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MODULE #1 – What is Climate Finance? MODULE #1 - What is Climate Finance? Facilitator’s Guide Welcome to the private climate finance learning module series – a collaborative project of the Institute for Policy Studies and the Heinrich Böll Foundation North America. We’re excited that you’ve downloaded the “What is Climate Finance” facilitator’s guide, and we’d like share with you a bit about the concept. This series is follow-up from a 6-week crash course IPS offered in 2012 for climate activists and advocates interested in gaining a better understanding of the current debates about the roles of public institutions and the private sector in energy and climate-related finance – and their intersection. The material and resources presented here largely comes from those discussions – they are intended as tools and suggestions to cultivate discussion and collective learning. In no way do we claim to have all the answers. In fact, we hope to learn from the experiences you have in facilitating workshops, trainings, strategic planning sessions, action camps – where ever you use this module! In that spirit, we encourage you to adapt these tools to suit your needs and audiences, especially by adding local case studies, experiences and popular education methodologies. And please feel free to contact us for suggestions on how to tailor the material to your specific circumstances ([email protected] or [email protected]). Here’s an overview of what’s included in each module packet, and on our website (climatemarkets.org): module description – what it sounds like; a brief description of the topics covered learning objectives – an indicative list of the what we hope people will gain, individually or for their group, from participating in discussions and activities guiding questions – big picture, framing questions that may help facilitators and participants guide their inquiry into each topic by providing connecting and cross-cutting themes facilitator’s guide – a suggested roadmap for how to move participants through discussion, including suggestions for preparation, methodologies, and activities powerpoint presentation – a comprehensive set of slides with notes and citations that can be used in lecture format or to guide group discussions; more slides are provided than can be reasonably used in any single presentation so please pick and choose according to your needs! case study fact sheet – a brief overview of a real world example of climate finance ‘on the ground’ that can be used to help participants ground conceptual discussions annotated reader and resource list – suggestions for articles, essays, books and web resources with brief descriptions where facilitators and participants can learn more about the ideas, debates, policies and impacts of each module topic Also on our website are two additional fantastic resources that we think you’ll find useful. The first is a glossary of climate finance terms for anyone who wants to know their way around the complex language of finance products and institutions related to climate change. Many of the terms are politically contested and we’ve tried to give readers a sense of why these disputes arise, and of the 1 MODULE #1 – What is Climate Finance? main differences of interpretation that are currently circulating. The second resource is a critical reader on private climate finance introduces the issues at the center of debates on climate finance right now - what climate change means for the financial sector, and what financial opportunities financial markets, private banks and investors see in relation to climate change – through articles and selections of longer pieces. Module Description The module begins by brainstorming with participants what climate change looks like in their communities and what climate finance could be used to pay for. The session then outlines the various conceptions of climate finance – and introduces existing obligations and principles that underlie them. It introduces existing flows of climate finance and focuses in on the Green Climate Fund and fast start finance, and participants analyze this finance against principles they develop. Finally, the session introduces innovative sources of climate finance and has participants assessing proposals based on criteria for fair and effective finance Learning objectives 1. Participants understand the variety of definitions of climate finance and their implications. 2. Participants develop their individual/organizational definition of climate finance. 3. Participants understand the basic architecture of international climate finance institutions and flows. 