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Donor harmonisation

Tackling the trust deficit

by Bernard Petit
International programmes on adaptation to climate change must be coordinated according to the principles of aid effectiveness as were spelled out in the Paris Declaration and the Accra Agenda for Action. Global warming is too urgent an issue to waste time and resources. [ By Bernard Petit ]

The poorest countries in the world are not responsible for the effects of climate change, but they will be the most affected. Many of these countries are fighting vigorously to reach the Millennium Development Goals. But it is clear that these efforts will be useless if the developed world and the emerging economies – which are to a large extent responsible for the accumulation of greenhouse gas in the atmosphere – do not ensure firm solidarity to help the poor countries to adapt to climate change.

Those nations that are better of must act. It is their political and moral responsibility. We need to restore the confidence between the North and the South. We are clearly facing a trust deficit.

To overcome this deficit, action has to be collective. And as the risks of climate change are increasingly becoming acutely felt reality, action must also be immediate.

Indeed, the inertia of the atmospheric system is such that, even if humankind stopped emitting greenhouse gases tomorrow, climate change would continue for several decades, affecting hardest the poorest and most vulnerable regions of the planet. Climate change undermines growth and hurts the poor.

It is therefore imperative to take the necessary adaptation measures. They are crucial for development, and need to be implemented now. The question, of course, is how to do so. In this respect, three thoughts are worth exploring. They concern
– coherent action in the countries most affected by global warming,
– the recent propensity to establish vertical funds and
– the need for European leadership.

Finance matters

Several respectable institutions have estimated the costs of adapting to global warming. Their figures range from at least $ 10 billion up to $ 100 billion per year. Such assessments are worrisome. They are likely to raise expectations that the international community will not be able to satisfy. Moreover, it is obvious that the diverging estimates are based on quite different definitions of what exactly “adaptation” is about.

Obviously, adaptation so far remains a nebulous concept with blurred rather than precise content. To some extent, that reflects the different needs of different places. It is one thing to increase the level of bitumen when you build a road to make it more resilient to floods, and quite another, much more expensive thing to build dikes to protect a country from a rising sea level.

In the first case, we are looking at an issue that fits in with conventional agenda of official development assistance. The second case, however, goes far beyond that scope.

The Least Developed Countries (LDCs) have drafted national adaptation programmes of actions (NAPAs). This was a good start. Next, the NAPAs must be reviewed to ensure high quality and effective implementation. The objective is to mainstream systematically all action on climate change into all policies the countries concerned are already pursuing. It would simply not make sense to have a long list of individual projects to be managed by the Ministry of Environment, without that action being linked to that of other line ministries in any given country.

A call to caution

There is a tendency today in the world to think that the best response to any new problem is the creation of a new vertical fund. Some of these funds are, of course, really quite valuable, for instance the Global Fund to fight AIDS, Malaria and Tuberculosis.

But one has to assess issues case by case. We should think twice or even three times before accepting the current proliferation of all manner of funds on climate change. These funds share common objectives, but their multitude renders the international architecture disorganised, leading to what one might call the “balkanisation of development assistance”. Moreover, they tend to undermine the ownership by the developing countries of their development strategies.

A lot of resources are necessary for adaptation. It is essential to use them according to the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action. Natinal ownership, alignment and donor harmonisation are core aspects of aid effectiveness.

Ownership: the countries concerned must define their adaptation strategies. It is often said that they must be “in the driver’s seat”, though, if one is precise about metaphors, it must be added that many cars in question have neither steering wheels nor pedals, and are under remote control from Washington, New York or Brussels. We need to make ownership real.

Alignment: if we are serious about ownership, donors must align their support to the strategies of the countries concerned by using those countries institutions and procedures. One of the best ways of doing so is to provide assistance through budget support or basket financing for sector-wide approaches (SWAPs), with several donors pooling funds for the common cause.

Harmonisation: climate change has become a trendy topic. Many donors want to show that they are doing something. But we cannot afford to repeat old mistakes of development assistance in the urgent new matter of adapting to climate change. Just consider, for instance, the situation in Mali, where 26 donors are active in the rural development sector alone. In Kenya, 20 donors are buying drugs using 13 different procurement agencies. Such arrangements do not make sense. They area nightmares for the partner countries. It is therefore not an option to implement any new adaptation programmes outside the multilateral aid-effectiveness architecture.

A role for Europe

Europe must show ambition and leadership in the fight against climate change. The European Union, collectively, took decisions without precedent to reduce its emissions by 20 % in 2020 in relation to the level of 1990. But at the same time, the EU needed to ensure a firm solidarity towards the most vulnerable countries to help them to face the effects of climate change. This is why the member states of the EU adopted what is called “the global climate change alliance”.

The purpose is twofold, namely to
– create a platform for political dialogue aiming to promote a shared vision between the EU and the most vulnerable countries on the post 2012 regime, and
– to support financially the measures necessary to help these countries to cope with climate change.

No meaningful agreement on what to do in the post-Kyoto-Protocol will be possible at the Climate Summit in Copenhagen next year unless we ensure that the poorest and most vulnerable countries will command a level of resources which is not a mere recycling of ODA already promised.

We need to find innovative sources of finance. This is the reason why the Commission launched the idea of a global financing mechanism, based on the revenues of the carbon market.

The idea is to anticipate part of the revenues coming from the auctioning of emission trading schemes in Europe. In tangible terms, the proposal consists in raising funds from the capital market by issuing bonds based on carbon markets. These bonds will be paid back by using revenues from emissions-rights auctions. The money thus generated would not flow into any new fund, but would serve to finance in an adequate and predictable manner existing initiatives.

Other ideas are also circulating. The problem now is to move from rhetoric to action. We can contribute to solve this problem. And since we can, we must.