Pakistan floods highlight need for Climate Fund

The developed countries have committed to pay for the cost incurred by developing countries to mitigate and adapt to climate change under the U.N. Climate Convention, which was signed in 1992. However, this commitment has remained mainly on paper.

This week, some Ministers have been invited to Geneva by the Swiss and Mexican governments to discuss climate financing.

The most basic issue, highlighted in the Pakistan floods and the Haiti earthquake, is the need for a proper system of assisting countries hit by climate-related disasters.

At present, the affected countries simply have to rely on charity and donations. The funds promised are usually far too little, and even less of that is eventually paid.

Thus, the climate talks have to produce a proper institutional financing system, and at the top of the agenda is the setting up of a new Climate Fund.

Developing countries want it to be under the authority of the United Nation's climate convention, and not come under the control of the World Bank which they have had bad experiences with.

Another key issue is the amount of funds needed, for mitigation (measures to prevent climate change), adaptation (measures to cope with the effects of climate change), technology and capacity building.

For mitigation, the World Bank's World Development Report 2010 has estimated that: “In developing countries mitigation could cost between US$140 billion and US$175 billion a year over the next 20 years, with associated financing needs of between US$265 billion and US$565 billion.”

For adaptation, there are various estimates of financing needs. Most studies are limited in scope — leaving out several sectors and activities — cost estimates.

A World Bank report estimates developing countries need up to US$100 billion a year for adaptation.

This is higher than the estimate in the U.N. climate convention (UNFCCC) secretariat report which estimates the cost at between US$27 billion and US$66 billion a year.

However, if under-estimation is corrected in sectors studied, the real cost would be between US$68 billion and US$165 billion a year. Financing is also needed for climate technology.

The UNFCCC's technology expert group reported that finance needs for technology are between US$300 billion and US$1 trillion a year.

Of this total, developing countries are estimated to have additional funding needs of between US$182 billion and US$505 billion a year, for deployment and diffusion of technology.

Again, this seems to be an under-estimate as the report controversially assumes the developing countries do not need research and development or technology demonstration, activities which are only for developed countries.

The promises so far by developed countries — US$10 billion a year in 2010-12 and up to US$100 billion a year by 2020 — are very little, compared with what is needed.

As the Pakistan flood tragedy shows, the damage caused by climate change and weather events can be very high.

The challenges in preventing the calamities and managing them when they happen are also very great.

The financing system and the amounts of financing have now to be discussed seriously so that developing countries can have a chance of surviving, let alone developing, in future.

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