Sustainability finance should focus on creating low carbon economy

At the international forums and especially during the climate change negotiations climate finance keeps occurring as a bone of contention. It is one of the most intractable issues and threatens to derail a global deal due to be thrashed out and hopefully accepted in Paris in 2015.
We all know that money has the power to cause a lot of happiness as well as heart burns. We have seen it during the negotiations prior to signing of Kyoto Protocol. We also saw a lot of dissensions during its first phase of implementations.
Situation didn’t improve when the second phase was being negotiated. Many players who had taken up mandatory emission reduction commitments backed out and those who remained made it clear that there would be no Protocol beyond the second commitment period ending in 2020.
Since two track negotiations that began as part of the Bali Action Plan, accepted in 2007, finance has become a major and complex issue. The questions like what is the total requirement of funds to deal with climate change, where will the money come from, who will manage it, who will foot the bill, etc have resulted in high pitched rhetoric around the world.
However, a close look at achievements of Kyoto Protocol reveals that the project based approach to provide funds in developing countries under clean development mechanism (CDM) had little impact on the overall carbon emissions of the country where they were implemented. Neither did they help the fund provider country in meeting even a fraction of their emission reduction goals.
In case of HFC reduction programmes in China the data showed that what the companies could have achieved on their own was being funded. The technology for HFC reduction was available and yet local companies took money from international sources to do the same. HFC reduction amounted to a major chunk of CDM projects in the first phase of Kyoto Protocol.
With the kind of misuse it is clear that the money spent on emission reduction produced little impact and so it’s not an efficient way of investing precious resources.
However, as many companies, groups, governments, ministries and a whole lot of bureaucracy at international level has been created around Kyoto Protocol, it has made it difficult for policy planners and negotiators to break their shackles and think of a new way to deal with the problem.
The issue of climate finance is also being discussed on the age old template of providing aid, donations or creating mechanism where help is extended to specific projects and programmes is developing countries.
I think this is again an inefficient way of looking at the global problem. Instead of linking aid, financial help for climate change mitigation or adaptation world leaders, business communities and bureaucracies around the world should plan a whole sale shift to low carbon economy.
The low carbon economy blue print will act as the guiding principle at the national levels to create long, medium and short terms policy frameworks. These frameworks will allow the local governments to create nationwide plans, programmes, schemes and projects to shift to low carbon economies. They will also factor in local capacity to generate funds for these schemes and projects and the technical as well as managerial abilities available at their disposal.
The instruments like, Nationally Appropriate Mitigation Action (NAMA) is a good point to begin with for every nation. These should inspire governments to align their long term development perspectives around the low carbon concepts.
Once every nation starts to plan towards low carbon economy it will also work towards creating capacities in technical, intellectual and financial space to deal with the task ahead. In their coordinated efforts if they would fall short of funds than they can approach international public and private finance.
The foreign fund providers will also be willing to invest if there is a long term stability and clarity in policy framework of a country and the programmes are big enough to ensure economies of scale in terms of their overall impact on emission reductions.
Another action should be taken at the donor’s level. Whatever foreign development assistance, aid and donation programmes are currently being run by the developed countries should be pooled into one Green Climate Fund. The World Bank and International Monetary Fund (IMF) should also rework their agenda and earmark funds for low carbon economy.
Once the private as well as public sector around the world knows that the funds are now linked to low carbon economy, they would start approaching the development and conservation issue in a holistic manner. This way wastage of resources due to duplication and leakage will be plugged from the donor’s end and will make the receiver more efficient.
It would be a win-win situation for both and a welcome relief for those who are standing at the end of the queue in every nation condemned facing the onslaught of climate change.

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About indiadynamic

mediaperson worked for TWI, TVI, Dainik Bhaskar, UTV and Hindustan Times in all the divisions print, TV, radio and internet
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