4. Participants develop a basic understanding of the main proposals for raising climate finance, and develop criteria to evaluate the fairness and effectiveness of each. Guiding questions What is climate finance? What are the main frameworks and definitions? How does climate finance relate to other financial flows, such as climate debt, energy subsidies, infrastructure finance, development assistance? What do participants consider to be the important principles that should guide climate finance? How does this influence what should ‘count’ as climate finance in an ethical and/or legal sense? What are existing climate finance flows and institutions, and how do they measure up to participants’ principles? Time required: at least 120 minutes (this module could easily be adapted to a half day session by including all slides and multiple group activities; if you choose to do a 2 hour session, choose which topics in this module you think are most important to cover). Preparation and supplies needed Name tags Colored markers, large flip chart paper Laptop, LCD projector and screen (or use flip chart paper to ‘draw’ slides) On flip chart paper, prepare the following pages (see powerpoint slide show/facilitator’s guide for more info on the use of these pages): o Rules of the road for the conversation (Slide 1) o Workshop objectives (Slide 2) o Guiding questions (Slide 4) o Climate change impacts/responses (Slide 5) o Adaptation/Mitigation (Slide 11) Note cards and tape to stick cards on walls around the room Paper and pens/pencils for each participant 2 MODULE #1 – What is Climate Finance? Print out worksheets for Activities #1 & #3 for each person, and enough Activity #2 worksheets to give one example to each person in each small group (i.e. each person in Group 3 should get a copy of Example 3) Identify climate impacts in your country, and projects taking place in your country to address climate change. Identify some of the major financial institutions funding or providing technical assistance to these projects, and any responses from local communities where projects are proposed or on-going. If you think participants would find it helpful, use these to produce a reference sheet/handout for the session. Suggested group activities Each of these activities is described in more detail in their accompanying slides. Activity #1: Defining climate finance. Accompanying materials: Activity #1 worksheet, Slides 25-28 in powerpoint presentation Suggested time: 20-30 mins Working in pairs, come up with a 1-3 sentence definition of ‘climate finance’ that aligns with your climate justice perspective, outline principles of fair climate finance, and what you think should ‘count’ under climate finance; large group share and compare. Activity #2: Fast Start Finance Accompanying materials: Activity #2 worksheet, Slide 42 Suggested time: 30 mins In groups of 2-3 participants analyze brief examples of fast start finance projects through the lens of their definition and principles of climate finance; groups identify what additional information is needed to assess climate finance; follow with full group discussion Activity #3: Innovative Sources of Climate Finance Accompanying materials: Activity #3 worksheets, Slide 50 Suggested time: 25 mins In small groups rate proposed sources of climate finance according to criteria for fairness and effectiveness; discuss findings with large group and rate priority sources. Suggested agenda and format for the session This is a slide-by-slide guide to the accompanying powerpoint presentation. The notes here have been added to each slide and outline major themes, suggested discussion questions, activities, and citations. Because we expect facilitators to pick and choose content – not necessarily use every slide – we have formatted the guide as a work document. Feel free add content, write notes, or delete sections. If showing slides is not an option, this guide can help you think about what to present on flip chart paper. It is highly recommended that you work with a co-facilitator or enlist someone to scribe when using flip chart paper. Slide 1 – What is Climate Finance? Suggested activity (about 10 mins): as a warm-up exercise, ask each participant as they come in to write down the name of their community on a notecard and write down or draw one way that climate change is impacting their community. Ask participants to tape notecards on the wall and look at other participants notecards. Have materials and name tags available for people as they arrive. 3 MODULE #1 – What is Climate Finance? Slide 2 - Review the objectives of the session Suggestion: Post objectives on flip-chart paper in a place where everyone can see them, leave space for additions Slide 3 – Introductions Ask each participant to introduce themselves briefly (in 2 mins), adjust to size of the group and time available for session) and offer any additional objectives for the session; write these additions on the posted flip chart paper Slide 4 – Guiding questions Review guiding questions verbally. These are meant to help frame the session and can be kept in mind throughout the conversation, but don’t necessarily have to be answered directly. Reword these questions to meet your needs, and post on flip chart paper. Ask participants if they have anything guiding questions to add, write them on the flip chart paper Slide 5 – What does climate change look like locally? Discussion (15 mins): Drawing on the exercise outlined in Slide 1, ask people to share how they see climate change impacting. Capture examples on flip chart paper. Slide 6 – What does climate finance pay for? •Disaster risk reduction and recovery •Drought insurance •famine relief •Infrastructure to deal with sea level