CFAS July newsletter - Recommended Reading for the Long Term Finance workshops, summer 2013
CFAS July newsletter - Recommended Reading for the Long Term Finance workshops, summer 2013
As with previous newsletters, the following section contains a list of reports, policy briefs and documents that are relevant to the current Climate Finance discussions taking place under the GCF, Standing Committee on Finance, and Adaptation Fund. In this edition, the CFAS team have aggregated a number of papers that relate to the forthcoming Long Term Finance meetings, in particular those on enabling environments for incentivising further action, and the pathway to reaching the USD 100bn annual target by 2020.
In addition to the short summaries of each paper available here, you can also find more detailed summaries on the CFAS webpage, along with context as to why these papers are useful reading material now.
Recommended reading on Enabling environments to incentivise further action
As discussions around mobilizing and scaling up climate finance become more concrete, strengthening enabling environments has become a clear aim and deliverable for the Long-Term Finance work programme in 2013. During the two summer workshops, experts and negotiators will be looking at the barriers, the challenges and the solutions to make sure climate finance is mobilized and disbursed most effectively, as well as incentivizes further climate action. In this context, CFAS recommends the following reading to better understand the rationale behind strengthening enabling environments, the scope and meaning of enabling environments and solutions to incentivize them.
a) OECD (2012): Green growth in developing countries: a summary for policy makers
Authors : Willima Hynes, Shannon Wang
Date: June 2012
The LTF workshop will have to look at all the kinds of enabling conditions needed for green growth, both in developed and developing countries. This paper looks at the different generic components of enabling environments, identifying 6 key conditions for green growth, as well as analysing the role for OECD countries in creating the conducive environments for green growth in developing countries.
b) CPI (2012): Effective green financing: what have we learned so far? Climate Policy Initiative
Authors: Buchner, Heller, Wilkinson
Date: December 2012
Empirical case studies will be extremely useful in developing best practice for LTF in this summer’s meetings, and this paper examines 3 case studies to identify what has worked or not, and what lessons policymakers should draw from them. The paper highlights that public resources are making investments more consistent with low-carbon growth, however more action is needed to overcome real and perceived risks. In other words, there is real need for enabling environments.
c) REN 21 (2013): Renewables 2013 Global Status Report, chapter 4 on Policy landscape
Authors: REN21, 2013
Date: June 2013
The Global Status Report on renewable energies, published regularly by the Renewable Energy Policy Network for the 21st Century (REN21), summarises key facts and figures related to the development of renewable energies across the globe. The work programme on long-term finance also addresses matters such as public policy and financial instruments for the effective deployment of climate finance. The chapter 4 provides a good overview of the employment of quantitative renewable energy targets, issues related to global energy subsidies, power generation policies, heating and cooling policies and transport policies, inter alia. It also addresses linkages between renewable energies and energy efficiency. It can therefore also serve as a basis to consider how the climate finance could support the implementation of these policies, including in the context of the ADP Workstream 2 discussions to scale-up near-term action.
d) WWF & WRI (2013): Meeting Renewable Energy Targets: Global Lessons from the Road to Implementation
Authors: S.Singer, Athena Ballesteros, Sarah Martin, Davida Wood
Date: June 2013
What is it about? This report was produced through a collaboration of WWF and World Resources Institute (WRI), and elaborates on the efforts to meet renewable energy targets in China, Morocco, India, Spain, South Africa, Philippines and Germany. It elaborates different cases in different countries with political will to set themselves renewable energy targets through the legal framework or their national strategy/plan. The issue of the enabling environment is not only about the policies; there are other country-level problems that are difficult to identify from outside the country. These domestic problems need to be quickly identified and be solved, in order to meet the renewable targets that will lead to the urgently needed GHG emissions reduction. These specific cases are valuable to learn lessons from, in order to mobilize both climate finance and political will more effectively.
Authors: GLOBE International, 2013
Date: January 2013
What is it about? GLOBE International is an association of legislators from numerous countries around the world. This study provides an overview of specifically climate-related legislation in 33 countries in various economic and development situations, as well as reviewing the progress of legislation compared to previous reports, showing the wealth of policy innovations for both mitigation and adaptation. In the context of international climate finance discussion, it therefore also provides a starting point to consider how the employment of international climate finance could foster the implementation of these policies, and/or raise their ambition.
f) WRI (2013): Mobilizing climate investment – energy efficiency in Thailand
Authors: C.Polycarp, L.Brown, X.Fu-Bertaux.
