Speech by Minister Jacqueline Cramer of the Netherlands at the Environment Council 23 November 2009
Finance and Funds in the Copenhagen Agreement
- Actions of developing countries are crucial to fight climate change. We need clarity on finance for these actions, especially their sources and governance.
- First sources of finance. Let me begin with fast start finance. Developed countries should put money on the table in Copenhagen. 5 to 7 billion euro’s each year in the next three years. Europe should continue to put pressure on other developed countries. There is only one way to do that: we need to show leadership again, with an agreement on our EU pledge at the next European Council. I trust we all call on our heads of State to take this step and come up with an ambitious pledge.
- We need clarity on long term finance as well. The European Council on 30 October has confirmed new and additional finance in the order of 100 billion euro’s per year in 2020. Contributions will be according to a scale based on GDP and emissions. There should be a considerable weight on emissions and growing over time. This is our common position since the last European Council. In using this mandate I would like to underline that the scale should be dynamically updated. And all our notions on the level of finance and the contribution scale should be part of our Copenhagen agreement. Operational details of the scale should be agreed next year.
- Second the financial governance. There are many views on this. Some try to bring all money under the Convention. Some establish semi new funds partly outside of the UNFCCC. We as EU like to build on existing institutions. Yet we find it hard to engage with others. I will outline a proposal, including a new and additional fund, that combines these views and adds value.
- We use existing institutions as “windows” for adaptation, mitigation and capacity building. The Adaptation Fund, the climate investment funds and the GEF operate in a reformed way, under close guidance of the COP. Together they are the multi-window financial mechanism of the Copenhagen Agreement. Others sell this as a new fund. That is OK, as long as it builds on existing institutions.
- Both scale and balanced distribution should be adequate. That doesn’t mean all money should be centrally collected. Donors should have flexibility to channel their money through bilateral and multilateral channels. However, this makes it more necessary to track overall progress in funding. We will have reports from the funds, national communications and the registry of actions to provide the basis for this. On top of this we need a high level body. It will advise the COP on correcting thematic or regional imbalances.
- We need a new and additional fund for these strategic interventions. On request of the COP, it allocates finance to different existing funds or windows. The allocation serves specific objectives to repair imbalances. The new fund will not finance individual projects of countries. By nature it is close to being an “account” or “facility”. But as a matter of political willingness I suggest to call it the “Copenhagen Strategic Fund” .
- We should make sure that there is sufficient money in this strategic fund to perform credibly. The fund therefore collects funding from international sources, such as instruments addressing aviation and maritime transport, auctioning of international allowances and other possibilities. The new fund could also be used to ensure an adequate basic funding level for the needs of the most poor and vulnerable.
- Establishing a new fund like this brings an amount of funding under the authority of the COP. It combines flexibility of donors with the ability for strategic interventions beyond the usual paper guidance we give. It builds on existing institutions. But it has the capacity to ensure balance and oversight. All with a strengthened guidance by the COP. So I suggest to engage with other partners based on this view.