‘Lack of Trust' on Climate Finance, Figueres Warns Before Paris Negotiations

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Christiana Figueres has been overseeing the slow march to an international climate agreement since May 2010, when the Costa Rican diplomat was named executive secretary of the UN Framework Convention on Climate Change. She hopes to shepherd nearly 200 nations to sign a global agreement to cut greenhouse gas emissions at the Nov. 30-Dec. 11 Paris summit.

Figueres spoke with Bloomberg BNA’s Dean Scott, senior reporter for climate change, at the UN High Level Event on Climate Change in New York on the schism over climate finance that still divides richer and poorer nations and the worrisome “lack of trust” between them just five months away from the Paris talks. She is less worried about the slow pace of pledges now on the table from negotiating parties — just over a dozen thus far including the U.S., the European Union and China, which formally submitted its offer to the UN June 30.

The head of the climate secretariat also held firm against scheduling any more rounds of formal talks this year beyond the two UN negotiations slated for Bonn, Germany, that end in October. This interview had been edited for clarity and length.

Bloomberg BNA:

You warned at the UN today that climate finance is the “most crucial component” of the climate accord needing more clarity. Where are we on climate finance, and can you lay out the key divisions?

Christiana Figueres:

The concern is there is a lack of clarity and a lack of trust. The lack of trust is actually two-fold; I think developing countries look at the historical trajectory that developed countries have had in delivering on their commitments and they [developing nations] don’t see too much evidence of those promises being [delivered]. So there’s a lack of trust there.

On the other side, there’s a lack of trust among developed countries about the means to which developing countries will put those funds, so it’s a two way street, right? The challenge here is to raise the level of trust on both sides, so that there can be a more meaningful conversation. Now, that’s one piece.

The second one is, developed countries committed in Copenhagen [in 2009] to providing developing countries with $100 billion a year starting in 2020. But we all know that you don’t get to $100 billion overnight. So developing countries have been saying for quite a while that they need to understand how [developed nations] are scaling up to the point where we will reach that $100 billion by 2020. 

Bloomberg BNA:

How far along are developed countries in reaching that $100 billion level, in your estimation?

Figueres:

Well, if you start from fast-track finance, which was $30 billion for three years—that was basically $10 billion a year. Now there is an understanding that the total $100 billion won’t be 100 percent public, that an important part of it will be public finance, but that [government] finance needs to be smartly used, largely to de-risk private capital to a combined [private and public] total of at least $100 billion. So that is the conversation now, and developing countries do not deem what is currently on the table actually a credible pathway [to that total]. So they want to have more information on how developed countries are going to build the road, if you will [to the $100 billion mark]. That’s absolutely fundamental.  

Bloomberg BNA:

You warned at the UN today that climate finance is the “most crucial component” of the climate accord needing more clarity. Where are we on climate finance, and can you lay out the key divisions?

Figueres:

The concern is there is a lack of clarity and a lack of trust. The lack of trust is actually two-fold—I think developing countries look at the historical trajectory that developed countries have had in delivering on their commitments and they [developing nations] don’t see too much evidence of those promises being [delivered]. So there’s a lack of trust there.   

Bloomberg BNA:

Some including the U.S. argue we’re already at $40 billion to $50 billion a year in annual climate finance a year, if you count existing flows of aid, but developing countries argue this is supposed to be new and additional funding. Are we near a consensus on which of those views will hold under this agreement?

Figueres:

The fact is, that $100 billion is the political litmus test for finance. But it’s more a political reality than an economic reality. Because the economic reality is that we need to be shifting trillions of dollars into a new green economy. There are varied numbers around: the $10.2 billion for the Green Climate Fund, it’s very, very clear where that comes from. But then if you go out in what I like to think of as concentric circles … there are other flows, some of which are public, some of which are other North-to-South [aid]. So depending on your definition, you could be well on your way to $100 billion. In fact, if you take the broadest definition of climate finance, we’re already way beyond the $100 billion. But the political reality is the $100 billion [pledged] needs more substance and more credibility.  

Bloomberg BNA:

On the pledges, more than a dozen parties have already submitted Intended Nationally Determined Contributions out of more than 190 negotiating the climate deal. Are you concerned about that, given the summit is five months out?

Figueres:

I’m not concerned. I really am not concerned. We have a substantial number. Industrialized countries need to take the lead, and we have a substantial number of those that are either in or have been announced. So for example, Japan has not submitted formally, but it has very publicly announced their numbers, which their prime minister announced at the recent G-7 meeting. So of the industrialized countries we are still waiting for: there’s Australia, and they're still working on theirs; I was there recently so I know they’re working on it; Canada’s is in; New Zealand is working on theirs. For industrialized [parties] that’s about it.

On developing countries: certainly all the [pledges from] major middle economies will be in by the October deadline—that’s the UN deadline that we need because we need one month to produce the synthesis report [before the opening of the Paris summit]. The Parties have given themselves the 1st of October as a deadline for submissions, and that’s where we draw a line in the sand because we have to [have] them then to write the synthesis report based on those INDCs. I am foreseeing we will have 75 to 80 percent of emissions covered [by those pledges] by then.  

Bloomberg BNA:

Any chance of having another round of talks after Bonn in October if more work is needed before Paris?

Figueres:

No, we have the one in September, which starts the last week of August [Aug. 31—Sept. 4, Bonn, Germany] and a week in October. And that’s it for that level of work.   

To contact the reporter on this story: Dean Scott at dscott@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com