Germany’s International
Approach to Climate Change
Spotlight on Africa
2
Contents
4 Foreword by the Federal Ministers
6 Germany: A reliable partner for climate protection
10 Germany’s fast start commitment in Africa
12
Project examples
16 Reducing emissions: Creating a sustainable economy, limiting climate change
The MENA region – energy as an economic sector
20 Sub-Saharan Africa – expanding the carbon market
21 Thailand – strengthening climate policy
18
22 REDD+: Reducing emissions from deforestation and forest degradation
24 Brazil – conserving forests, climate and biodiversity
26 Adapting to climate change: Responding to its impacts
Pacific island countries – protecting coastlines and water resources
30 India – substantial need for action in rural areas
31 Ghana – innovative insurance schemes for climate change adaptation
28
32 International climate financing: Innovative instruments
34 Multilateral cooperation: The German contribution
35 Abbreviations
36 Imprint
Dr.NorbertRöttgen
Federal Minister for the Environment,
Nature Conservation and Nuclear Safety
DirkNiebel
Federal Minister for Economic Cooperation
and Development
Foreword by the Federal Ministers
Climate change, with its far-reaching effects, has
become one of the greatest challenges facing
mankind today. More frequent natural disasters
and weather extremes, increased water scarcity,
inundated coastal zones and the accelerating
extinction of species are just some of the immediate impacts felt in developing and industrialised
countries.
It has become clear that the costs of inaction will
by far exceed the costs of climate protection. A key
issue to be addressed in the international climate
process is the question of how to fund climate
action in the developing countries, i.e. mitigation
of climate change by reducing greenhouse gas
emissions and adaptation to its impacts. It is down
to all of us – governments, industry and every individual – to take urgently needed action to avert
the worst impacts of climate change and limit
average global warming to two degrees Celsius.
But we need this action now - because time is
running out.
In Copenhagen the international community
agreed in principle on additional fast start financial support for developing countries. This pledge
was reaffirmed at Cancun. Fast start financing
enables developing countries to implement the
measures needed to reduce emissions and adapt
to the changes in climate already taking place,
while also making progress in economic and social developments.
The investments needed in developing countries
for climate change mitigation and adaptation
can only be effectively deployed if they are made
an integral part of their sustainable national
development strategies. The challenges of climate
protection in developing countries will have
major impacts on their infrastructure developments (energy and water supplies, urban development, mobility, disaster control management),
their agriculture, forestry, and health care sectors.
National development policies must therefore
be aimed at the necessary transition towards lowcarbon and climate-resilient economies.
However, the developing countries need assistance from the international community to
achieve this objective. Today, development
policy and international climate policy alike are
based on shared responsibilities and mutual
ForewordbytheFederalMinisters
commitments by the partner countries. The concepts of international cooperation must therefore
take account of the partner countries’ own strategies and support them in a coherent and coordinated manner.
For many years Germany has been one of the
major donors to climate protection action in developing and newly industrialising countries. In
recent years the German Government has systematically stepped up its climate commitments in
the developing world. In 2005 Germany's climate
protection investments amounted to 470 million
euros. However, within only seven years, these
almost tripled to an amount of more than 1.2 billion euros annually (planned for 2011). This sum
includes the German Government’s share of
the commitment made by the industrialised countries in Copenhagen and Cancun to provide fast
start funds to the amount of 1.26 billion euros for
climate protection measures in developing countries for the 2010 –2012 commitment period.
In Germany, the financial resources needed to
cover this pledge are partly generated from the
auctioning of emission certificates, a new and
innovative financing mechanism. Emissions trading revenues are additional funds which are not
paid by the taxpayer but by the polluters.
In 2011 the German Government makes available additional funds for international climate
protection through the recently created Energy
and Climate Fund, which is a separate fund in
the Federal Budget. It is also financed through
emission trading revenues. These are expected to
Dr.NorbertRöttgen
Federal Minister for the Environment,
Nature Conservation and Nuclear Safety
5
increase considerably over the next few years.
In 2011 alone it will be possible to make additional
funding commitments available for climate
relevant measures in developing countries to an
amount of nearly 505 million euros. This innovative source makes Germany well-prepared to
deliver long-term financing.
Moreover, Germany will continue to increase its
investments in international climate protection,
also with a view to longer-term financing needs.
The funding is provided by both the Federal
Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for the
Environment, Nature Conservation and Nuclear
Safety (BMU). Both ministries support activities
undertaken in their partner countries to reduce
emissions, adapt to the impacts of unavoidable
climate change, and the conservation and sustainable management of natural carbon sinks.
The international community will meet in Durban
to agree on the next steps for an effective international climate architecture. Germany supports
South Africa in its endeavour to organise a successful UN Climate Change Conference on the
African continent.
All countries all over the world have to embark on
a climate-compatible development in the future.
A reliable global framework is indispensable as
guidance for national, regional and international
action – it is our responsibility to make this happen. The key to successful climate protection in
developing countries is a credible and transparent
commitment.
DirkNiebel
Federal Minister for Economic Cooperation
and Development
6
Germany:
A reliable partner for climate protection
A global challenge as significant as climate change
requires global action. The German Government
is continuing to work actively to forge a comprehensive international climate agreement which
aims to limit global warming to a maximum of
two degrees Celsius. The successful outcome of
the United Nations Climate Change Conference in
Cancun is still a powerful signal that the international community can indeed act collectively.