Date: April 2013
What is it about? In an annex to the report Mobilizing Climate Investment: the role of international climate finance in creating readiness for scaled-up low-carbon energy, WRI presents two detailed case studies- one on the enabling environment for geothermal power installations in Indonesia and one on the enabling environment created in Thailand to maximise energy efficiency in the 1990s. The upcoming expert workshop for the Long-Term Finance Work Programme will be looking at how to create the enabling environments to maximise the effectiveness of climate finance within recipient countries. This case study gives an interesting overview of the different steps taken in Thailand to reach its energy saving objectives. This illustrates very concretely and positively the role of enabling environments in increasing the effectiveness of climate policy and investments – both internationally and domestically.
Author: Yannick Glemarec
Date: 2011
What is it about? Over the past few years, policy-makers have developed regulatory and market-based instruments to help investments grow from 22 billion in 2002 to 220 billion in 2010, however a lot more needs to be done to shift the 178 trillion in financial assets. In this guidebook, the author develops a 4-step framework to this end, the final step involves determining the appropriate policy mix and select financing options to create an enabling environment a mix of public, market and private finance. The author analyses the importance of fair access to climate finance among developing countries, he describes the current climate finance landscape (channels, sources and stakeholders, and looks at options to improve the policy environment and catalyse climate capital. Both the step-by-step analysis and case studies in this paper are useful resources in the context of LTF discussions, making the case for sequencing and blending sources and instruments of finance.
h) South Centre (2012): Climate Change, Technology And Intellectual Property Rights: Context And Recent Negotiations
Author: Martin Khor, South Centre
Date: June 2012
The issue of Intellectual Property Rights (IPR) is a very controversial one, meaning it is difficult to have a substantive debate about it in the UNFCCC context. However, it plays an important role for questions related to the dissemination of climate-friendly technologies and there needs to be taken into account in general. This research paper provides background analysis of the role of the intellectual property rights in the context of climate change and technology, discussing contexts and recent negotiations in Technology Transfer, Sustainable Development and Climate Change.
Recommended reading on the pathway to the 100 billion dollar target in 2020
In Copenhagen, developed country parties committed to mobilize 100 billion dollars a year by 2020. In September 2013, developed countries are invited to submit their “strategies and approaches for scaling up international climate finance” to the UNFCCC. This summer, the Long Term Finance workshops will also be looking at pathways for climate finance. In this context, CFAS recommends the following reading on different sources of finance that could help scale up international climate finance.
Authors: Anja Esch (Germanwatch) with contributions from Ilona Jedrasik (Polish Climate Coalition), Alix Mazounie and Celia Gautier (RAC France), Petr Holub (Chance for Buildings), Istvan Bart (Hungarian Energy Efficiency Institute (MEHI)), Jiri Jerabek (Greenpeace Central Eastern Europe), Niklas Kaskeala (Kepa Finland)
Date: Mai 2013
Using EU ETS auctioning revenues for international climate finance could be one potential source of finance for all those countries where an Emission Trading Scheme exists and certificates are being sold or auctioned off. Further, in different contexts – also outside the EU ETS – the concept of earmarking revenues for climate action comes into discussion. This paper describes whether and if so in how far seven EU member states have directly or politically (using the equivalent value) earmarked EU ETS auctioning revenues for climate action, highlighting that the current low certificate prices in the EU ETS pose some challenges for using the EU ETS as a predictable source for international climate finance. It goes on to suggest several changes that should be made to repair the EU ETS and to therewith “unlock the twin potential” of reducing emissions and raising revenues with the same instrument.
b) Oxfam (2010): Climate finance post-Copenhagen: the $100 bn question
Author: Tim Gore
Date: May 2010
What is it about? In May 2010, following the Copenhagen Summit, Oxfam wrote a short discussion paper on how to solve the 100 billion dollar question, and which pathways would help reach the 2020 target. It looks at the role for public and private finance, loans and grants. The paper identifies a number of international sources of public finance, and comes to the conclusion that theoretically, new international sources of finance could raise up to 200 billion dollars each year. These options could feed into the discussion on how to reach the 100 billion target by 2020.
Authors: World Bank Group, in close partnership with the IMF, the OECD and the RDBs.
Date: October 6, 2011
What is it about? This report was prepared ahead of the G20 summit in Cannes in 2011, upon a request by G20 finance Ministers. It builds upon Ban Ki Moon’s high-level panel “AGF report”, published in 2010, on potential new sources of climate finance. The report namely looks at sources of finance that could also contribute to reduce global C02 emissions. In the context of current Climate Finance discussions, this report can
help inform negotiations under the UNFCCC on how to scale-up the mobilisation of public funds (incl. from innovative source). It is particularly relevant to discussions under the ADP on pre-2020 ambition as most of the instruments proposed in the report help reduce GHG emissions as well as provide options to fund ambitious mitigation action in both developed and developing countries.