Let’s talk climate and finance

Since money is what makes the world go round, how about we start talking about the dollar and cents.

But do you know that people never seem to want to talk about finance in relation to climate change? Why is that so? And why is it so important that we discuss about climate finance? This is because, Money makes the world go round and Money will keep the Planet round.

Merryn Chong and Mohd Fahmi Azman Othman shall talk to you about money and climate. Before you continue reading, keep in mind that Money do grow on trees. Which is why we should talk money.

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Photocredits by cdkn.org

Money is basic necessity

By Merryn Chong

Climate changes poses risks to countries and community, especially to the poor, vulnerable and marginalize. It puts various elements of future human lives at risk, including food security, water and energy supply, and community development.

Climate finance, unlike climate change, does not receive similar attention and awareness from the public. Although it is an important element in preventing and mitigating the deterioration of climate change, many are unaware of climate financing as one of the important climate actions in a broader context. It improves development that are necessary to meet the food, water and energy needs of billions of people, without increasing carbon pollution or depleting scarce natural resources.

Climate finance can be defined as a public budget set aside by the government in order for a country to adapt to or mitigate against the effects of climate change. This budget that is spent on both adaptation and mitigation would ensure a greener and more sustainable development. Building resilient schools, investing in renewable energy and green technology or investing in drought resistance seeds for farmers are some examples of climate finance. This financing yield positive returns in the long term, not just in monetary value, but also in terms of improving the environment and surrounding.

A holistic approach must be taken into account when comes to climate financing simply because climate finance is distributed across sectors. Stronger collaboration between ministry, comprehensive planning, smarter planning, better monitoring and transparency should be promoted to ensure that climate finance and development policies are aligned with implementation on the ground. Thailand is a great example of how it recovers rapidly from the Great Flood in 2011 by leveraging on climate finance. In fact, Thailand incorporated climate finance in various aspects of natural disaster prevention. The building of resilient school buildings that promotes the teaching of climate change acts as a community space and storage of resources in the event of disasters. This action itself involves the collaboration of the Ministry of Education, Ministry of Science and Environment, Ministry of Finance, local government and communities, which again emphasize on the importance of cross sectors distribution.

The example set by Thailand is another reason why climate financing should be brought to the awareness of a larger audience. We are at a stage where long term impacts and actions should be prioritized when it involves tackling impacts of climate change. Climate financing ensures a more efficient use of existing funds, on both domestic and international level, to improve lives of humans and to provide a more climate resilient development for the future.

The maturity and availability of green technology is an area where developing nations might not be ready even though there is a funding provided for climate finance. Efforts have to be taken for countries in bridging the gap of understanding among people, to better assimilate climate finance into various sectors. This is because climate finance is a stepping stone towards promoting low carbon development for a greener growth, focusing more on green and smarter investment, while spreading awareness of technology and monitoring system.

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It’s how we manage our finances.

Photocredits by www.amanoverseas.com

Techicalities involving Climate Finance

ByMohd. Fahmi Azman Othman

Climate finance involves flows of funds from developed to developing nations to help poorer countries to cut their emissions and adapt to climate change.

The sources and governance of climate finance has been widely debated since the 2009 climate change summit in Copenhagen, where industrialised countries committed to giving $100 billion a year in additional climate finance from 2020 onwards. To get things going, immediate ‘fast-start’ finance of up to $30 billion was promised until the end of 2012.

Donor countries have met their initial commitment on fast-start finance. Over $30 billion in additional climate finance has been provided since Copenhagen. The UK has contributed £1.5 billion ($2.4 billion) so far, rising. But globally there is no clear path to ramp up support to the target $100 billion by the end of the decade – which is a concern given that rich countries have a history of not living up to aid promises.

Another concern is that meeting the target so far has involved the reclassification of some existing aid flows. Classification will always be a problem, particularly when it comes to dealing with the impacts of climate change (‘adaptation‘).

Better education and healthcare, access to safe drinking water, improved disaster relief and the availability of micro-finance will all make countries more resilient to climate change, but they are also basic development objectives. Therefore if the aim is climate-resilient development, there is no clear delineation between adaptation assistance and development aid.

Climate finance has been a central element of the international climate change agreements from the outset. The UN Framework Convention on Climate Change, agreed in 1992, stated that developed countries shall provide “new and additional financial resources” to developing countries. In the early years this financial assistance was channelled through the Global Environment Facility (GEF), either directly or through dedicated funds which the GEF administers (in particular, the Least Developed Country Fund and the Special Climate Change Fund). But over the years developing countries have become critical of the GEF, which they see as dominated by developed countries.

The search for new institutional arrangements has therefore been an important aspect of the climate finance discussion. The outcome has been the creation of a new organisation, the Green Climate Fund (GCF), which will be the main channel through which climate finance is allocated. The GCF, which is head-quartered in South Korea, is controlled by a Board on which developed and developing countries are equally represented.

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