rise •Community adaptation planning •Clean energy access •Large scale renewable energy •Controversial renewable energy like large-scale hydro power •Associated relocation of local populations •Both sustainable agriculture or biofuel plantations There is no one activity that captures what climate finance pays for. The point here is to understand that financing to address “climate” concerns is a concept that includes funding for everything from clean energy access and food systems to education, economic development and disaster relief. It can also mean financing for things the climate justice movement identifies as ‘false solutions’ like large hydropower dams or ‘clean’ coal and large scale biofuels. Slide 7 – Overview of the La Mata & La Ventosa Wind Park **Refer to case study fact sheets in this overview and discussion in Slides 7-10. Let’s look at one example of an existing case of climate finance – a wind park in Oaxaca Mexico – to understand the kinds of actors and institutions involved in climate finance, how money flows and how benefits accrue. Slide 8 – The actors and financial flows Here’s the overall picture: EDF profits from sales of electricity. Walmart gains cheaper electricity. No electricity goes to the community. Now let’s examine some of the details of this case’s financial flows. The project receives several loans. The largest of these is $80.7million from the US Export-Import Bank to Eléctrica del Valle de México (EVM), the “special purpose vehicle” company that runs the 4 MODULE #1 – What is Climate Finance? project. This is conditional upon EVM buying and importing $97m of US-made turbines from Clipper. Other loans from the International Finance Corporation, Inter-American Development Bank and Clean Technology Fund go directly to EVM. The equity (money invested in EVM, against which the loans are made) is provided by EDF Energies Nouvelles, a subsidiary of French energy giant EdF. Walmart holds a very small (>1%) equity stake in EVM, the point of which is solely to exploit a “selfsupply” loophole in Mexican energy laws. This allows Walmart to claim that it is producing power for its own use, and so receive electricity more cheaply under a special Mexican law. Slide 9 – Some implications of this financing model There are many issues with this project in terms of its support for a flawed development model (wind energy is displacing coal, the project will hire few local workers, it abuses Mexico’s ‘selfsupply’ law, etc.) which you can read more about on the accompanying case study fact sheet. But here are two highlights: The Clean Technology Fund claims that its concessional loans encourage other financing. In this case the CTF claims its loan of $15 million to EVM “leveraged” almost 10 times that amount ($140 million) from other financial institutions. However, that money had already been pledged. Clean Development Mechanism – wind farm is not “additional” (the wind farm would have been built even without revenue from carbon credits) but credits will be sold back to EdF to offset its fossil fuel emissions in Europe, so it can continue polluting. Slide 10 – Local impacts and community resistance The development finance institutions hope that the La Mata & La Ventosa project will encourage private sector investment in wind power in Oaxaca, but these plans have met with considerable local resistance amidst concerns that they form part of an attempt to grab indigenous lands and convert them into resources for the market. Again, see the accompanying case study fact sheet for more details on local community impacts. Suggested discussion (5-10 mins): Who are the main beneficiaries of this project? Slide 11 – climate finance is meant to pay for adaptation and mitigation Generally, climate funding fits into two categories of activities – adaptation and mitigation activities. Some activities – like sustainable agriculture or preventing deforestation might fit into both categories. Adaptation means dealing with the impacts of climate change like drought, flooding, sea level rise, famine. Adaptation finance can pay for things like relocation, climate resilience planning, new agricultural methods Mitigation generally refers to activities that lower greenhouse gases (like making factories more efficient or switching from natural gas to wind power) or avoid releasing emissions in the first place (like preventing a forest from being cut, or bringing energy access to a community with household solar power instead of building a coal power plant) Discussion (10 mins): What are some climate adaptation and/or mitigation efforts that currently receive or could benefit from financing in your community (you can remind people to look at the 5 MODULE #1 – What is Climate Finance? climate impacts they talked about earlier). On flip chart paper make columns for ‘adaptation’ and ‘mitigation’ and leave space at the bottom for activities that could be both. Slide 12 – The scale of the need for climate finance in developing countries •Pakistan 2011 floods, 14 million affected, $10-15 billion for reconstruction (MSNBC) •Thailand 2011 floods, $46 billion (WB 2011) •Superstorm Sandy 2012, $71 billion (IrishTimes) Adaptation finance: World Bank