Climate financing threatens aid files: NGOs By Anca Gurzu Published June 30, 2010

View story Email Comments To the Editor

Embassy Photo: Sam Garcia

Environment Minister Jim Prentice.

Just two days before the beginning of the G8 summit in Muskoka, Environment Minister Jim Prentice announced Canada's "fair-share" contribution of $400-million to the Copenhagen-agreed fund to help developing countries adapt to climate change.

Both development and environmental groups welcomed the much-awaited announcement, signaling agreement with the amount pledged. But under increasing speculation that the money will come from an already-committed aid budget, which is also set for a spending freeze, experts now worry the contribution will threaten funding for other development pledges.

Mr. Prentice did not specify what departmental budget Canada's $400 million contribution will come from.

"The decisions on where individual project dollars will flow remain to be announced," Mr. Prentice told reporters at a news conference after the announcement, although confirming that some money will flow through the Canadian International Development Agency. There will be a separate announcement for each new project under that envelope, he explained.

NDP foreign affairs critic Paul Dewar told Embassy he heard from two different sources that the climate change money will be channeled through CIDA. This has been echoed by NGOs as well.

"Our understanding is that this funding is coming from the [Canadian International Development Agency]," said Robert Fox, executive director of Oxfam Canada. "It is not clear to me how they are going to fund this commitment without cutting something else."

After their meeting in Copenhagen last December, developed countries agreed to raise $30 billion from 2010-12 in fast-start climate financing, with a goal of raising $100 billion by 2020. Canada was among the last developed countries to announce its contribution, and the pledge is only for this fiscal year.

Since the Copenhagen Accord calls for money to be new or additional, Mr. Fox's concerns are sparked by the reality that Canada's aid agency budget will be capped at $5 billion per year starting next year. The concerns are re-enforced by Canada's recent pledge of $1.1 billion to the G8 Muskoka Initiative on maternal and child health, which will also be drawn from the aid budget.

"It's very challenging," said Gerry Barr, president and CEO of the Canadian Council for International Co-operation. "The worry is that the government is will start robbing Peter to pay Paul. How can you deal with the major commitment to maternal and child health, the national reconstruction of Haiti, the commitment to adaptation funds, and at the same time freeze your aid budget? How can you do that?"

These thoughts are echoed by many NGOs, which fear Mr. Prentice's announcement may just be a re-allocation of already-pledged funds.

"What we don't know is whether the commitment is not going to come from aid budgets, from tomorrow's schools and wells," said Rob Bailey, Oxfam International spokesperson at a briefing organized by the Climate Action Network Group in Toronto. "We would not want to see climate financing come at the expense of that. We need this to be additional to that."

"So it is very hard for us to welcome this commitment unless we know it really is new money," he added.

Mr. Barr's words were even stronger.

"As NGOs, we don't want to undermine other files and life-saving work," he said. "It's very important for that commitment to be new money, otherwise your solid progress on one worthy goal may results in the undermining and ultimately extinction of support for other very important work."

He also pointed to the timing of the climate financing announcement, which came just a few days before G8 leaders — most of which had already pledged their contributions — made their way up to Muskoka for the first summit.

"It was very directly related to some attempt to reconstruct Canada's reputation as an accountable member of the community," he said, referring to the recent wave of criticism from several international leaders against Canada's weak stance on climate change.

Canada had initially insisted to leave climate change off the summit's agenda, arguing the topic will be better discussed at the Cancun conference in December. However, it became clear the topic would come up, since several European leaders had asked for it to be included.

This is why, Mr. Bailey said, Canada had no choice but to make the climate financing announcement.

"They would have looked like imbeciles and hypocrites had they not had done that," he said.

Besides stressing the need for new – not re-allocated – money for climate financing, NGOs also took the opportunity throughout several news conferences during the G8 and G20 summits to re-enforce the link between development and climate change. The link, the groups say, is not always clear.

"Climate change is one of the biggest threats for the poor people," said Kim Carstensen, from the WWF Global Climate Initiative. "It increases the drama of unusual events such as huge droughts, floods, tropical storms and thereby creates enormous setbacks for the poor. Rich people can normally cope; drought in Canada is by no means as bad as a drought in West Africa, where people have nothing to resist with."

Climate change can break the development cycle and may even threaten the survival of some island states, Mr. Carstensen said.

Storms can lead to having salt water in fresh water reservoirs, which may make islands inhabitable, he explained.

Countries can direct their climate financing contributions through several channels. Three of them are: the Least Developed Countries Fund, a UN fund that required countries to come up with their own climate adaptation plans, but is left with little funding; the Adaptation Fund, under the Kyoto Protocol, which is funded through a levy in emissions trading transactions; and the World Bank-run Climate Investment Fund.

agurzu@embassymag.ca