National Finance Helps Asia and the Pacific Lead the Way on Climate Change
A vital round of United Nations climate change negotiations will get underway in Lima, Peru, in December. This will mark a significant milestone for the crucial Paris Summit on climate change that is a year away. The summit will determine if a global deal on climate is possible. As government negotiators return like pilgrims to the annual climate negotiations, they take with them exciting new developments in climate finance and planning from Asia and the Pacific.
At the climate talks in Lima, climate finance will again be at the forefront of negotiations and key in reaching a global climate agreement. At the Secretary General’s climate summit in September, a total of US $2.3 billion was pledged towards the Green Climate Fund, with contributions of US $1 billion each from Germany and France. Just last week President Obama announced a further contribution of up to US$ 3 billion for the fund. And as of this week, pledges to the green climate fund have reached US $ 9.3 billion. All of this bodes well for the US$ 10 billion target some have set for the fund.
This is also good news for the Asia Pacific region. So far, countries in the region have received a quarter of all global public climate finance. India and China are the largest recipients. Nineteen dedicated climate funds and initiatives have approved more than US$ 2 billion for projects in the region, since 2003. With many countries in Asia Pacific at the frontline of climate change, bolstering resilience of low lying deltas and small islands, and reducing emissions from fast industrializing nations is a good investment.
While this international financing is crucial to have sustained impact, it is critical that government’s themselves revisit their national investments through a climate lens and use their budgets to invest and leverage greater private sector investment. With the support of the United Nations through the Poverty and Environment Initiative (PEI), countries are better placed to do this and better positioned to track their climate investments.
With the support of the PEI Bangladesh has calculated that it spends a billion dollars each year on climate change. Three quarters of this is domestic revenue.
The Government of Nepal has also been tallying its climate related costs, which have reached 10 percent of total government budget and 3 percent of its GDP in 2014. This has led to the adoption of a climate budget code that helps track and hopefully increases funding to climate change actions. It has also led to greater transparency and wider distribution of the country’s climate investments. Nepal’s Ministry of Federal Affairs is now channeling climate funds to local authorities to aid poor women and men on the frontlines of climate change.
Indonesia has developed a budget tagging and scoring system to identify the allocations and expenditures on climate mitigation, and to assess the effectiveness of every dollar invested to achieve emission reduction targets. This is a vital tool as the country looks to meet its target of 26% to 41% reduction in greenhouse gas (GHG) emissions by 2020.
New opportunities for finance brought by the Green Climate Fund, the new Asia Infrastructure Bank and the BRICS Bank should ensure continued and increasing investment in the region’s new climate economies. Private sector investments are also set to increase rapidly. At the Secretary General’s Climate Change Summit held earlier this year, a new finance coalition of governments, business, financial institutions and development banks pledged to mobilize US $200 billion for low-carbon, climate-resilient development in developing countries. Given the current trend, a large part of this will be destined for Asia and the Pacific.
Countries in Asia Pacific are better placed and more ready to receive, absorb, track and ultimately benefit from climate financing, regardless of its source. This is a critical step in their journey towards green economies that deliver immediate benefits in terms of reducing emissions and improving public health, energy efficiency and food security.
Mr. Nicholas Rosellini is UNDP’s Deputy Regional Director for Asia and the Pacific, and Director of the Bangkok Regional Hub
Mr. Kaveh Zahedi is UN Environment’s Regional Director and Representative for Asia and the Pacific