Climate Finance: Opportunities and Challenges and Ireland’s contributions to global climate finance Georgina Hughes-Elders Department of Public Expenditure & Reform Irish Aid Workshop - Climate Change and Development 10 April 2014

Outline of Presentation What is climate finance? International climate finance commitments Fast-Start finance (2010 – 2012) Beyond Fast-Start Finance (FSF) (2013 onwards) - Opportunities and Challenges Other potential sources of climate finance Future challenges Future negotiation challenges

What is climate finance? In simple terms Climate Finance could be considered to be: “financial flows from developed to developing countries to cover the additional costs associated with climate change adaptation and mitigation.”

International Climate Finance commitments At the UNFCCC climate conferences in Copenhagen (2009) and Cancún (2010), the European Union and other developed countries pledged jointly: to provide US $30bn in Fast Start Finance (from public funds) over the years 2010 to 2012, and in the longer term to mobilise US $100bn a year by 2020 from a variety of sources: public, private, bilateral, and multilateral, including alternative sources, to help developing countries deal adequately with climate change.

Role of Government Departments Department of Environment, Community & Local Government lead on climate policy and interaction with EU and International climate processes Contributions to climate finance from Ireland has traditionally come from Irish Aid (ODA), D/Environment and D/Agriculture – other Departments may also have relevant expenditure that has not yet been reported Department of Finance lead on tax policy and hold many of the levers for mobilising potential flows of private climate finance Department of Public Expenditure & Reform currently report on Ireland’s Exchequer-based climate finance returns through ECOFIN formation

Reporting of climate finance EU Monitoring, Measuring and Reporting (MMR) Regulation Under the current MMR regulation Member States must report their climate finance contributions to the Commission biennially (2013, 2015, ….) UNFCCC Monitoring, Measuring and Reporting (MRV) Regulation Parties to the UNFCCC must submit biennial reports on their climate finance contributions to the UNFCCC Secretariat (by Jan 1 2014, 2016, …)

The need to plan… There is a need to plan for the fiscal and budgetary implications flowing from commitments made under the UNFCCC process to contribute to international climate finance goals. During its Presidency of the EU in 2013 Ireland largely drafted the submission on “Strategies and Approaches of the EU and its Member States for mobilising scaled up climate finance towards the developed countries’ goal to jointly mobilise UD$100bn”. The EU and its Member States are due to submit an update of that submission to UNFCCC in September 2014.

Fast-Start Finance (FSF) (2010 – 2012) Ireland’s FSF experience: Despite challenging economic conditions, Ireland met its voluntary pledge of up to €100m over the FSF period from a combination of direct contributions and through climate-relevant ODA expenditure. Ireland’s contribution to FSF was made up entirely of grant-funding from ODA and contributions from D/ECLG and D/AFM. Over 95% of Ireland’s FSF contributions were for climate adaptation activities.

Beyond Fast-Start Finance (FSF) - Challenges and Opportunities Moving on from FSF: While Ireland has aspired to maintain its climate finance contributions at up to FSF levels, in current circumstances Ireland’s capacity to use public funds for climate finance is constrained. Ireland must identify all existing flows of climate-relevant Exchequer finance from Government Departments/Agencies to build up an accurate picture of Exchequer-supported flows of climate finance. Definitions may tighten which could add extra pressure Energy sector is comprised of power generation, oil refining, peat briquetting, and fugitive emissions

Beyond Fast-Start Finance (FSF) – Challenges and Opportunities Private finance While acknowledging the continued role of public climate finance, there is a need to identify other sources of climate finance going forward. Research suggests that globally the levels of private climate finance flows outweigh public climate finance flows.

Beyond Fast-Start Finance (FSF) – Challenges and Opportunities Some Member States are putting systems in place to measure private climate finance which is being mobilised by the State It is important that structures are put in place domestically to identify: the level of private climate finance flows from Ireland; how the State currently leverages, mobilises, catalyses or facilitates private sources of climate finance; how the State could leverage, mobilise, catalyse or facilitate further levels of private climate finance

Other potential sources of climate finance Examples of what some other countries report Provision of fire-fighting cars and extinguishing equipment to China - €9.57m Provision of funding for representatives from developing countries to attend a conference on Sustainable Mountain Development - €0.2m Granting of scholarships for students from developing countries who study in the field of environment and land protection, ecology and environmental sciences - €0.11m Construction of a modular school in Macedonia - €0.5m Contribution to Montreal Protocol – Multilateral Fund (HFCs) - €36.45m Contribution to Global Environment Facility (33% of the country’s overall allocation to GEF) - €14m

Other potential sources of climate finance - Ireland Possible role of Irish tax-code measures? The role of Irish tax-code measures in facilitating private climate finance flows has not yet been determined. Can we build a picture of what Ireland is currently doing and can do in the future in this regard? Potential flows from Enterprise? There may be potential flows from enterprise, both domestic and MNCs, in Ireland. Can we build a picture of such flows from Ireland?

Other potential sources of climate finance - Ireland Contributions to multilateral institutions Many countries count a proportion of their core contributions made to World Bank, EIB, EBRD, Global Environment Facility, UNDP, UNEP, FAO, etc. Can we build a picture of what Ireland contributes to relevant multilateral institutions across all Government Departments/Agencies?

Other potential sources of climate finance - Ireland Government funded/part-funded research? Many countries count climate-relevant research carried out by Government Departments/Agencies. Research areas could include: Agricultural research Sustainable transport Sustainable energy, energy efficiency, energy efficient technologies, etc. Smart cities research Health related research Can we build a picture of what Ireland does in this regard?

Other potential sources of climate finance - Ireland Non-monetary flows? Ireland contributes to climate actions in developing countries in the form of non-monetary flows, e.g. research or human capital. Can we build a more detailed picture of what Ireland does in this regard and identify methods to quantify/monetise such non-monetary supports? Green Trade Missions There is a need for a greater focus on green growth/ enterprise in trade missions to developing countries. Can this concept be developed for Ireland’s trade missions?

Other potential sources of climate finance - Ireland Hosting of conferences/events on climate change Many countries count conferences/seminars on climate change funded by their Government/ Agencies towards their climate finance contributions Can Ireland do likewise? Potential flows from Education sector? Some countries count the cost of courses/ research/scholarships on climate-related topics run by their domestic Universities Can we build a picture of what Ireland does in this regard?

Future challenges… Limited Public Budgets Need to establish the full extent of current Exchequer flows from all Government Departments/Agencies and ensure appropriate monitoring/tracking of such flows. Need to identify ways to quantify/monetise non-monetary climate change supports (e.g. Human capital).

Future challenges… Need to identify relevant existing private climate finance flows and establish the role of Government in supporting such flows. Need to identify actions/measures that can mobilise/ leverage/catalyse/facilitate private climate finance flows. Need to implement appropriate methods for measurement and tracking of private climate finance flows.

Future negotiation challenges 2030 Climate and Energy Package 2015 international agreement

Thank you