Tiempo Climate Newswatch

The Bonn Climate Change Talks ended in recriminations over lack of progress. "We're not at the moment seeing the leadership from industrialized countries which I think is essential," warned Yvo de Boer, executive secretary of the Framework Convention on Climate Change (UNFCCC), midway through the meeting. As the talks ended, he described the task of reaching agreement by the end of 2009 as "daunting." "It could well be said that we have been beating around the bush," said Chandrashekhar Dasgupta, India's representative. The United States, Canada and Australia, in particular, were accused by environmentalists of limiting progress.

On a positive note, "we are seeing a huge willingness on the part of developing countries to engage in working out a new pact in return for aid and technology," de Boer observed. In a workshop on investment and financial flows, the Philippines, on behalf of the G-77/China, identified basic principles, including equity and direct access to funding by recipients. Barbados, for the Alliance of Small Island States, said that new resources should be channeled through the climate treaty process and proposed a Convention adaptation fund, an insurance mechanism and a technology fund. Mexico favours a world climate change fund on mitigation, adaptation and technology transfer, with participation of all countries and contributions according to greenhouse gas emissions, population and GDP. Switzerland suggested a global carbon dioxide levy of US$2 per tonne on all fossil fuel emissions, with an exception for less developed countries.

The majority of projects applying for funding under the Clean Development Mechanism (CDM) or already approved should not be supported as "they would be built anyway," according to a report from analysts at Stanford University in the United States. "It looks like between one and two thirds of all the total CDM offsets do not represent actual emission cuts," reported author David Victor. "Traders are finding ways of gaining [carbon] credits that they would never have had before. You will never know accurately, but rich countries are clearly overpaying by a massive amount," he added.

The key requirement for funding is "additionality," emissions reductions over and above what would have occurred without CDM support. In a Guardian comment, Patrick McCully from International Rivers notes that nearly three-quarters of registered CDM projects were complete at the time funding was approved. "It would seem clear that a project that is already built cannot need extra income in order to be built," he comments. "Judging additionality has turned out to be unknowable and unworkable. It can never be proved definitively that if a developer or factory owner did not get offset income they would not build their project," he concludes.

The £800 million Environmental Transformation Fund, which was announced by the British government last November, will provide climate aid for developing nations mostly in the form of concessionary loans, to be repaid with interest, rather than grants, the Guardian has reported. "We need urgently to prepare for climate change, but we are not in a position to pay back loans," a spokesman for the Bangladesh high commission in London responded. "The climate situation has not been created by us. The money should come spontaneously from rich countries and not be a loan."

British ministers defended the decision to offer support through loans. "Loans, especially if they have a very large grant element - like ours will - enable larger and deeper investments and can then be used again by other countries, creating a higher impact," Phil Woolas (environment) and Gareth Thomas (trade and development) wrote following publication of the Guardian story. "If we cling to the sort of outdated thinking that implies that concessional loans aren't helpful for developing economies, we will get nowhere."