1 41st Annual Meeting of the Board of Governors of the Caribbean Development Bank May 2011, Port of Spain SEMINAR ON CLIMATE CHANGE UNLOCKING CLIMATE CHANGE FINANCING – CONSTRAINTS AND OPPORTUNITIES Presented By Mr. Selwin C. Hart

Building BlocksOutcome 1. Shared Vision and a long term global goal Long term global goal < 2C Review of adequacy by C? 2. Mitigation Targets Deferred to 2011 Transparency addressed 3. Adaptation Adaptation Framework & Committee Loss and Damage work program 4. Finance Green Climate Fund; Transparency on Fast Start Funds; Standing Committee 5. Technology Development Institutional Framework agreed 6. Capacity Building Institutional Framework Deferred 7. Legal Form Deferred 8. Future of the Kyoto Protocol Deferred Overview of the Current Climate Change Negotiations The Cancun Agreements (2010)

3 OutcomeDetails 1. Fast- Start Finance Developed countries re-commit to provide $30 billion between with priority for LDCs, SIDS and Africa and balanced between adaptation and mitigation Transparency on access 2. Green Climate Fund Under the guidance and accountable to the COP 24 Member Board (12 developed and developing countries with representation from SIDS and LDCs) 40 Member Transitional Committee (TC) to design this Fund before COP-17 in Durban (Dec.) Interim Trustee – World Bank 3. Standing Committee To assist in improving coherence and coordination among different finance channels and the MRV of finance Roles and functions are to be further defined 4. Long-Term Financing Sources Report of the UNSG’s Advisory Group on Finance noted No agreement on a way forward Finance Outcomes

4  Under-financing- Developed countries have failed to honour their commitments under the Convention to assist the most vulnerable – There is a huge gap between what is needed, what will be needed in the future, and what is presently available.  Insufficient financing and investment for concrete adaptation and mitigation projects and activities – Many plans little support.  Burdensome criteria associated with accessing available sources of financing  Absence of tools to measure the true economic costs associated with adaptation  Size matters– Small markets represent a barrier to the mobilization of private investment  High vulnerability to external economic shocks –e.g. food and energy crises and natural disasters which can immobilize an entire State  Limited access to domestic resources in SIDS  Climate change represents an additional challenge to the developmental aspirations of SIDS  Limited capacity in SIDS Financing Challenges Faced by SIDS

1.Responsive and sensitive to the need of developing countries esp. SIDS and LDCs; 2.Address the historical imbalance in allocation of support between adaptation and mitigation; 3.Enhance implementation of concrete action on the ground esp. on adaptation 4.Adopt processes and project cycles that do not place an undue burden on developing countries. 5.Ensure simplified and direct access to financing 6.Implement strategic prioritization of financial resources for the urgent and immediate needs of developing countries that are particularly vulnerable to the adverse effects of climate change, especially LDCs and SIDS. 7.Environmental integrity - projects funded by the GCF should result in net emission reductions and assess how projects contributed to global emission reduction goals; 8.Be a major player and be instrumental in rationalizing and harmonizing the universe of Climate Change financing; 9.Mobilize and leverage unprecedented amounts for climate action (USD100bn and more) from various sources, but in the same time ensure predictability and sustainability of resources 5 Expectations for the GCF

Held its initial meeting in Mexico City April Agreed that the TC will be chaired by Mexico, South Africa and Norway The TC also agreed that it would organize its work in four work streams to be facilitated by a developed and developing country as follows: – WS1: Scope and guiding principles: Spain and Barbados –WS2: Governance and institutional arrangements: Switzerland and Democratic Republic of Congo –WS3: Operational modalities: Australia and Pakistan –WS4: Monitoring and Evaluation - Sweden and Bangladesh Agreed on the configuration of its support Unit which is staffed by representatives from the UNFCCC, IFIs, UNDP, GEF, UNEP, Regional Development Banks 6 Work of the Transitional Committee

7 Fast – Start Financing CountryCommittment (USD million)Period Australia Canada EU (incl. EC USD 211 million) Iceland Japan New Zealand Norway Switzerland US Total29,

8 Fast Start Financing Pledges

9 Fast Start Financing – New and Additional

FSF should not set a bad precedent for LTF: new and additional, access, priority, balance. No evidence to suggest that priority access is being given to the most vulnerable (SIDS, LDCs, Africa) or that countries are seeking to ensure a balanced allocation of these funds between adaptation and mitigation. use of a lack of information provided so far by developed countries. Access to FSF is opaque as the major part flows through bilateral channels and there are no agreed or standardized procedures to apply for these funds, mostly developed countries distribute them at their discretion. 10 Fast Start Financing

Caribbean Countries should: – intensify efforts at accessing and utilizing available financing through bilateral sources and existing institutions e.g. Adaptation fund; –Improve information flow between Ministries on the availability of financing; –Better integrate climate change considerations in sectoral planning –Intensify engagement in the ongoing climate change negotiations including finance and planning ministries CDB –Work with borrowing members on the above –Become engaged in the ongoing work of the TC to design the Green Climate Fund; as well as the ongoing negotiations in the UNFCCC –Seek to become the main conduit for providing climate finance to the region. 11 Conclusion