Development Report (2010) estimates adaptation costs to developing countries at $75 to ~$100 billion a year; but adjusting for missing sectors like manufacturing, energy, retail, tourism, etc., the South Centre estimate total developing country adaptation needs at around $450 billion a year (2012). Mitigation finance: UN Department of Economic and Social Affairs (UNDESA) 2011 World Economic and Social Survey found that developing countries will need $1,100 billion per year for energy ($1,080bn) and agriculture ($20bn) sector transformation to move to low-carbon development pathways. ESA What’s on the table •The commitment made by developed countries at the Copenhagen climate summit in 2009 to mobilize $100bn per year in climate finance is less than 10% of what’s needed for mitigation alone. •The ‘fast start finance’ provided from 2009 through 2012 is only $24bn – and doesn’t even come close. Suggested discussion (10 mins): What are some possible reasons that with such great need in developing countries for climate mitigation and adaptation finance there is so little money being provided or promised by developed countries? Slide 13 – As we saw from the last slide, there is not much money for climate finance being provided now, but there’s a huge need. We’ve talked about why there are challenges in making the money available. To understand climate finance from a climate justice or social movement perspective, and to inform our advocacy and activism, it’s important to ask who should be responsible for delivering this money and how? There are two dominant frameworks for understanding obligations of certain actors to provide climate finance. One is a climate debt framework. Quick group brainstorm (3-5 mins): What is climate debt? You can type participants’ ideas into the powerpoint presentation, or write them down on flip chart paper and post them in the front of the room. Slide 14 – The basic idea of climate debt – climate change is primarily the responsibility of the relatively small population from developed countries. •Most affected are poorest countries, marginalized within countries, future generations and the natural systems that we all depend on •Obligation of compensation that is generated because of the damage by GHG emissions There are four categories of climate debt 6 MODULE #1 – What is Climate Finance? •Emissions debt •Development debt •Adaptation debt •Migration debt Slide 15 – Emissions debt Facilitators may choose not to show this slide, but instead it as background for the discussion of climate debt, or with audiences particularly interested in discussion climate debt. Slide 16 – Development debt Facilitators may choose not to show this slide, but instead it as background for the discussion of climate debt, or with audiences particularly interested in discussion climate debt. Slide 17 – Adaptation debt Facilitators may choose not to show this slide, but instead it as background for the discussion of climate debt, or with audiences particularly interested in discussion climate debt. Slide 18 – Migration debt Facilitators may choose not to show this slide, but instead it as background for the discussion of climate debt, or with audiences particularly interested in discussion climate debt. Slide 19 – The climate debt framework for understanding climate finance and financing obligations is centered on the concepts of compensation and ‘polluter pays.’ This means climate finance is not like ‘development assistance’ or aid. It should not come attached with conditions (although the institutions through with it flows should adhere to international conventions & standards like Free, Prior and Informed Consent). Suggested discussion: Some critics of the concept of ‘climate debt’ say that it too strongly based on guilt, dependence or past experience to be useful or effective. What is your opinion? Slide 20 – UNFCCC Article IV Another important framework for understanding climate finance obligations is the UN Framework Convention on Climate Change (UNFCCC). In article 4 of the Convention developed and developing countries agreed that industrialized countries would provide the financial resources for poorer countries to implement greenhouse gas mitigation and climate change adaptation activities. Similar to the climate debt concept, the UNFCCC establishes that those countries who were most responsible for creating the climate crisis are obligated to support those countries that did not contribute much to climate change as they deal with itsimpacts and the move away from cheap, dirty energy development. When discussing developed country obligations for delivering climate finance to developing countries, people often refer specifically to Article 4.3 under the UN Framework Convention on Climate Change, which you can find here: http://unfccc.int/essential_background/convention/background/items/1362.php Slide 21 – UNFCCC Article IV continued (mainly as background for the facilitator) Two key pieces of understanding climate finance through the lens of legal obligations in the UN Climate Convention are 1) that developing country action is predicated on financing being provided and that 2) their actions to reduce emissions should be