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PARIS SUMMIT 2015
17 September 2015 14:40

Paris 2015: Tracking requests for climate finance

Sophie Yeo

Sophie Yeo

09.17.15
Solar panels being assembled in a factory near Jaipur, Rajasthan. The panels are for export to other countries and also for domestic use in India where solar power is helping to bring electricity to remote villages for the first time.
© Robert Wallis/Corbis
Sophie Yeo

Sophie Yeo

17.09.2015 | 2:40pm
Paris Summit 2015Paris 2015: Tracking requests for climate finance

Updated 23 October.

Ahead of the UN’s climate conference in Paris this December, countries are making pledges to tackle their greenhouse gas emissions.

Known in UN jargon as  “intended nationally determined contributions” (INDCs), these pledges  involve actions such as transforming their energy systems, reducing deforestation and making transport cleaner. In some cases, countries have also outlined actions that will make them more resilient to the impacts of climate change.

These activities cost money. While every country is expected to address its emissions as part of the UN’s forthcoming climate agreement, there is an expectation that the efforts of poorer nations will be supplemented by international aid.

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Therefore, many nations have included a financial element to their INDC. Some of the most detailed outline the cost of implementing their plan, the amount they will put up from domestic budgets, and how much they hope to receive from international donors.

Carbon Brief is tracking the financial elements to the INDCs, including requests for money, domestic funding and any overall price tags that countries have attached to their plans.

Carbon Brief’s climate finance request tracker. Visit our Google doc for the full, interactive version – click to expand.

Developing country plans for funding INDCs up to 2030. Data from INDCs and compiled by Carbon Brief. Last updated on 23 October 2015. Chart by Carbon Brief.

Carbon Brief analysis shows that, as of 23 October 2015, developing countries have said they will need a total of around $3,534bn to implement their INDCs. Of this, $81bn will come from domestic sources, and $407bn has been requested from international donors. The remainder is made up of costs that have not been specifically assigned to domestic or international funds – including India’s $2.5 trillion.

The majority of the INDCs cover the period 2015-2030, meaning that requests for international finance average out, so far, at $27.13bn per year.

International finance

The world of international  climate finance is broadly split into two camps. There are the developed nations, which have pledged to  donate money, and the developing nations, which will receive it.

In some cases, the line blurs. Mexico and Mongolia, for instance, have unusually both pledged donations, despite being classed as developing countries. And not every developing nation will necessarily receive funding.

In 2009, it was agreed that countries would provide climate finance amounting to $100bn a year by 2020, from a combination of both public and private money. Much of this is expected to be channelled through the Green Climate Fund, a UN-backed bank for climate-related projects.

INDCs

Yet there has always been resistance to formally including finance in the INDCs – partly because there is the possibility that the commitments they contain will become legally binding as part of the UN’s new climate deal.

Most INDCs cover the period up to 2030. Many developed nations are nervous about committing to specific financial donations beyond their budgeted periods, and sometimes have their hands tied by national parliamentary processes.

On the other hand, developing countries have argued that making any long term plans to reduce emissions is difficult until future funding is clarified.

When the information requirements for INDCs were set out at the UN’s 2014 conference in Lima, finance was, therefore, excluded. However, many poorer countries have chosen to include this information voluntarily.

Caveats

This information can be somewhat haphazard, with countries providing varying levels of clarity on the extent to which their emissions pledge is conditional upon international financial support.

Some, like  Tunisia and  Jordan, have set out explicitly how much their INDC will cost to implement, and how they expect to divide this sum between domestic and international funding.

Others, such as  Ethiopia, have put a price tag on their INDC, but not explained how much money they will need from abroad. Countries such as  Algeria and  Colombia say that their pledge is conditional upon international support without saying how much they will need.

More pledges coming

It is worth bearing in mind that more than a hundred of the 154 developing countries involved in the UN process have yet to submit their pledges. Carbon Brief will update this tracker as new INDCs are submitted.

It is certain that many more will ask for money to bolster their climate plans over the next couple of months. In addition, countries that have submitted their pledges, but have not made quantified requests for money, are expected to do so soon.

This makes it likely that the total sum requested will exceed the $100bn per year that rich countries have promised to provide by 2020.

There’s already pressure on developed countries to increase the amount of money they’re promising to provide. One option in the current draft of the UN text asks them to double their pledge to $200bn a year by 2030.

At the very least, developed countries are expected to show how they will scale up the level of donations over the coming years. So far, they have pledged a grand total of  $10.2bn – a long way from the $100bn a year target.

The private sector could also have a role to play in filling any gap. With governments shying away from overstretching their budgets, many hope that businesses will see opportunities for a return from investments in renewable energy and other projects. However, adaptation projects offer a less enticing prospect to the private sector, and are expected to be largely grant-based.

Willingness to provide these funds is not only important in helping poor countries to tackle climate change on a practical level. It also one of the foundations for the trust – or lack thereof – that will determine whether the UN climate deal in December is a success.

Image: Solar panels being assembled in a factory near Jaipur, Rajasthan. © Robert Wallis/Corbis.
Sharelines from this story
  • @CarbonBrief is tracking the finance of #INDCs, incl. requests for money, domestic funding & overall price tags #COP21
  • A summary of how climate pledges are planning to be financed #ClimateFinance #INDC #COP21

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