If you were trying to think of a good time to make a federal policy announcement without anyone noticing, what would you come up with? How would you escape the reach of the public and the media?
Canadians wondering about the federal government’s latest policy moves on climate change can’t really be faulted for missing the news. Environment Minister Jim Prentice released details of Canada’s commitment to provide climate change financing in support of the Copenhagen Accord in a Friday evening speech last October 1st.
More questions than clarity
Back in June, shortly before Canada hosted the G8 and G20 meetings, Mr. Prentice had already announced that his government would provide $400 million as our country’s portion of the $30 billion promised in Copenhagen by wealthy countries. The amount sounded about right: as the 8th largest greenhouse gas emitting country, and the world’s 13th largest economy, $400 million was widely regarded as Canada’s “fair share.”
According to Ottawa’s press release, “this investment of $400 million represents Canada’s largest ever contribution to support international efforts to address climate change” and thus “represents a significant breakthrough.”
The money was to be used to assist poorer countries to adapt to global warming challenges, as well as to mitigate increases in their carbon emissions.
What was unknown until October 1st, however, was how these funds were to be spent. While much of that is now evident, what remains in question even now is where these monies will come from. Furthermore, there is substantial disagreement about whether the funds will be spent in appropriate ways in order to fulfill our Copenhagen commitments.
Can $400 million be less than it appears?
Unfortunately, nearly three-quarters of Canada’s commitment ($285 million) is promised in the form of loans to the World Bank’s private sector lending arm. Such a decision does two things: it inflates the real value of Canada’s financing (assuming that at least some of the loans will be repaid), and secondly, loans to the struggling economies of the Global South are much less valuable than grants. According to the Pembina Institute’s Clare Demerse, Canada's 2010 financing is too heavily weighted towards loans. She noted that other developed countries will provide just under one-third of their financing as loans.
(In a move reeking with irony, Canada announced $5.8 million in grants (not loans) in order to allow the World Bank’s highly-paid consultants to provide advice to developing countries on energy efficiency and renewable energy strategies.)
As well, the Copenhagen Accord of December 2009 called for a “balanced” allocation between spending on adaptation and emission reduction. For poor countries with large vulnerable populations, where per-capita emissions are already low, adaptation strategies are often most crucial. International development agencies report that climate change is already having adverse effects on developing economies in terms of increasing desertification, falling crop yields, new diseases, and changes to ocean-based economies. Still, Pembina estimates that only 11% of Canada’s financing will go to adaptation initiatives. To get the balance right, much more than $20 million of Canada’s money should have been directed to the UN’s Least Developed Countries’ Fund.
Development NGO’s were already concerned with the Harper government’s announcement in Budget 2010, that international aid levels will be frozen for three years, starting in 2011. So the question for many development specialists and environmentalists was, “Where is this $400 million coming from?
Of course, the Copenhagen Accord signed by Canada promised “new and additional” money. If the federal government truly supported this Accord, it would surely have announced that the funding would be over and above Canada’s unimpressive aid budget. Yet, some bureaucrats privately admit that up to half of the $400 million will be taken from Canada’s budget for international assistance.
Next month, the 16th Session of the Conference of Parties of the UN Framework Convention on Climate Change takes place in Cancun, Mexico. Previously, developed countries committed themselves to a goal of mobilizing US$100 billion a year by 2020 to address climate change in developing countries. NGOs like OXFAM International are calling for a new Global Climate Fund that is “equitable, accountable, transparent and efficient.” Even if the world is still dealing with Copenhagen’s hangover, and a comprehensive climate agreement appears unlikely, OXFAM says, “Real progress can be made in Cancun.”
For its part, Canada should be prepared to contribute to this progress by announcing its intentions for 2011 and 2012 well in advance. Leadership could be shown to increase and improve the impact of our contribution to confront the impacts of climate change upon the poor.
“After all,” as the Pembina Institute writes, “we helped to create this problem, and have a responsibility to help fix it. Fair's fair.”