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IN FOCUS
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Scaling up the mobilization of long-term climate finance for climate
change action
A conversation with the Co-Chairs of
the work programme on long-term finance
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The first workshop on
long-term finance took place in Bonn over three days in July, and facilitated technical and
analytical discussions in a frank, transparent setting. The world took part: around 140
people participated in Bonn, more than 300 people watched the live webcast, around 1,500
comments and questions were sent via Twitter, leading to a staggering 9 million Twitter
impressions, and 32,000 people were reached via the UNFCCC’s Facebook and dedicated event
pages.
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The workshop was the first of two that are part of the work programme on long-term
finance, which governments decided to embark on at the 17th Conference of the Parties in Durban
last year. The broad objectives of the work programme are to make progress on the issue and to
boost efforts to scale up mobilization of climate change finance after 2012, when the period of
fast-start financing for climate change action ends. Its aims are to analyse options for the
mobilisation of resources from a wide variety of sources, public and private, bilateral and
multilateral, including alternative sources and relevant analytical work on climate-related financing
needs of developing countries, taking into account lessons learned from fast-start finance.
Tasked with the responsibility of running the work programme are co-Chairs Mr. Zaheer Fakir (South Africa) and Mr. Georg Børsting
(Norway), who are due to report to the Conference of the Parties at its 18th session in Doha
this November. Both were instrumental in the negotiations that led to decisions on long-term
finance and the formation of the institutions set up to deliver it.
In Focus caught up with the co-Chairs when they were in town to facilitate the first
workshop. In this interview, the co-Chairs discuss their views, impressions and intentions with
respect to the work programme and long-term finance.
What do you think about the role of the work
programme in the greater context of what governments have agreed they need to do in relation to
long-term finance?
Zaheer: In the negotiations, there’s not really room to
accommodate the analytical and technical discussions. The intention of the work programme was to
provide an opportunity for making progress on contributions to scaling up of long-term finance and
mobilisation of finance. So, the approach that we as co-Chairs have taken was to ask, how can you
use a platform that would stimulate political discussions to be able to make that contribution?
Georg: It’s been important for us to bring in expertise,
civil societies, observers, to the process and discussion, which can help heighten the general
understanding among Parties on issues that are really complex. They are politically difficult,
but they’re also complex and there’s a huge need for greater understanding. And those
are some of the things that have really come out of the workshop— analytical discussions, and the
identification of areas where there’s a need for further work to help the political process along
on the issue of climate finance.
Which brings us to the question, what do you think
is the importance of the workshops in the greater context of the long-term finance work
programme?
Zaheer: I have a radical answer… I would see it as
a kind of “therapy”. In the negotiations, it becomes so very intense and complex,
dealing with a lot of political issues and so on, and you have a whole range of issues that kind of
boils up inside. The workshop is a kind of outlet for you to release those sorts of issues and an
opportunity to understand the points of reference from which your colleagues are coming on those
issues. So, maybe it’s like therapy— you need to first get everything out in the open
before you can deal with the issues. If you want to have a meaningful discussion around long-term
finance, it is important for us to have done this in order to move to the next stage. For
example, it would have been rather difficult for us to have gone directly into a discussion focusing on
detail had we not explored the issue of developing country climate-related financing needs. We
want to get people to talk, but we also wanted to get people to transcend from the political to the
more analytical. I suppose this first workshop is that bridge, to take you into that second
phase.
One of the hot issues with respect to long-term finance for climate
change is on the role and involvement of the private sector. How involved has the private sector
been in the discussions on long-term finance?
Zaheer: The presentations by experts within the banking sector
showed that the extent to which the private sector was already involved in dealing with climate action
was glaring, be it in the form of renewables, or all forms of investment in the climate sector.
So clearly, there is a lot of activity taking place in the private domain in terms of climate financing
of various kinds of initiative. But, I think the important challenge is: how do we activate
greater private sector involvement in the developing world, among the private sector in the developing
world? So there clearly is a lot of activity, but how do you get that activity in developing
countries to gain traction?
How can— and, indeed, should— the
private sector be involved in discussions?
Georg: It is important to get private sector knowledge and
expertise in order to better understand from the private sector’s point of view what’s
needed to enhance the environment for climate finance investments. I think everyone realizes that
the private sector is, of course, going after returns on investments. That’s how the
private sector works. But it is important that we don’t have a split world where you have
the public sector on one side and the private sector on the other side. There needs to be proper
regulations in place; and sometimes we might need public sector investments in order to leverage
private sector investments. The understanding of that dynamic and what’s needed, you
can’t really get that without engaging the private sector in that discussion.
As for the financial services sector in general,
and pension funds in particular— how can or should they be involved?
