Climate Change Financing : The Concept of Additionality in the Light of the Commission Proposal for a Development Cooperation Instrument (DCI) for 2014-2020

Badanie 06-07-2012

Due to considerable overlaps between development and climate finance and the danger that funding is diverted from existing development assistance it would be important to define a baseline against which additionality can be measured. So far, no internationally agreed definition exists. The EU could step forward and come to a common approach even if this might temporarily disadvantage Member States under the current reporting practice. Any such definition should build on the commitment to raise ODA levels to 0.7 % of GNI by 2015. Although incentives are strong to try and count in as much private finance as possible, climate finance should come predominantly from public sources. Especially instruments using public funding to “leverage” private funds should be seen with caution. The funding commitments can be met, but they will likely require a wide range of innovative instruments for new financing to be put in place. Due to the overlaps, climate and development activities should be integrated as far as possible at the operational level. Despite a considerable increase of climate related financing in the proposal for the new instrument for Development Cooperation, it is not clear as to what extent these funds are additional. Therefore, additionality of climate finance should be clearly defined also in the DCI regulations.