AILAC achieved success in its climate finance priorities

By Luis Fierro Carrion (*)

The Independent Association of Latin America and the Caribbean (AILAC) achieved a complete success in its negotiating strategy on climate finance for the Paris Agreement on Climate Change.

All of the priorities, red lines, and "bridging proposals" made by AILAC were considered in the Agreement and the Decision that adopted it; and the concepts developed by AILAC were the core aspects of the climate finance "package" in the Agreement.

Thus, AILAC achieved an incidence well above its weight in the world economy (measured by GDP, population or greenhouse gas emissions). This was achieved due to the positioning of AILAC as a group of ambitious developing countries willing to make commitments on mitigation and adaptation, and with a capacity for dialogue with developed countries (promoting the notion that an ambitious agreement on reducing emissions required adequate counterpart funding commitments by developed countries). The role of Peru as the COP20 Presidency was vital, as well as the leadership of Colombia (Colombian delegates were appointed as Co-Facilitator for Adaptation and as a member of the Group of Legal and Linguistic Experts).

AILAC, initially formed by Colombia, Costa Rica, Chile, Guatemala, Panama, and Peru, was consolidated throughout 2015 with the entry of Paraguay in June and Honduras in December. AILAC had a very active role within the Group of 77 and China (the group of 134 developing countries), and in the Cartagena Dialogue (a space for dialogue between developed and developing countries which share a progressive and ambitious position). Several of its member countries also joined the "High Ambition Coalition " that emerged in the course of COP21, which grew to more than a hundred countries, including the United States, Canada, the European Union, and Brazil.

Priorities defined by AILAC

Since 2014, AILAC defined the following priorities for the climate finance component of the Paris Agreement:

• A collective quantitative target for the provision and mobilization of climate finance, to be defined periodically (AILAC proposed every five years), and to take as a "floor" the existing commitment to mobilize $ 100 billion per year from 2020.

• Developed countries should periodically communicate "ex - ante" the funding that they will provide developing countries (AILAC proposed a biennial communication).

• A qualitative long-term goal that would lead to all investments and financial flows being gradually directed towards promoting a low-carbon and climate resilient development.

• Ratifying the existing obligation of developed countries to provide climate finance; initially, it was proposed to invite "other countries in position to do so" to also provide funding. Eventually, AILAC introduced as "bridging proposal " a sentence ratifying the obligation of developed countries, and another one inviting other countries to contribute (in a voluntary manner).

• to maintain all developing countries as recipients of climate finance; avoiding giving preference to any specific geographical regions.

• Promoting a more balanced finance for adaptation.

• Increased transparency of information on the provision of financial support.

• Strengthen the Operating Entities of the Financial Mechanism of the Convention, which should serve the new agreement.

• Allowing the development of new international markets for the exchange of emission reduction certificates.

(These priorities were mentioned in a blog article in August 2015, http://goo.gl/uOi1Fz).

The concepts were introduced by "Submissions" presented at COP20 and during 2015; and also verbally during the ADP sessions in 2015.

It was decided that the main strategy to promote these priorities would be through the G77 & China, which was achieved by incorporating most of these positions in the "Submissions" presented by the G77 & China as a whole. In some cases, when there was no consensus within G77 & China (for example, with respect to qualitative long-term goal, and the invitation to other potential donors), dialogue continued with different groups of developing and developed countries.

An ongoing dialogue was maintained with the European Union, the Environmental Integrity Group (EIG) and NOAK (Nordic countries, including Norway); and also with the Cartagena Dialogue. In October a dinner was organized with various groups of developed and developing countries (including the United States, European Union, Switzerland, Mexico, AOSIS, LDCs) to promote the AILAC priorities in financing.

The concepts that faced greater resistance on behalf of developed countries were the quantitative collective goal to be reviewed periodically; as well as the ex - ante communication of the financing to be provided. Gradually, throughout 2015, these countries realized that these elements were essential to providing balance to the Paris Agreement as a whole.

How were AILAC priorities reflected in the Agreement and the Decision?

