ByBEN KRITZ, Manila Times, 2 Jan 2021
Have you noticed how much development in climate change mitigation and adaptation the Philippines, considered one of the most environmentally at-risk countries in the world, has been able to achieve, thanks to funding from developed countries?
No? Well, neither did CARE International, or more properly, the global nongovernmental organization’s (NGO) member offices in Denmark and The Netherlands, so they decided to do a bit of investigating with the help of local partners in six particularly climate-vulnerable countries: Ghana, Uganda and Ethiopia in Africa; and Nepal, Vietnam and the Philippines in Asia.
What they discovered was that, in spite of developed economies’ grandiose claims of large-scale financial support for climate mitigation, about half of the funding actually had nothing to do with climate change adaptation. This obviously has some serious negative implications, both for the subject countries and the larger global policy efforts toward fighting climate change.
This issue first came to my attention about a week ago with the publication of CARE’s findings, which are detailed in one overall report, as well as in separate reports for each of the countries studied. My initial reaction, “This is alarming, and I should write an article about it,” quickly turned into “This is going to keep me busy for at least a couple of months,” so for today I’ll simply try to summarize the key points of what is a very complex and potentially explosive scandal.
The climate finance grand scheme
First, a bit of background about the type of financing involved. At the international climate change conference in Copenhagen, Denmark in 2009 — the long name of the meeting was the “15th session of the Conference of Parties [COP15] to the United Nations Framework Convention on Climate Change [UNFCCC]” — the world’s developed economies, primarily members of the Organization for Economic Cooperation and Development (OECD), pledged to contribute heavily to climate change mitigation. From an initial $30 billion for 2010 to 2012, the goal was to gradually increase spending to $100 billion a year by 2020, with at least half of that being spent for the benefit of the world’s most vulnerable countries and populations. The total climate financing, regardless of where it was directed, was supposed to be equally divided between climate mitigation — for example, investing in renewable energy or better waste management systems — and climate adaptation, which includes flood control systems and relocating vulnerable populations. To keep track of progress toward the goal, the countries report their climate adaptation spending to the UNFCCC and the OECD.
As the agreement is not binding, it comes as no real surprise that actual contributions have fallen far short of the lofty funding target. This naturally provoked intense scrutiny from a wide variety of environmental researchers, policy analysts and activists; the recent study produced under the aegis of CARE International is one of the most thorough and focused analyses to be produced since the climate financing aspiration was first announced in 2009.
CARE and the climate finance study
CARE International is one of the world’s oldest international NGOs, and chiefly concerns itself with poverty and inequality reduction efforts. Climate adaptation naturally fits in its wheelhouse, and so CARE has been monitoring the progress of climate mitigation financing from the very beginning. CARE — it originally stands for “Cooperative for American Remittances to Europe” — was founded in the US in 1945 in the aftermath of World War 2, and its first major activity was soliciting donations for packages of relief goods to be sent on behalf of American individuals and families to people in war-torn Europe. This was the origin of the now-familiar generic term “care package.”
The organization now is a decentralized group of 14 national member offices, with headquarter offices in Geneva, Brussels and New York, in close proximity to UN and European Union officialdom. When CARE evolved from being a US-based organization to a legitimately international one beginning in the 1980s, the meaning of its acronymous name was changed to “Cooperative for Assistance and Relief Everywhere.”
The recently published country-specific assessment overseen by CARE Denmark and CARE Netherlands is just a part of the group’s larger effort to monitor climate mitigation actions, and focused specifically on 112 separate projects in the aforementioned six countries between 2013 and 2017. The goal of the analysis, as explained by CARE, was to determine “whether rich countries’ reporting of adaptation finance is accurate, and whether the reported amounts genuinely contribute to climate adaptation. In addition, we investigated whether the funded projects are gender-responsive and prioritize the poorest and most vulnerable members of the target populations.”
The short answer to all that is “no.” Overall, the 112 projects corresponded to $6.2 billion in reported climate financing, but the CARE study found that at least $2.6 billion of that was spurious, funding that was reported as having a climate-related objective but had nothing at all to do with climate mitigation and adaptation, or described as connected to climate mitigation or adaptation in such an indirect way that the purported resulting activities or any impact could not be measured, or in most cases even vaguely defined.
A second, more insidious problem discovered by the CARE team and its partners was that a significant portion of the $6.2 billion was in the form of nonconcessional loans, or loans that did not have the typically mild terms of concessional loans with long grace periods and repayment schedules and very low interest rates. These loans, which will result in the lending countries’ getting their money back at a profit (albeit a modest one) logically should not be included as “contributions,” meaning that the real amount of overreporting is substantially higher than $2.6 billion.
Details of what the researchers discovered in the Philippines will follow in subsequent columns; as I said, this is a big, complex topic that takes some time to properly investigate, but even a brief summary of them is discouraging. The local study, conducted by the Institute for Climate and Sustainable Cities, Assistance and Cooperation for Community Resilience and Development Inc., and CARE in the Philippines looked at 18 projects between 2013 and 2017 totaling $2.1 billion in reported climate financing. Of that, at least $770 million, or about 37 percent, was determined to be overreported, with the biggest offenders being Japan ($425 million), the World Bank ($156 million), France ($98 million), the Asian Infrastructure Investment Bank ($54 million) and South Korea ($32 million).
All of these concerned parties are going to be getting some hard questions over the coming weeks. I expect that the answers to those ought to be pretty interesting.
ben.kritz@manilatimes.net
Twitter: @benkritz
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