From poverty to power - Oxfam-Québec

FROM POVERTY TO POWERunless the worst-hit countries – already strapped for cash – receiveinternational compensatory financing, fighting climate change willstymie long-term efforts to reduce poverty. Equally, unless adaptationfinancing is additional to international aid commitments needed toachieve poverty reduction goals, developing countries will be unableto address both challenges.Who should pay, and on what basis? The UN Climate Convention’sprinciple of ‘common but differentiated responsibilities and respectivecapabilities’ (Article 3.1) provides a guide that still holds valid.Assuming that countries that are both responsible for producingexcessive emissions and capable of providing assistance should bearthe costs, Oxfam has developed an ‘Adaptation Financing Index’ as anindication of what each country should pay. On this basis, Oxfam hascalculated that the USA, the EU, Japan, Canada, and Australia areresponsible for over 95 per cent of the financing needed. It estimatesthat the USA is responsible for over 40 per cent, the EU for over30 per cent, and Japan for over 10 per cent. Within the EU, the top fivecontributors to adaptation financing should be Germany, the UK,Italy, France, and Spain. 221The international climate regime must become a strong andorderly global system to address both adaptation costs and the mitigationof carbon emissions. Rich countries have so far pledged a mere $250mto international funds for developing-country adaptation – less than0.5 per cent of what is needed. 222 Even the most promising new sourceof funding, the Climate Change Adaptation Fund, which will fundadaptation measures in developing countries, initially with fundsfrom a 2 per cent levy on carbon credits generated under the CleanDevelopment Mechanism (CDM), discussed below, is only expectedto raise another $80m–$300m annually from 2008–12.While the Adaptation Fund could become the primary channel fordirecting resources for adaptation in developing countries, its fundingbase needs to be massively expanded in order to meet the scale of need.One approach that is consistent with incentives to reduce emissions isto earmark proceeds from the auction of emissions permits in domesticcarbon markets, such as the EU Emissions Trading Scheme or similarmarkets proposed in the USA and Australia. Germany announced itsintention to set aside more than a quarter of proceeds for adaptation410