Untangling the money maze: Climate Reality branches unite for climate finance tracking and campaigning
July 5, 2024
Branches of The Climate Reality Project in Africa, Canada, India and South Asia, Indonesia, Japan, the Philippines, and the United States of America (USA) gathered in Singapore from June 24 to 27 for a collaborative four-day workshop on climate finance tracking and campaigning.
Organized by the Philippine branch and its host organization, the Institute for Climate and Sustainable Cities (ICSC), the Climate Finance Accountability Initiative (CFAI) Inception Workshop equipped participants with the basic understanding of climate finance and the skills to campaign for climate finance mechanisms and policies based on the needs, priorities, and strategies of climate-vulnerable countries.
“Climate justice requires mobilizing finances to meet the adaptation and mitigation needs of vulnerable communities,” stated Nazrin Castro, Manager of Climate Reality Philippines. “Through CFAI, we aim to foster shared accountability among donors, governments, and civil society. Climate Reality branches are uniquely positioned to champion this cause,” she added.
Representatives from The Climate Reality Project branches in Africa, Canada, India and South Asia, Indonesia, Japan, the Philippines, and the United States of America, the Institute for Climate and Sustainable Cities, and the Climate Vulnerable Forum participated in a knowledge-exchange and skills-building workshop.
In climate action, there is unity in diversity
CFAI is a joint program between Climate Reality Philippines and ICSC that aims to create a community of practice for climate finance tracking in Global South countries. While the initiative is focused on developing cases of climate finance flows in the Philippines and other climate-vulnerable countries, the workshop was extended as a capacity-building platform for Climate Reality branches on climate finance tracking and campaigning.
Climate Reality branches from the Global North and the Global South were represented in the workshop, which made for interesting differences in experiences, contexts, and perspectives—especially in terms of addressing climate finance accountability.
Climate finance knowledge among the participants was also unequal: some had extensive understanding of the subject while others had minimal. Nevertheless, the gaps in awareness were sufficiently addressed by detailed discussions on the topics including the sources of climate finance within the United Nations Framework Convention on Climate Change (UNFCCC), international financial institutions, and hands-on climate finance data mining exercises using the Organisation for Economic Cooperation and Development (OECD) database.
Danica Supnet, a Climate Reality Leader and ICSC’s Director for Climate Policy, emphasized the need for more ambitious targets and transparency in climate finance, along with the importance of civil society involvement in developing climate finance policies.
Fair share and equity in climate finance
Deeply embedded in all discussions was the principle of fair share, which refers to the concept of distributing the financial burden of addressing climate change in a way that’s considered equitable, based on historical responsibility and capability to pay.
“Fair share for developed countries in climate finance means meeting the earlier goal of mobilizing USD 100 billion annually by 2020. This joint goal aimed to ensure increased flows from governments, private sectors, and other entities to developing countries for mitigation and adaptation. But fair share isn’t just about developed countries. Developing countries need ambitious domestic efforts too, but that requires access to means of implementation and support—finance, technology transfer, and capacity building,” said Danica Supnet, Director for Climate Policy at ICSC.
The need for a more powerful voice for vulnerable countries within the global financial system was another key takeaway.
Sara Ahmed, Managing Director of the Climate Vulnerable Forum (CVF) Secretariat, shared that there is a push for the V20 Finance Ministers, finance arm of the CVF, to be recognized as an official group in the International Monetary Fund (IMF) and the World Bank.
“Climate vulnerable countries need a stronger voice in the global financial system. The reason for this is that frontline countries know better how to deal with climate like adaptation, for example, risk management. There’s a lot of innovation happening. And so much of that should be transported over to these [international finance] institutions,” said Ahmed.
Ahmed, a Climate Reality Leader who is now serving as the Managing Director of the CVF Secretariat, discussed the impacts of climate change on developing countries’ economies and the need for debt relief to address these issues. She also emphasized the importance of redirecting international financial flows to support local institutions and improving access to climate finance.
