How Transparent Donors Are in Providing Climate Finance

The recently concluded Cancun climate conference has seen various reports on the contributions of individual donor nations to the USD30 billion fast-start climate aid pledged in last year’s Copenhagen summit. In a blog, Jonathan Pickering, a research associate with the Development Policy Center at the Australian National University’s Crawford School, examines the types of information released by donors concerning their contributions to climate funding.

“The reports released to date are a welcome advance on the scant information that has been available to date, and some individual reports (notably that of the EU) provide a useful level of both synthesis and detail. However, the variability of the reports frustrates attempts to draw comparisons or identify global trends,” Pickering writes in the “Development Policy” blog.

He adds: “Some of the shortcomings highlighted here reflect systemic issues in aid reporting, such as using fiscal years that do not match calendar years, and distinguishing allocations from disbursements. But there is clear potential for contributing countries to improve the consistency and comprehensiveness of their reporting on fast-start finance.”

In terms of providing “new and additional” climate financing, U.S. and Japan do not mention anything on the issue, while European Union member states have yet to decide on a common measure of “additionality,” Pickering notes. Australia has indicated that its climate funding comes from its growing aid budget and does not displace financing for existing initiatives.

“[A]lthough since the projected increase in [Australian] aid was announced before fast-start pledges were made, this may not satisfy the more stringent criteria preferred by many developing countries,” he notes.

Meantime, loans account for more than half of the EU’s total climate aid, while Australian climate aid is released exclusively in the form of grants.

“For reporting purposes, it would be best if loans were accounted for both on the basis of their gross value and their ‘grant equivalence’ (e.g. a highly concessional loan may be equivalent to a grant of 90 [percent] of the face value of the loan),” according to Pickering.

The Cancun climate summit ran from Nov. 29 to Dec. 10.

About the author

  • Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.