2 June, 2008 European Development Cooperation and Climate Change EDC2020 Leo Peskett, ODI

2008 – 2020: A critical period for climate change and climate policy processes? ….2009 – Copenhagen COP15 ….European 20/20/20 climate policies … Kyoto 2? ….New and deeper climate policies? Biofuels? Carbon markets? Technology transfer? ….increasing impacts of climate change policies on developing countries? …between 75 million and 250 million people in Africa are projected to be exposed to increased water stress due to climate change (IPCC2007) …In some countries, yields from rain-fed agriculture could be reduced by up to 50% by 2020 (IPCC2007) ….Last chance to stabilise temperatures below the critical 2 degrees Celsius threshold? Policy processes Climate impacts

Project Objectives Overall: Investigate synergies and trade-offs between climate change and development policy processes Taking stock of existing linkages between European CC and development policies Horizon scanning to build a better picture of emerging challenges Action research to track evolution of certain policy processes Understand more about the drivers of climate change and development policy making in Europe Inform future policy making and priorities for action in the EU

Project themes Initial scoping of thematic areas: Europes role in emerging climate finance for developing countries European climate change partnerships with China and India Implications of European domestic CC policy for development cooperation Why these three themes? Cover issues relating to climate change mitigation and adaptation High profile issues in the climate change negotiations over the next three years and of huge imprtance over next 12 years Strong links to development agendas, but cover both links between domestic policy processes and their developmental implications; and the development and external relations agendas Strong links to other research packages

Europes role in emerging climate finance for developing countries Context: Estimates of figures of $20-80 billion per year estimated as needs for adaptation in 2030 Large new funds emerging to support developing countries to adapt to climate change Rival traditional aid flows SourceCurrent scale (per annum) Estimated future scale (per annum) Adaptation Fund$36 million$ million by 2012 Carbon markets with direct benefits for developing countries $3 billion$100 billion (2020?) Forest carbon markets<$0.1 billion$ billion (post 2012) Recently launched environmental funding Japan: $10 billion Norway: $2.3 billion UK: $1.5 billion WB: $12 billion (inc. from bilaterals above) ? 1.Will climate finance and ODA be conflicting or synergistic? 2.Where does, and should, Europe sit in relation to other (multilateral and member state) funding initiatives that support developing countries on climate change? 3.Are multiple initiatives a problem or part of the solution? 4.What constitutes effective finance for adaptation to climate change? 5.Coherence on adaptation support between member states

Climate Change partnerships with China and India 1.What is driving the CC partnerships with China and India and how is the agenda set? 2.How do they relate to other agendas, with these countries; trade etc? 3.How do partners feel about cooperation with EU in this area? Is there any learning from their cooperation with other bilaterals? 4.How can these partnerships evolve in the next few years? Context: Two existing partnerships established under the UK presidency in 2005 Aim to assist in building capacity on climate change and building political will and collaboration in the bilateral context China, in particular is already a large GHG emitter

Implications of domestic policy choices for development cooperation: forest carbon and biofuels Context: Currently a big debate about integrating emissions reduction credits from reduced deforestation and degradation (REDD) in future carbon markets Huge potential financial flows to developing countries ($2-30 billion per year) Poverty reduction benefits? Ongoing debate about inclusion of forests within the EU Emissions Trading Scheme (ETS) How have development concerns featured within the evolution of these policies? Where are the risks and benefits for developing countries? How is policy coherence dealt with at country levels? Global GHG emissions by sector WRI 2008

Thank you! And feedback on themes to look at would be welcome