seen in the context of sustainable 7 MODULE #1 – What is Climate Finance? development. Reducing poverty is the first priority, but to make sure that things like energy access for all means CLEAN, RENEWABLE and SUSTAINABLE energy for all, there must be financial support by wealthy industrial countries. Slide 22 – UNFCCC cont. (mainly as background for facilitator) The Bali Action Plan – an agreement made at the 2007 UN climate summit in Bali, Indonesia – outlined further principles for climate finance. These more or less represent the political position of developing countries and formed a starting point for many social movement and NGO groups when they drafted their own climate finance principles. However, there are some controversial ideas included in the Bali Action Plan principles, including “mobilization of public and private sector funding and investment.” Many social movement feel that climate finance should be delivered by the public sector, and that private investment shouldn’t be counted as ‘climate finance.’ Slide 23 – Defining climate finance Now that we’ve talked about the impacts of climate change, the need for money in impacted communities and countries to deal with climate change, and identified two critical frameworks for understanding whose obligation it is to provide that money and how, it’s important for us as climate, economic and social justice activists to define ‘climate finance’ for ourselves, and build on the principles of fair and effective climate finance developed by environmental justice movements. Slide 24 – There are many contentious issues when discussion what climate finance is and what should ‘count.’ For example, should South-South climate finance ‘count’ as climate finance? Not according to the UNFCCC. Should money that was already going to be transferred to developing countries for disaster relief be able to be repackaged and count as climate finance? Not according to the principle of additionality. Should financing that comes with conditions to purchase equipment or hire firms from developed countries count as climate finance? Suggested discussion (5 mins): Ask participants to reflect on these contentious issues in defining climate finance using pop-corn style response. Reflections could include anything from expressing an opinion on what should or shouldn’t count as climate finance, to what other contentious issues or questions they identify. This short discussion is meant as a warm up for the next small group activity. Slides 25, 26 & 27 – Existing definitions of climate finance These slides showcase a wide variety of definitions of climate finance – from those that align closely with a justice framing to those very different from this perspective. You could pull out 3-4 definitions to show participants, or print these definitions on a sheet of paper for each participant to use as reference in the following small group exercise described on slide 28. Slide 28 – Small group exercise (20-30 mins): Defining climate finance *print out worksheet provided in this tool kit Working in pairs, come up with a 1-3 sentence definition of ‘climate finance’ that aligns with your climate justice perspective. Recalling the discussion, outline principles of fair climate finance, and what you think should ‘count’ under climate finance – i.e. what kinds of projects, what kinds of 8 MODULE #1 – What is Climate Finance? financing, etc. After 20 mins, ask the whole group to come back together and have each pair share their definition of climate finance. In addition, you could ask groups to share their top 3 priority principles and give one example of what should and shouldn’t count as climate finance. You could move to Slide 27 during this discussion and ask the group how their principles compare to principles developed by a collaboration of movements and NGOs led by anti-debt movements working on climate justice. Slide 29 – climate justice principles for climate finance You could leave this slide in the background as groups share the definitions, principles and ideas for what counts as climate finance that they’ve developed, and open a discussion about how the groups’ definitions and principles compare with these principles which were developed by a collaboration of movements and NGOs led by anti-debt movements working on climate justice. Slide 30 – transition to existing climate finance flows Slide 31 – Before we talk about climate finance flows, we should recognize that there are multiple challenges to tracking climate finance flows – the biggest of which is a lack of common definitions about what climate finance is and a lack of a common framework for measuring, reporting and verifying what climate finance has been delivered Slide 32 – climate finance architecture to channel flows Current sources of climate finance include: Public sources, through bilateral, multilateral and domestic channels: o Bilateral sources include direct budgetary contributions, including climate related development assistance or purchase of emissions credits through bilateral arrangements (One of the debates under the negotiations includes whether ODA should be “counted” as climate finance given the principle agreed under the Bali