The workshop was opened by Leo Peskett from ODI and James Mackie from the European Centre for Development Policy Management (ECDPM).
Leo Peskett outlined the background of the EDC2020 project (which is being led by the European Association of Development Institutes (EADI)) and its first working paper and introduced the three main objectives of the workshop:
1. To gain insights into two key challenges that are prominent in the climate change and development debate (as discussed in the two substantive sessions).
2. To improve understanding of different perspectives being taken in overcoming these challenges
3. To help shape further dialogue and research over the next two years
James Mackie, from the ECDPM, gave his perspective on the future challenges of European development cooperation. He argued for more and better aid, and that the EU (Member States plus the European Commission) should take a leadership role. He estimated that the EU currently provides 55% of global ODA and 64% of funding to the UN. This raises the question of what EU citizens should expect from such investments. In addition, questions of EU enlargement and differences between MSs in relation to development cooperation are key challenges. EU institutional change, with new Commissioners and forthcoming elections, set a new opportunity for change. He concluded by outlining current debates on EU development cooperation, including the division of labour and complementary of working in-country; and aid architecture and proliferation of funds.
The first session of the day: the climate finance challenge: what role for Europe?, was chaired by Imme Scholz, from DIE, and debated by Andrew Hingham of the Energy Research Centre of the Netherlands, Marco Tulio Cabral from the Brazilian Mission to the EU, Sebastian Wienges from Germany’s International Climate Initiative and Neil Bird from ODI.
Andrew Hingham started by outlining the importance of finance and technology in a post-2012 climate change agreement. It is widely accepted that there will be no agreement in Copenhagen if sufficient finance is not provided. He demonstrated that the financial mechanisms of the UNFCCC are very small in relation to need, and that 90% of the current finance is outside of the convention. Growth of venture capital and private equity finance are required, but it is not clear how to stimulate such funding. Part of the answer will lie with the public sector leveraging private investments. A complex, multi-layered response will be required, which raises significant coordination challenges.
Marco Túlio Scarpelli Cabral reinforced the central role that the EU should play in terms of climate finance. The EU is the largest economic block in the world; the biggest provider of ODA; has the largest organized carbon market; and is an actor seriously committed to addressing climate change. At the same time, the EU is the third largest GHG emitter; ranks first or second in terms of historical contributions; and has one of the world’s largest per capita energy consumption levels.
Sebastian Wienges described the German International Climate Initiative. This innovative financing mechanism is funded by a percentage of auctioned emissions allowances from the EU Emissions Trading Scheme in support of national and international actions. He stressed the small size of the mechanism compared to the climate finance gap: the volume is only EUR 120 million, which is not enough to solve the problem. The ICI wants to use the money to mobilize private funds and to contribute to the development of new solutions.
Neil Bird outlined three key questions for Europe. First, the mechanism of providing finance (and technology) to support developing countries is one of the most prominent issues in the climate change debate. Many options are being tabled, including traditional public and private sector investment and more innovative approaches such as levies and market mechanisms. Second, the balance between adaptation finance and paying for international mitigation efforts that will be based in developing countries is not yet clear. And third, the relationship between the financial flows associated with official development assistance and climate finance has yet to be clarified.
The second session; EC-Member State relationships: coordination, complementarity and coherence of EU development cooperation on climate change was chaired by Merylyn Hedger from IDS and debated by Walter Kennes from DG Development, Johan Schaar from Sweden’s Commission on Climate Change and Development, and Helena Princová, from the Slovakian environment ministry.
Walter Kennes provided an overview of the European Global Climate Change Alliance (GCCA), an EC initiative that followed on from the EU Climate Action Plan. The GCCA aims to coordinate a pan-European response to climate change among the EU Member States. Much of the focus of the EC is directed at the most vulnerable countries. Although mitigation is important, especially with regard to renewable energies, a considerable amount of the EC’s attention is directed at adaptation.
Johan Schaar, spoke to themes from the soon-to-be-published Swedish Commission on Climate Change and Development. The Swedish government launched the Commission in 2007 to examine issues of climate change adaptation and risk reduction. Climate change will be a priority for the Swedish presidency of the EU that starts in July. Johan stressed the importance of coordination and coherence within the EU. He also gave an overview of the situation in fragile states. Such countries should be treated separately, as they do not fit in with present country groupings.
Helena Princová, from the Slovakian environment ministry, was the last presenter of the day. Slovakia moved from being an aid recipient country to a donor country in 2003, with the creation of the Slovak Agency for International Development Cooperation (SlovakAid). There had been positive outputs from cooperation through partnerships with the EC. The Slovakian case study shows the need for cooperation with other EU MSs in scaling-up resources and for the efficient and targeted support of mitigation and adaptation activities in developing countries.
A fruitful discussion followed the two sessions. Issues debated included:
- Recipient country ownership and aid effectiveness agenda: Importance of using NAPAs and NAMAs for enhanced national ownership as well as coordination at country level; and the need for greater transparency, ownership and accountability as required by the Paris declaration on aid effectiveness.
- EU member states and the ‘3Cs’: European MSs have their own constituencies and it is proving difficult to find a solution to the coordination issue. Member States are presently not rewarded for collaboration. Agencies should use the same tools, methodologies, and use a more structured approach to strengthen coordination.
- ODA and additionality of climate financing mechanisms: It is difficult to talk about additionality when countries have not yet achieved the ODA target of 0.7% of GNI.
- Mainstreaming climate change into the development agenda: Climate change has yet to receive much attention in the development agenda. More attention is urgently required.
- Low carbon development: Developing countries need to leapfrog over existing technologies and move to a new era of energy production and use. There is an opportunity to develop in a different way through low carbon growth strategies.
- Fragile states: Implementation of climate change policies in states where no institutional capacity exists is deeply problematic and hence regional institutions are important. The notion of climate refugees will soon become a significant international concern.
Two key challenges face European countries in their efforts to support developing countries respond to climate change. First, is the issue of how to raise and provide the necessary finance for such actions; and second, how to ensure coordination, complementarity and coherence between different Member States’ efforts and different department, i.e. environment and development. Overcoming these interlinked issues is crucial to laying the foundations for a future climate change regime that is effective and sustainable in the long run. It is part of a series of activities on this theme and the outcomes will help to shape further dialogue and research on these issues over the next two years.
This workshop will focus on these issues within the context of the European development co-operation and climate change policy processes.