New finance for climate change and the environment
The world has moved beyond simple recognition that climate change and environmental degradation pose significant risks to humanity and the planet?s ecosystems. Pledges of tens of billions of dollars in new financial commitments are to be delivered through just a dozen or so new funding mechanisms as virtually all actors in society seek to mitigate these risks and anticipate coming changes in society and the environment.
This quickly changing institutional landscape has taken form over the past year and it has become apparent that, unlike other aspects of sustainable development financial transfers, the new funds are not articulated in an overarching strategic framework. Nor are the funds subject to an agreed set of principles regarding effectiveness and efficiency between the global North and South. For example, there is no uniform call that the disbursed funds must be part of and integrated into an overall development strategy of participating countries. Respect for the Aid Effectiveness Principles requiring country ownership, harmonization of donor activities, mutual accountability of all partners, among others, have not been established as foundational principles of the funds. And methods to reduce transaction costs for recipients, donor dialogue and improve in-country effectiveness have not been articulated.
It is hard to escape the perspective that, in the rush to do good, the governments, and in particular donor governments, have risked overlooking many of the hard learned lessons which have given rise to the best practices that have been adopted for other development and environment areas. This is profoundly troubling. The environment is in dire need of an overarching strategy framework to help guide, prioritize and harmonize the various mechanisms for funding environment and climate change and to ensure coherence with other dimensions of sustainable development. At the very time when the international community needs to bring together the disparate elements, institutions, conventions and agreements in the process of strategy formulation, donor government seem to have opted for disjointed approach that encourages “balkanization” of the global response, much to the detriment of effectiveness and efficiency.
WWF and the Böll Foundation strongly embrace the provision of new financial resources to address the urgent challenges of climate change and environmental degradation. By commissioning this paper, New Finance for Climate Change and Environment in the Developing World, hopes to further extend the benefits and strengthen the positive impact of those new commitments in coming years. It is hoped that the research will broaden public understanding of the more than one dozen new funds and their interplay with existing financial mechanisms. Together, it is also planned to sponsor a number of public seminars and consultations in both northern and southern capitals to encourage active involvement of stakeholders and concerned parties in shaping the final institutional architecture for environment finance.