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Updated: October 7, 2010 03:27 IST

Climate finance, key issue

Ananth Krishnan
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Financial assistance from developed countries for projects to combat climate change in the developing world has emerged as a key sticking point at the climate meet in Tianjin, which is the last round of negotiations before the year-end Cancun conference.

Negotiators from India, China and other developing nations have called on the West to step up commitments with promises, as yet, falling short of expectations. Differences have also surfaced over developed countries repackaging earlier development aid as climate-related funding.

“You cannot simply fill a new bottle with old wine,” said Su Wei, director of the climate change department of China's National Development and Reform Commission (NDRC) and the country's chief climate negotiator.

Indian and Chinese officials have also expressed their frustration at attempts by negotiators from the West, particularly from the United States, to divide developing nations on the finance issue. Developed countries this week reiterated calls for large developing nations to commit to financing projects in less developed countries.

At the Copenhagen summit in December last year, developed countries pledged to commit $30 billion to “fast start” projects in the next three years. While much of this amount has been identified, differences have persisted on how much funding would be new commitments and how much would be derived from earlier pledged development assistance. Mr. Su said on Wednesday the money had to be “new and additional”, and not redirected from earlier commitments such as Overseas Development Assistance programmes. While Chinese officials this week played down expectations of a binding deal being reached at Cancun, they have identified climate finance as a priority for the year-end talks. “There is a lot of expectation of some agreement on climate finance being reached in Cancun,” Yang Ailun, Greenpeace China's head of climate and energy, told The Hindu. “The Chinese delegation has even defined the success of the Cancun conference in terms of climate finance.”

Differences, however, remain on how projects funded by financial aid would be measured, reported and verified (MRV) by developed countries.

Proposals from the U.S., according to sources, had called for strict measures in terms of data transparency as a condition for receiving assistance. Mr. Su said China had no objection to MRV for internationally-financed projects, as long as it “respected developing countries' sovereignty” and was “non-confrontational”. But what would fall within those terms remained unclear.

Green groups have criticised moves to link data transparency to climate finance. “It is a tactic to put pressure on countries like China and India, by saying that if you want to get financial aid from us, there needs to be a particular level of data transparency,” said Ms. Yang. “This tactic should be condemned, as developed countries, first and foremost, have a responsibility to commit aid. Linking this to another issue is irresponsible.”

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