Climate financing: New money needed

Article as analysis
In May 2014 the Government put Switzerland's climate policy on standby. As for international climate financing, it is operating on the premise that a substiantial part can still be taken from development aid funds...


At the end of May the Federal Council announced that Switzerland will not be adapting its climate protection target. As if more bad news were needed, the planning of a national climate protection scenario will not be tackled and Switzerland will continue to use development aid funds for climate financing. At the same time, Federal Council insists that it is still working towards the 2-degree target for limiting global warming and that, internationally, it is striving for a legally binding climate regime for the post-2020 period.
The Federal Council can take such decisions based on its executive powers. But it should tell citizens the truth. The 2-degree target and the international climate agreement cannot be achieved in this way.

2-degree target out of sight
The latest report by the World Climate Council states that the 2-degree target would only be attained if by 2050, global greenhouse gas emissions fell by 40 to 70% vis-à-vis the 2010 level and to almost zero by the end of the century. Fair burden sharing requires industrialized countries to make substantially more reductions so as to allow the global South some space for catch-up development. Yet Switzerland insists that by 2020 it will be emitting no more than 20% less CO2 by comparison with 1990.

Climate agreement a distant prospect.
It is not just domestically that Switzerland has abandoned any ambitious climate policy. Internationally too, it is paying mere lip service to the conclusion of a new climate agreement set to take place in Paris in 2015 in the UN framework. If this is to materialize, developing and emerging countries will need to agree to binding climate protection targets.
Yet the countries in the South are insisting that industrialized countries must first live up to their promises: they must accept their (historical) responsibility for climate change. This also entails paying the promised «climate funds». As of now those funds should be increasing annually by 10 billion dollars up to the year 2020, when they should reach 100 billion, an amount that would have to be paid every year thereafter. That was what the UN Member Countries agreed at Cancun in 2010.
There is no official scale of assessments for national contributions from the industrialized countries. In unilaterally calculating its own contribution for the years 2010 to 2012, Switzerland weighted its share of global emissions three times higher than that of global income. This approach produced a minimum share of some 460 million francs in the 100 billion dollars.
It would be more appropriate to apply the scale used for Member State contributions to the United Nations. The scale of assessments for mandatory contributions is based mainly on the economic power of countries, but also takes account of their level of development and their debt situation.
On that basis, Switzerland's contribution would be 1.3 billion francs annually by 2020. Depending on the basis of calculation, Switzerland should be paying some 90 million francs more per annum in climate funding as of now (between 40 and 140 million francs). Otherwise, it will be failing to meet its international obligations towards developing countries.
One central element here is that the money is to be found in addition to development aid and not, as hitherto, drawn from development funds. Today the Federal Council and the Federal Administration are operating on the premise that a substantial part of this climate funding can and ought still be taken from development aid funds. As decided by Parliament, aid funds should represent 0.5% of Gross National Income (GNI) as of 2015. The upshot is that in 2020, Switzerland would be diverting some 38% (between 20% and 57%) of its development aid towards climate measures.

The country needs new moneyThe intention to draw on development aid funds for global climate financing is a clear strategy of the Confederation, so as not to have to generate any new public sources of funding for its international commitments. The fact is that in this way it is cutting development aid in favour of climate funding.

Only new and additional funds can lead to new and additional climate measures that do not come at the expense of sustainable development (see below). The Confederation should seize the opportunity to come up with these funds as part of a constitutional amendment concerning the new climate and energy steering system foreseen for 2020. In the process, the introduction of an incentive CO2 tax earmarked for climate funding could effectively be killing three birds with one stone: the cost distribution would be more polluter-based, climate protection incentives would be created, and the requisite climate funds generated.
The conclusion of a new climate agreement in 2015 depends on the level of climate protection commitments as well as the adequacy of climate funding. Should Switzerland stand by its current climate policy, it would clearly bear part of the responsibility if the UN negotiations on a new agreement were to fail. If on the other hand a new agreement were reached, it would certainly not be as a result of Switzerland's policy.