PH can improve climate finance reporting

Photo Credit: seamlessglobal.co

AS has been frequently reported, a key feature of the landmark 2015 Paris Agreement on combating climate change was a pledge by the developed nations that are most responsible for the greenhouse gas (GHG) emissions that are causing it to provide funding for vulnerable nations’ climate adaptation and mitigation needs. This allows countries like the Philippines, which are most at risk but contribute very little GHG emissions, to aim for much larger climate actions than would otherwise be possible with their own resources alone.

However, not only have rich nations yet to meet the $100 billion per year funding target — although they are gradually getting closer to it — what contributions they do make to climate financing are often questionable due to a lack of a uniform set of guidelines about what actually counts as climate financing, and the fact that donor nations themselves are responsible for reporting it. As a recent Reuters special report detailed, this has led to a vast number of foreign-funded projects in different countries that are reported as climate financing and counted as part of the donor countries’ obligations, but clearly have nothing at all to do with climate adaptation or mitigation.

The problem for the Philippines and other countries in similar circumstances is that the dubious, unorganized system could very well cripple climate response objectives because the needed funding is being wasted on irrelevant or counterproductive activities. As we know, about 72 percent of the Philippines’ 75-percent GHG emissions-reduction pledge is “conditional,” meaning that it can only be achieved with outside assistance. This is fair, because the Philippines contributes so little to the global problem but “conditional” in no sense means “optional.” The Philippines needs to reach the goal because the process of pursuing it encompasses developing more secure and sustainable energy, improving disaster resilience, reducing traffic congestion and creating new areas for economic growth. All that is put at risk if the developing countries are not sincerely doing their part, which unfortunately seems to be the case at the moment.

The Reuters story highlighted several examples of ludicrous projects, totaling $2.6 billion, that the donor countries counted as part of their climate financing commitments. “Italy helped a retailer open chocolate and gelato stores across Asia. The US offered a loan for a coastal hotel expansion in Haiti. Belgium backed the film ‘La Tierra Roja,’ a love story set in the Argentine rainforest. And Japan is financing a new coal plant in Bangladesh and an airport expansion in Egypt,” it said.

From our point of view, the entire system is completely backwards. Beneficiary countries, which best understand their climate response needs, should determine what foreign assistance truly applies to those, rather than accepting donors’ definitions. That smacks of colonialism, quite frankly, and it is most unfortunate that the United Nations Framework Convention on Climate Change (UNFCCC) that is ostensibly responsible for overseeing the global effort has not considered the problem.

The Philippines can be a big part of a rational solution to that problem, and perhaps even lead the initiative by example. What that requires is for the government to develop a set of guidelines for defining “climate financing” in this country, detailing what uses of funds (whether sourced from foreign or domestic sources) legitimately address climate adaptation or mitigation needs. Then, funding received, whether in the form of grants, loans, equity investments or other contributions, should be assessed against this framework and regularly reported publicly, as well as to the UNFCCC. The donor countries, of course, will likely continue to follow their own reporting standards, such as they are, but as discrepancies between what recipient countries report and what donor countries claim become more obvious, pressure will be put on them to improve their performance.

Once that begins to happen, the framework developed by the Philippines and its peers can be used as the basis for the badly needed global standard. That is something that should have already been developed in the eight years since the signing of the Paris Agreement, but since it has not been, the Philippines should take the initiative to help create it. Even if that effort is unsuccessful, the country will have at least implemented a framework that more effectively answers its own climate response needs.

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