Global finance needs a climate shift
Ahmed pointed to the growing potential of multilateral development banks (MDBs) to unlock more climate finance, emphasizing the need for a global financial system that tackles both climate and debt crises for vulnerable countries.
“Climate-vulnerable countries have lost about 20% of their wealth, over half a trillion US dollars, between 2000 and 2019. What’s important to note now is that we’re in this situation because of the pandemic, climate impacts, high debt, high cost of capital, and high interest rates,” Ahmed said.
With developing countries drowning in debt, a significant chunk of their income is going towards servicing these debts instead of vital investments, including education, infrastructure development, and health. This crippling burden, according to Ahmed, leaves little room for climate action.
Ahmed elaborated on how MDBs could unlock trillions for climate action, outlining three (3) key strategies: optimizing their balance sheets, employing sophisticated risk management practices, and securing a significant capitalization boost. These actions hinge on the influence of major shareholders like the USA, Japan, China, Germany, the United Kingdom, and the European Union. Engaging these governments through targeted campaigns is, therefore, crucial to unlocking the vast potential of MDB’s for climate finance.
Concessional financing as a lifeline for climate action
While debt can be a burden, it can also be a tool for good. Concessional financing, offering grants and low-interest loans, is crucial for climate action in developing countries.
“I know debt is usually vilified in the climate stage. It’s vilified because it’s expensive but if the interest rate is lower than the medium-term growth rate, meaning if the interest rate is like 6% and our growth rate is 9%, that’s economical, that makes sense,” explained Ahmed.
The World Bank’s International Development Association (IDA) serves as a successful model. However, the current system based on Gross National Income (GNI) has limitations.
“If you’re a small island state with few people and lots of tourism dollars, you’re going to have a high GNI, but then, you know, a typhoon or a hurricane can come in and totally wipe out all your gains,” Ahmed explained, emphasizing the need for a better concessionality framework that better reflects vulnerability to climate shocks.
Ryan Towell, Science, Solutions, and Policy Vice President of The Climate Reality Project, presented USA’s climate finance contributions based on the data generated from the OECD platform.
Unveiling the money trail through the CFAI tracking process
The workshop emphasized the power of combining data mining using the OECD database and local tracking efforts undertaken by civil society organizations (CSOs). This powerful combination offers deeper insights into crucial questions surrounding adequacy of finance, national climate goal alignment, and access to existing mechanisms.
“Our CFAI tracking work aims to increase the understanding of the estimated costs of specific transitions and pathways within Nationally Determined Contributions and National Adaptation Plans and re-emphasize the importance of quality, the type of finance commitment, and the sector and stakeholder to which it is allocated.” Angel Chan, Climate Policy Senior Analyst at ICSC, said.
Janssen Martinez, ICSC’s Climate Policy Manager, highlighted the importance of meticulous analysis. He stressed the need to “triangulate” climate finance data, meaning drawing information from multiple sources to ensure accuracy and completeness.
In an engaging sharing session, Aurélie Kalenga-Njimngou and Courtney Morgan from The African Climate Reality Project discussed Zero Emissions | Omissions, their organization’s public finance campaign.
Campaigning for climate finance accountability
The unities forged during the climate finance lessons served as a solid foundation for the campaigning sessions. Participants were trained in crafting campaigns made to engage stakeholders, particularly climate finance policymakers.
Participants brainstormed a long-term vision: increased, fair, and needs-based climate finance for vulnerable countries. Their roadmap included securing greater commitments from major donors like Canada, Japan, and the USA. Additionally, they emphasized the importance of CSO involvement by pushing for national government agencies to establish tracking mechanisms and regional institutions to adopt policies requiring CSO and community engagement on climate finance.
Onto COP29
Fifteen years since developed countries pledged USD 100 billion per year for climate action, green investments remain lacking for many developing nations. Despite the OECD reporting that this goal was reached in 2022, the money for green initiatives are still hard to come by for climate-vulnerable countries. This makes the need for a global climate finance campaign more pressing, something the participants are more than ready to lead in their respective countries.