Action Plan that climate finance should be “new and additional” (to ODA). o Multilateral sources including the World Bank and regional development banks, and climate related agencies and funds such as UNEP o Domestic allocations from within developing country governments can reinforce other forms of public climate finance o UNFCCC channels include multilateral funds and bilateral transfers that were agreed to in the context of the climate convention – for example the Adaptation Fund, the new Green Climate Fund, funds at the Global Environment Facility, and fast start financing Private finance can come in the form of insurance, investment firms, private banks, carbon markets, some foreign direct investment and climate related philanthropic sources. Slide 33 – Existing climate finance flows According to a 2012 study by the Climate Policy Initiative, approximately $97bn is flowing for climate and climate-related projects and programs globally. This figure is very controversial because it includes financing that doesn’t fit most definitions and principles of fair/just climate finance or legal obligations under the UNFCCC. Slide 34 – existing climate finance flows (cont.) According to the Climate Policy Initiative’s analysis the majority of existing climate-related finance flows are from private sources (although it should be noted that CPI’s definition of climate finance is contentious). 9 MODULE #1 – What is Climate Finance? Slide 35 – existing climate flows (cont.) From the Climate Policy Initiative’s analysis, very little money is going to adaptation – public or private. Most money appears to be flowing to mitigation projects. Slide 36 – overview climate finance flows Slide 37 – There are multiple flows within the UNFCCC structures. The Adaptation Fund and Global Environment Facility – and the Special Climate Change Fund and Least Developed Counties Fund that it hosts, have been financial mechanisms of the UNFCCC since 2007, 2001 and 2002, respectively. These funds have about $1.7bn pledged by developed countries (according to data from www.climatefinanceupdate.org). Slide 38 – Copenhagen Accord climate finance commitments At the Copenhagen UN climate summit in December 2009 developed countries committed to providing new and additional financial resources of up to $30bn from then until the end of 2012. This came to be known as Fast Start Finance. They also promised to “mobilize” $100bn per year by 2020. This came to be known as Long Term Finance. It’s important to note the difference between “provide” or “deliver” finance, which connotes a responsibility to actively get that money to developing countries, and “mobilize” finance, which connotes a passive role in getting someone else – in this case the private sector no to make the money show up! Countries also agreed in Copenhagen to set up a Green Climate Fund as a channel for the $100bn per year of Long Term Finance – although developed countries later said that they never had an intention of channeling all of the $100bn through the Fund. The Green Climate Fund was officially established at the 2010 climate summit in Cancun, Mexico. You can find the decision and the Copenhagen Accord text here: http://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf#page=4 Slide 39 – Flows within the UNFCCC structures. Now let’s look at Fast Start Finance. Slide 40 – Statistics on fast start financing There were never any binding commitments to fast start climate finance in terms of allocating a portion to specific countries, or establishing common reporting frameworks to compare the quantity and quality of the money pledged and actually delivered. Some important points to note: •Only 20% allocated for adaptation •<50% in form of grants •Only 2% through UN funds •Total funding committed (although not delivered) falls shot of promised $30bn (Additional observations/analysis can be found on Slide 41) Slide 41 – Overview of Fast Start Finance This helpful overview of the 2012 analysis provided by World Resources Institute could be used to point out trends in the data shown in Slide 27. The entire analysis can be found here: http://www.wri.org/publication/summary-of-developed-country-fast-start-climate-financepledges#qanda 10 MODULE #1 – What is Climate Finance? In addition to the WRI analysis, Oxfam estimates that about 50-70% of Fast Start Finance can be considered new, and less than 5% additional. Other useful sites include: http://www.odi.org.uk/resources/docs/7272.pdf http://www.odi.org.uk/resources/details.asp?id=6560&title=usa-america-fast-start-financeunfccc-pledge http://www.odi.org.uk/resources/details.asp?id=6559&title=fast-start-finance-unfcccmultilateral-uk Slide 42 – Small group activity (30 mins): Analyze examples of fast start finance ** print out Activity 2 list of fast start finance examples. For more examples and relevant national examples, look here at the U.S. State Department’s 2012 fast start finance report: http://www.state.gov/e/oes/climate/faststart/index.htm Divide participants into groups of 2-3 people and give each person in each small group the same fast start finance description. Ask the groups to analyze their examples through the lens of the definitions and