EU admits development funds also cover climate grants

Non-profits cry foul over two in one fund; say climate finance should be over and above development funds

By Ankur Paliwal
Published: Friday 20 September 2013

The European Union has admitted that the money given by developed countries under Overseas Development Assistance (ODA) to developing countries also covers the grant for climate change mitigation and adaptation measures. ODA can broadly be understood as development grant given to developing countries for various development projects, including those for education and public health. Environmental non-profits say that this amounts to double-counting as it was understood that the climate finance is over and above the development assistance.

In 2005, the EU states pledged to spend 0.7 per cent of their gross national income by 2015 to help meet UN’s eight Millennium Development Goals (MDGs).  But it now appears that the same aid and various other development grants have been counted towards meeting of both sets of targets at the same time.

The lines between the EU-funded projects for development and climate mitigation and adaptation often overlap and ODA funding in support of, for example, renewable energy projects can “clearly contribute to more than one objective,” EurActiv, quotes an anonymous EU official in a statement released on September 20. EurActiv is a Brussels based independent media portal dedicated to EU affairs. The official further added: “it is totally normal that such amounts of money could be counted against ODA commitments, since their primary objective is to contribute to poverty alleviation and also partly or fully contribute to climate change objectives.”

It means that funds like Fast Start Finance agreed to in the 15th Conference of Parties in Copenhagen, where developed countries pledged $30 billion between 2010 and 2012 for climate change adaptation and mitigation measures in developing countries, could have been double counted.

EurActiv statement also quotes Andris Piebalgs, EU’s development commissioner, saying “some of the resources (raised for the Green Climate Fund) fall in the ODA definition because of their concessional character.” Green Climate Fund was created at the 16th Conference of Parties in Cancun. Under this, it has been agreed that developed countries will put $100 billion every year after 2020 to assist developing countries. Piebalgs further added, “I am not in favour of artificial boundaries between financing for different policy goals. On the contrary, the available financing from all sources should be used in a way that allows reaching the various policy objectives with the same resources and sometimes through the same programmes.”

A synergy between development, sustainability, and the fight against climate change was needed, he said. By attempting to merge the Rio+20 agenda with the Millennium Development Goals after 2015—this is what international institutions hope to achieve.

Environmental NGOs have reacted sharply to this. Lies Craeynest, a spokesperson for Oxfam, said that the 0.7 per cent aid commitment was made long before the huge costs of climate change, such as coastal erosion, soil degradation, storm damage, losses to agricultural production and decreases in food security, became apparent. “Using the same money to report in different forum that you’ve achieved different objectives is double-counting and unfair to developing countries,” she told EurActiv.

Eva Joly, chair of the European Parliament’s development committee said, “There is a danger that we could use the ODA for environmental purposes. You cannot solve the development problem by putting all your money into energy production for instance, because you still need to fund health, education and all the other objectives in the MDGs,” said Joly.  The EU’s 2013 Monterrey Aid Accountability report earlier this year found that, for the first time, climate finance in 2012 had been taken from existing aid funds.

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