Now, the newly-minted climate finance campaigners are poised to take their learnings to the center of climate action policy: COP29 in Azerbaijan. At this year’s COP, climate finance is set to be discussed under the New Collective Quantified Goal on Climate Finance (NCQG), which is set to replace the USD 100 billion per year goal established in 2009.
“The workshop is not the end but the beginning of a much more fruitful and closer collaboration among Climate Reality Branches and partners. We will be scheduling online writeshop sessions so we can continue our Climate Finance Campaign Strategy document,” Castro said.
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"But I think what's great as well about what we learned is how we can use the same data to say different things, and how in the finance campaigns, we're often finding that it's difficult to link global north and global south branches, but this workshop really showed us how we can take the same methodology to do different things and call for different things in our own regions, right?"
“Transparency is an important tool for accountability. Although we can never be certain about the veracity of the reports submitted to various databases, it can give us a glimpse of how climate finance flows from the donor countries to recipient countries and if they are aligned with the climate priorities of vulnerable countries. Using these data and insights as jump-off points, we can then craft campaigns that will target a specific part of the finance flow."
"I think the more we practice the data mining and tracking practices, we will then really understand what is happening with all of the data that we have seen, from the disbursement from the Global North to the Global South. We really understand that some of it really mirrored the injustice that is happening. And that really triggers us to really do something about it-- not just really witnessing what's happening, but really putting into action what to do next."
"Whenever we talk about the benefits of ‘greening the environment’, it’s usually in the context of climate action, what are the things we can do to be able to adapt to and mitigate the effects of climate change, but we often forget that there’s another shade of green that is also important, money. Specifically, the money that is needed to solve the climate crisis. Alongside the complexities of Climate finance are also the problems rooted in unfulfilled commitments made by countries and the inefficiencies in the process itself. Now more than ever, as the effects of the climate crisis on the Global South become more and more apparent, we have to come up with bolder campaigns on how we track the funding and make sure that the process is efficient and that the funds that are being tagged are being implemented properly and are beneficial to the communities. Climate finance tracking is just a tool for achieving our greater call for more funding for developing countries in the region."
"Without this workshop, climate finance would have still remained my least favorite topic. So I think through the numbers that look quite intimidating, I could see stories, intentions, narratives. So [the workshop] was very powerful. I think the next step is for the Global North countries to work together and develop a narrative that might work for our government and for our people [to direct more money towards the Global South.]"
"Climate finance tracking is the cornerstone of an effective campaign on climate finance accountability. In the workshop, I learned that we have the available data and means right now to advance a global campaign on CF accountability that will demand a faster and more adequate mobilization of resources for vulnerable developing countries. Climate Reality as a global organization can activate its leaders to uphold a more transparent, fair, and needs-based mechanism for climate finance towards justice and sustainable development."
“For me, the workshop was like very much of an eye opener as far as money flow and execution of various projects are concerned, as far as international finance is spoken of. Thanks to the Philippine branch and all the other distinguished speakers also, because speakers really made it so convenient and easy for us to understand data mining and at the same time try to learn from each other as to what can be done on the ground."
“The very process of understanding and reaching out to the final conclusion on how to design your campaign is all that matters. Each and every session had an element from the previous session and hinting to the next one. Though the last day session on how to design your campaign stood out to me as we reached and had better clarity on where we are standing."
"The workshop covered various aspects of climate finance architecture and its application in campaigns. What caught my attention was the extensive infrastructure designed to support countries vulnerable to climate change. However, accessing these resources remains challenging. Additionally, the monitoring carried out by ICSC has shown that the financial support given by developed countries to developing nations needs to be re-evaluated. Some of these funds may not even meet the criteria for climate finance, and there is a growing need for more support as the effects of climate change become increasingly apparent. Therefore, greater transparency and increased global climate funds are needed. Developing countries require a system/plan/document to outline their financing needs, such as through a climate prosperity plan as one option."
