Right second time: Australia thaws on the Green Climate Fund

Here’s a large understatement: it cannot have been easy for the government to reverse its decision on participation in the UN Green Climate Fund, as just announced at the UN climate change conference in Lima, Peru. Australia will, after all, make a proportionate contribution to the climate fund: A$200 million over four years. At about US$165 million, this amounts to around 1.7 per cent of the fund’s initial US$10 billion funding target. That is about where we would normally stand in a multilateral fund, even if some estimates of Australia’s fair share in this particular fund put it somewhat higher, at around 2-3 per cent.

One can only wonder about the internal party politics, but what matters is the outcome, not the process. The contribution should be welcomed without reservation as an appropriate one and a signal that Australia’s aid program will, after all, continue to play a significant role in supporting international action on climate change. Together with an earlier and weaker signal, namely Australia’s contribution to the most recent replenishment of the Global Environment Facility, Australia’s contribution to the climate fund also indicates a firming (if still selective) commitment to multilateralism in the field of environmental protection and management.

The government has not restricted Australia’s climate fund contribution to the funding of adaptation programs, as we thought it might have to do in order to preserve face. The Prime Minister, and less clearly Julie Bishop’s press release, has indicated that the funding will be ‘strictly invested in practical projects in our region’, which suggests some geographical earmarking. That might not be possible in practice but, even if the government does insist on such earmarking as a condition of its contribution, as it apparently did in its contribution to the Global Innovation Fund, the restriction is hardly very tight and would not overly constrain flexibility in the overall management of the fund’s resources.

The funding will of course come from Australia’s aid budget. Some believe it should come from elsewhere, but most donors are drawing their climate fund contributions from their aid budgets and there are good grounds for doing so. Australia has until recently found space within its A$5 billion aid budget for annual spending of around A$200 million on climate change adaptation and mitigation programs, so it can continue to do so without detriment to other development programs.

Robin Davies

Robin Davies is the Associate Director of the Development Policy Centre and an Honorary Professor at the Crawford School of Public Policy. He heads our program of research into global development policy. He was previously a member of AusAID’s senior executive service for a decade, both in Australia and overseas. Most recently he headed AusAID’s international programs and partnerships division. His policy and research interests include multilateral cooperation for development, development and climate change financing models and public-private partnerships for development. He is currently based in Geneva.

2 Comments

  • A welcome turnaround. But I am not sure what the “good grounds” for drawing climate funds from aid budgets are. Given the long way that many Pacific Islands are from establishing basic systems of service delivery and management one would have to be pretty sure that adequate aid funds were still going towards that before any excess “space” is diverted to climate projects – unless of course recent evaluations showed that these were also securing such basic systems. What do you think with regards to the grounds for drawing climate funds from aid budgets?

    • This is quite a large topic, so please forgive the smallness of this reply.

      First, aid budgets have long been used to meet various emerging global challenges, such as the spread of HIV/AIDS and other communicable diseases. Climate change mitigation is one more such challenge. Provided the benefits of spending aid money on such things are primarily in favour of developing countries, people in most cases do not quibble about the fact that the benefits extend to developed countries.

      Second, adaptation programs deliver multiple development benefits, so it is difficult in both theory and practice to separate them from ordinary development investments.

      Third, and most importantly, adherence to the ‘new and additional’ doctrine, no matter how sacred it has become in the climate negotiations, just leads to semantic gaming. Almost all international climate change assistance provided to date has been presented as new and additional in one or another sense, and almost all that assistance has come from aid budgets.

      The intent of the ‘new and additional’ requirement is obviously to avoid having climate change spending completely swamp spending on pre-existing problems. At this stage, given past and pledged levels of financing, swamping is no great risk. As for the future, additional commitments would best be reflected in bigger aid budgets.

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