environmental agreements
2 The Greenhouse Development Rights Framework: The right to
development in a climate constrained world. Paul Baer, Tom
Athanasiou, Sivan Kartha, and Eric Kemp-Benedict. Published by the
Heinrich B�ll Foundation, Christian Aid, EcoEquity and the
Stockholm Environment Institute. Revised second edition. Berlin,
November 2008. Available at:
3 The GDR framework is one option amongst a number of alternatives
for assessing responsibility and capability while taking into
account development needs. In this report we do not seek to
establish a definitive framework.
Mitigation
The report proposes that an equitably designed global carbon market
or a global carbon tax could constitute the principal source of
funding for mitigation if based on the ambitious global climate
deal that is needed. It is likely, however, that this would not
provide sufficient transfers from North to South to finance
mitigation fully, nor would these funds necessarily reflect equity
considerations. To ensure sufficiency and equity for financing
mitigation, it is proposed that the total volume could be augmented
through measures such as the Mexican Climate Change Fund. Such a
mechanism could be constructed to maintain equitable contributions
on an ongoing basis.
Political will and decision-making
The purpose of this report is to set out a way of thinking to help
assess the financing proposals now before us. In the end, it is
political intention and feasibility that will determine whether
some or any of these mechanisms will be adopted. However, the need
is so great and the cost of failure so immense, that we hope there
is a determination to agree a mix of instruments in Copenhagen and
that this report can assist in that decision-making.
Selected Recent Climate Change Reports
(1) J. P. Thompson, Climate Change in Africa, December 2008
http://www.africafiles.org/atissueezine.asp?issue=issue9
http://www.africafiles.org/printableversion.asp?id=19552
"Climate change is having a disproportionate effect on Africa: the
impacts are more devastating than elsewhere and the people have
contributed less to cause it. This editorial highlights the problem
of carbon dioxide emissions and discusses the role of
deforestation. It is a potent example of opportunities squandered
by the skewed, profit-driven mitigation strategies of the North,
which fail to include local African knowledge and input. Without a
more holistic, bottom-up approach, the fate of millions is
extremely bleak."
Clearly written 8-page summary article, with references. The first
of a multi-part series with case studies focusing on East Africa,
Cameroon, and gender.
(2) African Ministerial Conference on the Environment (AMCEN)
3rd Special Session, Nairobi, 25-29 May, 2009
http://www.unep.org/roa/Amcen/Amcen_Events/3rd_ss/default.asp
The conference issued the Nairobi Declaration as a basis for a
common African negotiating position at the Copenhagen climate
change conference. The full text of the declaration is available
at http://tinyurl.com/m98lb3
Among the points stressed in the 5-page declaration:
- Expressing concern at the scientific conclusions contained in the
fourth assessment report of the Intergovernmental Panel on Climate
Change, particularly as they relate to the social, economic and
environmental impacts of climate change in Africa and noting that,
while Africa has contributed the least to the increasing
concentration of greenhouse gases in the atmosphere, it is the most
vulnerable continent to the impacts of climate change and has the
least capacity to adapt,
- 11. To urge developed countries to set ambitious targets to
reduce their emissions, by 2020, of at least 40 per cent below 1990
levels, and, by 2050, by between 80 and 95 per cent below those
levels, to achieve the concentration of 450 ppm of carbon dioxide
equivalent in the atmosphere;
- 13. To reaffirm that Africa, in the context of environmental
justice, should be equitably compensated for environmental, social
and economic losses and to emphasize that Africa requires
substantially scaled-up finance, technology and capacity-building
for adaptation and risk management.
- 15. To urge that the financial resources required to tackle
climate change should be new and additional, adequate, predictable,
sustainable and provided primarily in the form of grants and other
innovative financing mechanisms and instruments, such as
debt-for-nature swaps;
(3) In Search of Shelter: Mapping the Effects of Climate Change on
Human Migration and Displacement
CARE International, UN University, Columbia University
May, 2009
http://www.care.org/getinvolved/advocacy/migration_report.asp
"The negative impacts of climate change are already causing
migration and displacement. The exact number of people that will be
on the move by mid-century is uncertain. However, the scope and
scale could vastly exceed anything that has occurred before. The
International Organisation of Migration (IOM) estimates that there
may be 200 million environmentally-induced migrants by 2050. ...
People in the least developed countries and island states will be
affected first and worst."
This 36-page report includes overview of issues and section on West
Africa and the Nile Delta as two of the case studies.
(4) Anthony Costello et al., "Managing the health effects of
climate change", Lancet (Published May 13, 2009)
http://www.thelancet.com/climate-change
41-page report, 19M pdf
The warming of the planet now represents the greatest public health
threat, surpassing infectious diseases, water shortages and
poverty, according to a team of researchers at the University
College London Institute of Global Health Commission.
Researchers focus on key areas that connect climate change to
health outcomes: changing patterns of disease and mortality, food,
water and sanitation, shelter, extreme events and population
migration. Effects of climate change on health, they conclude, will
affect most populations in the next decades and put the lives and
wellbeing of billions of people at increased risk.
(5) Links to articles on Climate Change from Choike, a web portal
dedicated to improving the visibility of the work done by NGOs and
social movements from the global South. Includes recent articles
from Third World Network, Carbon Trade Watch, and other groups.
http://www.choike.org/2009/eng/informes/268.html
Includes a call to "repay the climate debt" and a primer on climate
debt.
http://www.choike.org/2009/eng/informes/7531.html
(6) G8+5 Joint Academies' Statement
http://royalsociety.org/document.asp?tip=0&id=8595
The national scientific academies of Brazil, Canada, China, France,
Germany, India, Italy, Japan, Mexico, Russia, South Africa, United
Kingdom and the United States have issued a joint statement calling
on their governments and the upcoming Copenhagen Conference to take
decisive action of climate change.
The statement highlights that climate change is happening even
faster than previously estimated and that changes to energy
strategies will be key to addressing the issue. Among other
measures, it calls on all governments to agree emission reduction
targets to deliver approximately 50% reduction in global emissions
from 1990 levels by 2050;
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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