Zaheer: The question, at the end of the day, is “what are
the enabling conditions to activate the pension fund to want to make investments in climate
finance?” And then, one would say, well, it comes back to what are the conditions you’re
dealing with. It’s not a question of whether it’s a source or not, but one would need
to look at it in totality. You would need to understand the nature of pension funds. They
are more risk averse, so if they’re looking into investing in clean energy, they’re
obviously going to go into an area where there is a stable political and policy environment, where
there is a clear energy policy that ensures that their investment is secure. But they also tend
to be more socially conscious. At the end of the day, it’s about understanding the
motivations that determine how each instrument uses or makes their investments, and then deciding on
the right mix of instruments for your sources of finance. It’s important that people in the
room get an understanding of how these instruments operate and then make their decisions.
So, to broaden the question: we’re at an
interesting moment in time, because around 1,500 companies in the U.S. and Europe that are rated by
Moody’s are sitting on two trillion US dollars of gross cash. Meanwhile, governments in
Europe are struggling with finances. How can we get these companies interested and involved in
long-term climate finance?
Georg: Again, it’s about creating an enabling environment
and creating attractive environments for investments, and that’s the only way you can really
attract this type of investments. I would think, the situation in Europe now should actually open
up some doors, not least for developing countries who are able to make themselves attractive.
One of your goals from the outset has been to make
this work programme and the workshops as inclusive, open and transparent as possible. Are you
satisfied with the engagement of the various stakeholders, or would you wish for certain actors to get
more involved or to receive more inputs on certain areas?
Zaheer: I was pleasantly surprised at the number of people
following our discussions on the webcast, similarly, by Twitter and Facebook. I was also very
pleasantly surprised at the number of people who managed the trek to the workshop!
Georg: I was really pleased with the attention that the workshop
and the work programme received from way beyond just the Parties. I think it’s been
reflected in the interest we received by webcast and social media. I would certainly like to
learn from how we’ve done this in order to be as inclusive as possible, and also improve on it,
if possible. That also goes for participation in the meeting itself, which I think has been quite
good. In terms of where we would like to see more participation in the rest of the work
programme, it might be from the private sector side. We have a few representatives here. I
would certainly like to see more, not only as panelists and resource persons, but also as participants
in the discussions.
Zaheer: May I be controversial? My concern is not with the
lack of stakeholders. My question is: do we have the right mix of stakeholders? For
example, I would like to see more involvement of NGOs who are implementers on the ground. We
really have a lack of NGOs and stakeholders that are actually doing physical projects on the
ground. They are at the coalface of delivery, of having to deal with finance and the challenges
it comes with. They would have the experience to know what the capacity challenges actually are,
whether there are burdensome reporting requirements or not, for example. I’d really love to
get feedback from them But I don’t know how you get more of those people into the room.
You have to report to the COP in Doha in
December. What do you hope to tell them? What do you hope to have achieved by
then?
Zaheer: If you look at the decision, the report is just one
element of our process. The aim of the work programme is to make a contribution to the on-going
efforts to mobilise climate finance from multiple sources, from 2012. At the end of the day, the
success we will be measured on is, have we made a contribution or not? That’s what we are
focused on: making a contribution. The workshop in itself is making a contribution, merely
by expanding people’s knowledge on these different options. And that is going to have a ripple
effect. It may be outside the UNFCCC process, it may be something that somebody takes back home, and we
may never hear about it. But it’s already making that contribution. I suppose, we never
stepped in here with any aspirations or illusions that we were going to do something that was going to
radically change the landscape, in that sense. We were going to be bold and
ambitious…
Georg (smiling): We ARE…
Zaheer: We ARE going to be bold and ambitious in the sense that
we are going to produce a report that would not pull any punches, so to speak. Ultimately, at the
end of the day, we’re doing the report based on how we saw the workshop and what we’ve
heard and seen. It would mirror the approach, effort and energy we’ve put into the
workshops.
Georg: The work programme has a clearly defined aim of
contributing to on-going efforts to scale up the mobilization of climate change finance after 2012. I
think, as co-Chairs, we want to run a work programme in a way that we can say that we’ve achieved
that aim. I think the report that we’ll be writing is part of this effort. So, while it’s
up to Parties how they want to welcome or consider the report, we hope it will make a good
contribution, and that it can help facilitate discussions among Parties when they receive it.
About the Co-Chairs
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Mr. Zaheer Fakir is a senior official of the Department of Environmental Affairs in South
Africa. He is an active member of the Adaptation Fund Board and, until recently, was a member
of the Council of the Global Environment Facility. In addition, he successfully facilitated the
negotiations in Durban that led to the launching of the Green Climate Fund.
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Mr. Georg Børsting is the Policy Director for Climate Change of the Ministry of Foreign
Affairs in Norway. Mr. Børsting has facilitated various negotiations under the Climate
Convention and has had chair positions in the Joint Implementation Supervisory Committee and
the Executive Board of the Clean Development Mechanism. He led the negotiations at COP17 that
led to adoption of the decisions on Standing Committee and long-term finance work programme.
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