principles of climate finance that participants have been debated and developing in previous activities and discussions. Ask groups to identify what additional information they might need to make an assessment of these initiatives. Ask each group to present their example, how it measures up to their climate finance definition and principles, and the information they need. Follow with a full group discussion and/or summarize the similarities, differences and any surprising findings of the discussion. Slide 43 – UNFCCC flows of climate finance. Now let’s talk about the Green Climate Fund. Slides 44 & 45 – Green Climate Fund The Green Climate Fund is poised to be the most important multilateral fund for channeling climate finance. It was established in 2010 and launched in 2011, but is still being designed as of 2013. it is expected to be operational sometime in 2014. Facilitators might want to identify the Green Climate Fund board member(s) that represent participants’ region or country, which can be found here: http://gcfund.net/?id=10. More information about the architecture, meetings and documents of the GCF can be found at http://gcfund.net Slide 46 – Pressing issues related to the Green Climate Fund There are a number of pressing issues and critical questions that need to be answered to determine whether or not the Green Climate Fund will be a fair and effective channel for climate finance. Many of those are presented in Slides 44 & 45. You can delve deeper into issues that you think are most relevant to your audience and their experience and level of interest. The private sector facility is one of the most controversial features of the Green Climate Fund. Opposition to the facility was based on the following public funds from the GCF should not be used subsidize investments of private corporations in climate projects which are aimed at generating profits climate activities to be supported by the GCF should be public and/or publicly accountable the GCF should not be involved in risky and highly speculative financial instruments 11 MODULE #1 – What is Climate Finance? the role of the private sector must be decided, managed, and regulated at the national and subnational levels in line with countries’ preferences and needs. There will be a strong push for regulatory policies and mechanisms to restrict or limit the private sector facility. Slide 47 – Pressing issues related to the Green Climate Fund (cont.) There are a number of pressing issues and critical questions that need to be answered to determine whether or not the Green Climate Fund will be a fair and effective channel for climate finance. Many of those are presented in Slides 44 & 45. Suggested discussion (15 mins): which of these unresolved issues is most relevant or important to your work, struggles, organizing or advocacy? What are some initial ideas about how to work on those issues? Are there some potential collaborations among participants on certain issues or targets? Capture those points on flip chart paper and perhaps send those out to participants as ‘next steps.’ Slide 48 – transition to sources of climate finance Slide 49 – Sources of climate finance These criteria for assessing fair and effective sources of climate finance were developed through consultation and collaboration with groups, social movements and NGOs that take a justice approach to the issue of climate finance. You can present the criteria or have participants read them aloud, and discuss if they agree with these criteria and/or would add additional criteria. Slide 50 – Sources of climate finance (cont.) This is a list of the some of the most popular proposals for innovative sources of climate finance. You as the facilitator can present each source briefly, or you could go around the room having each participant read one paragraph from the innovative sources of climate finance description worksheet. Allow people to ask questions about each source if you or other members of the group have the expertise to answer. If not, work from the information available in the descriptions, but direct people to further resources, like Wilks’ paper (see reading list). Small group activity (25 mins): Divide participants into small groups. Have each group work together to rate each proposed source of climate finance according to the principles discussed in the previous slide (add principles if you like). Come back together and discussion as a group which principles were rated highest. Talk about similartiies and differences in groups’ assessments. Slide 51 – remaining questions As you close the session, draw out and summarize main points of discussion. You may want to have this as a pop-corn style discussion for 5 minutes, or present these as a slide or on flip chart paper. Note that there are big questions that this session did not answer. Slide 52 – Wrap-up & Evaluation Read evaluation questions out loud and allow sufficient time for participants to give feedback on the session – both content and format. Perhaps use popular education tools like “+ Delta” (what you liked, what you would change). If appropriate, ask the group to list any follow-up or next steps. Slide 53 – Thank you! Thank the participants for their time and engagement. Thank you for facilitating this session! 