Why is climate finance a key strategy to soften climate change?
by Alessandra Lazzari (December 2, 2016)
Consequently, it is evident that countries have identified financing as a key strategy. Climate finance is essential to give concrete implementation to environmental and green projects. As a proof of that, states have recognized it as a pivotal element for the implementation phase of agreements even during COP21.
One can say that the industrialized countries’ unsustainable development has mainly caused climate change, and now developing countries are not accepting to cede their chance to grow. Here it is where climate finance becomes pivotal: to overtake this international deadlock and engage developing countries too, developed countries’ commitment needed to go together with financial support. This is probably why, to balance the situation, developed states have more or less commonly agreed to sustain partially the required projects by financing them. In a certain sense, this is to assume their responsibilities and share the burden fairly, but on the other side also to involve a global and effective effort to obtain results.
Impressively, it seems undeniable that the European Union has embraced a leading role in mobilizing climate finance. In the several steps of negotiations and implementation to tackle climate change, the European Union has always been a pro-active and pivotal actor in enhancing and bolstering responsible behavior. From the beginning of the Kyoto Protocol to the success of the negotiation of the Paris Agreement, the European Union has proceeded double-way, both sustaining domestic projects and cooperating with other countries. Indeed, the EU has taken pledges not only to check its member states’ transition to sustainable societies, but also to fund developing or least developed countries to undertake green growth. Actually, to boost cooperation and back especially developing countries, the European Union has focused its policies on scaling up climate finance to help partners in meeting their emissions reduction targets.
Recently, the European Commission has declared in many occasions intent to further decrease the future threats of climate change by advancing a low-carbon growth through the provision of supplementary funding.
The latest climate finance developments are showing off an increased commitment on the European side to bankroll and sustain green practices.
To begin with, to meet the domestic reduction targets of the Paris Agreement of 40% by 2030 to be reached jointly, on November 3, additional assets were promised to support over 140 new plans to be developed domestically in 23 European member states. The new approved package amounts to € 222.7 million for projects related to adaptation, mitigation, climate governance, and information contributing to the LIFE programme, to bolster transition to a sustainable and low-carbon society.
On the cooperative side, it has been established that at least the 20% of the EU budget should be spent on climate action by 2020, proving the importance attributed to funding.
On October 20, at the Beijing summit, the European Union and China celebrated their successful cooperation in the climate field, dating back several years. In 2014, it started an EU funded project to train Chinese carbon market experts basing on the European ETS system, developing seven emissions trading pilot schemes in the Chinese territory. To improve and extend it, China is inaugurating a national carbon trading market system by 2017, for which the EU is providing more than € 10 million to Beijing through the EU's Foreign Partnership Instrument. This collaborative undertaking will be developed for the next three years, and it is outstanding since China is the world largest emitter of greenhouse gases and its engagement is essential.
Then, the European Commission approved a further funding to phase-out hydro fluorocarbons (HFCs) in Latin America and the Caribbean countries, with the provision of € 3 million for the region. This financing is to be added to the € 8 million already provided to Africa and the Asian region for analogous projects. The overall amount can be possibly considered as a favorable effort at least to kick-start operations.
The Commission announced the funding during the week of negotiation in Kigali, in October 2016, where countries reached a global agreement in relation to the HFCs phase-down.
Furthermore, updated official data from the EU Economic and Financial Committee revealed that in 2015, the EU, notwithstanding other budgetary pressure situations (the migration crisis for example), has registered a steady increase by 20% in the funding towards developing countries for climate response, reaching € 17.6 billion. Moreover, the European Fund for Sustainable Development is planning to employ around 20% of its € 44 billion budget for renewable energy and climate change related projects. This demonstrated a serious contribute and a wide resort to financial tools, that will be essential even in the following years to accomplish the $ 100 billion to be supplied per year to developing countries by 2020, according to the Paris Agreement.
To conclude, it must be remembered that the European Union has provided financing during years to several institutions, such as the Green Climate Fund, the Global Climate Change Alliance, and promoted grants to incentivize low-carbon investments.
Undoubtedly, the European Union results, hence, a crucial actor in the global struggle to soften climate change, and its financial contribution is definitely important to enhance positive and actual progress, and to try remaining within 2 degrees of increased temperature above the pre-industrial level. Climate finance is to be retained a key strategy for the EU allowing involving a global action. Anyway, this does not mean that financial provisions are enough considering the threat we incur on.
Alessandra Lazzari is Junior Policy Analyst at Bridging Europe
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