Effectiveness of Climate Change Aid Questioned

Faced with a warming planet, Switzerland has been investing in artificial snow-making machines. The city of Venice, Italy, is spending $3.8 billion to protect itself from rising seas. But in Cambodia, villagers can only pray for rain.

Climate change “is a problem created because of the economic growth and lifestyle of rich countries,” said Sunita Narain, the director of India’s Center for Science and the Environment.

“Poor people are victims of a problem they did not create,” said Narain, who visited Cambodia last month as part of a delegation from the Swedish climate change commission.

There seems to be a growing moral consensus that rich countries, responsible for most environmental damage, must help poorer countries—which stand to suffer the most drastic consequences—cope with climate change.

But many say that even though more money is coming online, the mechanisms to deliver such aid are flawed.

In the past year, four new global funds have been set up, which could together provide $1.1 billion to help the developing world adapt, according to a May study by Katell Le Goulven, a researcher with the Commission on Climate Change and Development, a new group funded by Sweden’s Ministry of Foreign Affairs.

That’s four times what the Global Environment Facility, the main channel for climate change funding, has spent over the past seven years, according to Le Goulven.

Critics argue that funding re­mains woefully inadequate. Recent assessments have pegged global climate change adaptation costs at $4 billion to $109 billion per year, Le Goulven said.

Many also say the institutions set up to deliver such funds are inefficient and point to fundamental de­bates over how climate change as­sistance should be structured: Should such aid be distinct from general development assistance? Should assessments be voluntary or mandatory?

In its latest Human De­velop­ment Report, released in Cam­bodia to­day, the UN Develop­ment Pro­gram calls the current framework for climate change assistance “the equivalent of an aid sponge for mopping up during a flood.”

Unchecked, climate change will widen the already growing chasm between the world’s rich and poor, potentially breeding “mass resentment and anger,” and creating long-term global security problems, the UNDP said in its report.

Writing in the UN report, Nobel Peace Prize laureate Desmond Tutu, the Archbishop Emeritus of Cape Town, South Africa, said, “We are drifting into a world of ‘adaptation apartheid.’”

Efforts to establish an international framework to help poor nations cope with climate change date back to 1992. That year, the UN Framework Convention on Cli­mate Change was created, under which rich nations pledged to help developing countries pay for the cost of adaptation.

Critics say that little has happened since.

By mid-2007, multilateral financing for climate change in the developing world totaled $26 million—the equivalent of one week’s spending on flood defense in the UK, ac­cording to the UNDP.

Looking forward, $279 million has been pledged to help poor countries adapt. Of that, $160.4 million has been delivered, and just $26 million actually disbursed, ac­cording to UNDP. Most of that money comes from voluntary contributions.

General development assistance is not picking up the slack, according to UNDP. A review of two-thirds of all international development assistance showed that less than 0.2 percent—$94 million over five years—covered projects that explicitly dealt with climate change, UNDP said.

Tin Ponlok, Cambodia’s national project coordinator for climate change at the Ministry of Environ­ment, said he is waiting to see the promised funding.

“The funding is not here. There are many channels, but they are all dry,” Tin Ponlok said. “Most mon­ey is used for planning, design and consultants. There’s not much available for work on the ground. This trend needs to be changed.”

GEF money can only be used to pay for the “incremental cost” of climate change; it’s not supposed to fund general development projects.

“How do you find what is the ex­act amount that contributes to the global environment?” Tin Ponlok asked, adding that what Cambodia needs most is basic development.

That basic development could in turn help the poor withstand climate change; give a farmer irrigation, the argument goes, and he can better survive frequent droughts.

Experts say Cambodia won’t suffer as much as some small island nations, which even now are vanishing as the sea level rises.

But Cambodia’s farmers, many of whom live on the edge of subsistence, have little protection from droughts, floods and extreme weather events—just the sort of thing many believe will become more common as the planet warms up.

Narain said the farmers she met in Kompong Chhnang prov­ince’s Ailak village could soon face an even more treacherous future.

“It’s already tough for them to cope. With climate change, it’s going to get tougher. We need to do something quickly,” she said.

At the moment, however, adaptation aid is subject to a welter of conditions, Tin Ponlok said. The application process is bewildering enough to require pricey outside help—international consultants cost upwards of $500 a day—and aid awards are stilted by institutional politics, he said.

“You give this amount for developing countries, and 70 to 80 percent goes to international consultants. Little goes to the field. You have a nice report. So what? It has no impact,” Tin Ponlok said.

“In Cambodia, basic needs are so evident, why do we really need to spend so much on assessment?” he said. “When you see someone starving, do you really need to do an assessment? Just give them food.”

Gernot Laganda, UNDP’s re­gional technical adviser for climate change adaptation, said by e-mail from Bangkok that UNDP works closely with local governments in all its aid projects.

“A government therefore has a clear responsibility to contribute to the shape of a climate change adaptation project and ensure a positive impact on the country,” he wrote.

He added that GEF-funded projects attempt to “climate-proof” development. “Climate Change Adaptation projects are an ap­proach to ‘do development better’ by ensuring that today’s development investments are resilient to to­morrow’s changes in environmental and climatic conditions,” he wrote.

Aid aside, there have been some private sector efforts to help.

Ivo Menzinger, managing director for risk management at Swiss Reinsurance Company, said the in­surance sector, which awakened early to the threat of climate change, has created some instruments to help the poor mitigate weather risk.

In Africa, Swiss Re has been working with renowned economist Jeffrey Sachs’ Millennium villages to provide early drought relief. Food aid is triggered by changes in rainfall; that way villagers can get help before a disaster strikes and they have to sell their last cow. “You win time,” Menzinger said of the initiative.

In India, hundreds of thousands of farmers have bought state-subsidized weather insurance, which has helped them get loans from banks for fertilizer and seeds, he said. If a crop fails, the insurance company will make good on the loan.

So far, Cambodia has no insurance schemes to tide farmers over bad weather conditions, according to Tin Ponlok. To him, weather insurance in Cambodia seems a far prospect; he, like many Cam­bodi­ans, doesn’t even have car insurance.

“The insurance market is not mature, even for traditional businesses,” he said.

UNDP says such insurance ar­rangements are of limited utility globally. For one thing, as risk goes up, so do insurance premiums, making it un­likely that those who really need help—chiefly, poor farmers in high-risk areas—will be able to afford it. For another, such policies can create perverse incentives, encouraging farmers to let crops fail and de­clare losses if prices are too low, UNDP said.

Narain has a different suggestion for the developed world: Consume less.

“The world is realizing for the first time there are limits,” she said.

“If everyone wants to consume like the Americans, there’s not going to be enough.”

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