12 MODULE #1 – What is Climate Finance? We would love your feedback, or any feedback from participants you would like to pass on. Please contact Janet at [email protected]. Annotated reading and resources list Reyes, O. (Ed). (2012). “Introduction: Understanding Private Climate Finance” in Understanding Private Climate Finance: A Critical Reader. http://climatemarkets.org/?page_id=693 A clear and concise introduction to the issues at the center of debates on climate finance right now what climate change means for the financial sector, and what financial opportunities financial markets, private banks and investors see in relation to climate change – a brief history of how we arrived at this moment, and some of the political implications. Singh, K. (2012). “Fixing Global Finance: Recent Trends in International Finance and Developmental Implications” in Understanding Private Climate Finance: A Critical Reader. http://climatemarkets.org/?p=1147 The starting point in any discussion on global financial reforms should be an assessment of key developments that has shaped the global financial system (or rather “non system”) over the past few decades. These developments will help in understanding the nature and dynamics of rapidly changing landscape of global finance. Heinrich Böll Stiftung and Overseas Development Institute, Climate Finance Fundamentals, http://www.boell.org/web/index-686.html This series of 11 short introductory briefings looks at various aspects of climate change financing. It is meant to give readers unfamiliar with the global discourse about funding for climate action a better understanding of financial flows, the regions and countries they reach, and the climate interventions they target. Araghi, F (2010) “The End of ‘Cheap Ecology’ and the Crisis of ‘Long Keynesianism’”, Economic and Political Weekly, http://www.indiaenvironmentportal.org.in/files/Cheap%20Ecology.pdf This article argues that a crisis of “negative Keynesianism” is leaving the World Trade Organization, the International Monetary Fund and the World Bank with no solution other than transferring the costs to the South (and to the South within the North). It suggests that climate financing under the auspices of the UNFCCC is following the same path. Buchner B. et al. (2012) The Landscape of Climate Finance 2012, Climate Policy Initiative, http://climatepolicyinitiative.org/wp-content/uploads/2012/12/The-Landscape-of-ClimateFinance-2012.pdf An assessment of the current status of the climate change-related finance, mapping various flows including sources of finance, intermediaries involved in distribution, financial instruments, and final uses. It builds on a 2011 study of the same name, http://climatepolicyinitiative.org/wpcontent/uploads/2011/10/The-Landscape-of-Climate-Finance-120120.pdf Equity and Ambition Group, Climate Justice Briefs, http://whatnext.org/resources/Publications/Climate-justice-briefs_full-setA4.pdf A series of 12 briefings on various topics spanning the scope of discussions at the UNFCCC, including papers on climate debt, international climate finance, the World Bank, REDD and carbon markets. IPS, CRBM et al. (2010) Climate Finance Sources: a discussion paper, http://www.noburn.org/downloads/global%20climate%20fund%20discussion%20paper.pdf This short paper details the criteria that progressive civil society groups consider necessary to 13 MODULE #1 – What is Climate Finance? introduce a global finance regime that will help lead to climate justice. Governments of richer countries have accumulated a climate debt to the rest of the world that they must repay. The paper provides an initial assessment of the strong and weak points of some of the most promising proposals. None are perfect, but all have the potential to contribute useful new sources of funding. Climate Finance and Markets, www.climatemarkets.org The Sustainable Energy and Economy Network is a project of the Institute for Policy Studies, a community of public scholars and organizers linking peace, justice, and the environment in the U.S. and globally. It works in partnership with citizens groups in the USA and globally, with a particular focus on energy, climate change, environmental justice, gender equity, and economic issues, particularly as these play out in North-South relations. Climate Finance Page, Heinrich Böll (North America), http://www.boell.org/web/140.html The Heinrich Böll Foundation is an international policy network and think tank part of the Green political movement that has developed worldwide as a response to the traditional politics of socialism, liberalism, and conservatism. Its main tenets are ecology and sustainability, democracy and human rights, self-determination and justice. Climate Funds Update, www.climatefundsupdate.org A joint initiative of the Heinrich Böll Stiftung and the Overseas Development Institute (ODI). This website profiles the growing number of international climate finance initiatives designed to help developing countries address the challenges of climate change. It includes data on bilateral and multilateral funds, as well as a series of useful briefings and reports. 14