In the end, as was already mentioned, all of the AILAC priorities were reflected:

1. Quantified Collective Goal: Para. 54 of the Decision: "Also decides that, in accordance with Article 9, paragraph 3, of the Agreement, developed countries intend to continue their existing collective mobilization goal through 2025 in the context of meaningful mitigation actions and transparency on implementation; prior to 2025 the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries".

2. Ex-ante communication of financing to be provided: Art.9.5. "Developed country Parties shall biennially communicate indicative quantitative and qualitative information related to paragraphs 1 and 3 of this Article, as applicable, including, as available, projected levels of public financial resources to be provided to developing country Parties. Other Parties providing resources are encouraged to communicate biennially such information on a voluntary basis".

3. Qualitative Long Term Goal: Art 2.1.c.. "Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate- resilient development."

4. Ratification of obligation of developed countries to provide financing / invitation to others to do so: Art 9.1 and 9.2 "9.1. Developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention. 9.2. Other Parties are encouraged to provide or continue to provide such support voluntarily."

5. Keep reception of resources open to all developing countries: Article 9.1. already mentioned, as well as 9.3 and 9.4. There is no reference to specific geographic regions.

6. Greater balance in financing for adaptation: Art. 9.4. "The provision of scaled-up financial resources should aim to achieve a balance between adaptation and mitigation, taking into account country-driven strategies, and the priorities and needs of developing country Parties, especially those that are particularly vulnerable to the adverse effects of climate change … considering the need for public and grant-based resources for adaptation."

7. Greater transparency in financial support: Art. 9.7: "Developed country Parties shall provide transparent and consistent information on support for developing country Parties provided and mobilized through public interventions biennially in accordance with the modalities, procedures and guidelines to be adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, at its first session, as stipulated in Article 13, paragraph 13. Other Parties are encouraged to do so."

8. Strengthen the Operating Entities of the Financial Mechanism: Art 9.8 and 9.9. "9.8.The Financial Mechanism of the Convention, including its operating entities, shall serve as the financial mechanism of this Agreement. 9.9. The institutions serving this Agreement, including the operating entities of the Financial Mechanism of the Convention, shall aim to ensure efficient access to financial resources through simplified approval procedures and enhanced readiness support for developing country Parties, in particular for the least developed countries and small island developing States, in the context of their national climate strategies and plans."

9. Allow a market mechanism: this is reflected in Art. 6.4 and Paras. 38 and 39 of the Decision.

The Green Climate Fund (GCF) will become the main operating entity of the financial mechanism of the new agreement. During COP21, additional contributions to the GCF were announced by Norway, Canada, Vietnam, Estonia, City of Paris, and regions of Belgium; bringing the total committed to more than USD 10 billion. Similarly, additional donations were received for a total of USD 75 million for the Adaptation Fund from Germany, Sweden, Italy and the Belgian region of Wallonia (https://goo.gl/CKYgkz); 11 countries announced grants totaling USD 248 million to the Least Developed Countries Fund (LCDF); and several countries announced substantial increases in their climate financing in general (a summary of these announcements is available at: http://goo.gl/TZI01f).

AILAC Finance Team

One reason for the success of AILAC in the climate finance field was the strength of the team of delegates from AILAC that followed this issue. During COP21, the AILAC Finance Coordinators were Isabel Cavelier Adarve of Colombia and Jorge Gastelumendi of Peru. Other delegates that have played leading roles over the past two years include Maria Laura Rojas and Santiago Briceño of Colombia; Giovanna Valverde of Costa Rica; and Mirko Serkovic and Natalia Rojas-Jordan of Peru.

For me, it was a privilege to have supported the AILAC climate finance team, and to have contributed to the conceptual and strategic development that enabled these important achievements, which ultimately will make it easier for developing countries to pursue their mitigation and adaptation actions in the context of the Paris Agreement.

(*) Climate Finance Advisor for AILAC. The views expressed are personal and do not reflect the positions of AILAC or its member countries.