Now it is important to build on this success and
make further, gradual progress based on practical
operational decisions and procedural rules relating to the mitigation of climate change through
emissions reductions; adaptation to climate
change; reduced emissions from deforestation
and forest degradation (REDD+); technology
transfer; and , finally, the measuring, reporting
and verification (MRV) of climate mitigation action and finance. All the various country groups
must make tangible contributions in this context.
The German Government is actively driving the
international climate process with the following
three-pronged-approach: Germany is setting
itself ambitious national climate targets in order
to act as a role model, such as the target of reducing its greenhouse gas emissions by 40 per cent by
2020 compared with the baseline year (1990). It is
scaling-up its support for developing countries’
mitigation and adaptation efforts. It is providing
fresh momentum for the negotiations, for example through the Petersberg Climate Dialogues.
Climatefinancing
One of the most important issues in the current
climate negotiations is financing for mitigation
and adaptation measures. Developing countries
in particular need financial support. At the
conference in Cancun in 2010 the industrialised
countries reaffirmed the commitment they had
made in Copenhagen to provide new and additional resources to finance measures for combating climate change. Up to 30 billion US dollars is
to be made available for the period 2010 –2012
with a balanced allocation between mitigation
and adaptation. This fast start finance is designed
to kick start immediate action on climate change
in developing countries. In addition developed
countries committed to a goal of jointly mobilising 100 billion US dollars a year by 2020 to address
the climate needs of developing countries.
In Cancun, Parties established the Green Climate
Fund as a significant channel for the future delivery
of climate financing. They mandated a Transitional Committee with operationalising the Fund.
The Green Climate Fund should be enabled so that
it can play a catalytic role in assisting developing
Germany:Areliablepartnerforclimateprotection
7
Fig.1:Germany’scontributiontofaststartfinancing
Mitigation
Adaptation
REDD+
• Clean Technology Fund: 250 Mio €
• Pilot Program for Climate Resilience:
20 Mio €
• Forest Carbon Partnership Facility:
43 Mio €
• Adaptation Fund: 10 Mio €
• Bilateral projects: 51.9 Mio €
• EU/BMU-UNDP Capacity Building
Programme on Climate Change: 5 Mio €
• Bilateral projects: 128.4 Mio €
• Least Developed Countries Fund: 45 Mio €
• Special Climate Change Fund: 23 Mio €
• UNEP/UNDP/IUCN Ecosystem-based
Adaptation Flagship: 10 Mio € (under
preparation)
• Bilateral projects: 124.6 Mio €
Total:383.4Mio€
Total:232.6Mio€
Total:94.9Mio€
As at 31 August 2011.
countries in their efforts to pursue transformational low-carbon and climate-resilient development pathways.
Germany’sfaststartcommitment–additional
climatefinancing
Germany will honour its responsibilities: The
European Union is committed to providing an
additional 7.2 billion euros in total during the
period 2010 – 2012 as fast start financing in developing countries; of this figure, 1.26 billion euros
will come from Germany. The funding is made
available in annually increasing amounts (see
fig. 2). The German fast start funds are deployed
by the Federal Ministry for Economic Cooperation
and Development (BMZ) and the Federal Ministry
for the Environment, Nature Conservation and
Nuclear Safety (BMU) through multilateral and
bilateral channels, supporting activities in the field
of adaptation, mitigation and REDD+. At least 30
per cent, i.e. about 350 million euros, is currently
earmarked each for adaptation measures and
REDD+ projects.
Fig.2:ImplementationofGermany’sfaststart
commitment(inMio€)
0
2010
commited
As at 31 August 2011.
2011
planned
471
349
433
361.5
250
356
500
2012
These funds are provided over and above any
previous financing Germany made available for
international action on climate change. In other
words, the funds are additional to the climaterelated support already provided in 2009, as well
as sourced from innovative financing mechanisms, namely the auctioning of emission certificates in Germany.
For 2010, Germany pledged to provide 356 million
euros for fast start activities. It exceeded this target,
committing a total of 361.5 million euros (see
fig. 2). A total commitment of 433 million euros
is planned for 2011. As at August 2011, 349 million
euros had already been agreed.
Secureclimatefinancethroughinnovative
instruments
Germany uses the revenue from about 10 per cent
of the certificates sold under the European Union
Emission Trading Scheme for climate financing.
This produces roughly a third of Germany’s fast
start contribution. Instruments of this kind spread
the risks across several sources of finance and can
help to increase the reliability of climate financing. All certificates will be auctioned from 2013
onwards, with the additional revenue being used
for national and international climate finance
activities.
8
Starting in 2011, additional long-term funding
amounting to 505 million euros will be committed for international climate protection through
a new Energy and Climate Fund. These new
funds will be used to build upon existing climate
policy cooperation with developing and newly
industrialising countries, as well as to finance the
German Climate Technology Initiative (DKTI).
DKTI provides subsidised financing and grant
funds for technical assistance and promotes
the rapid diffusion of mitigation technologies;
promoting technology is linked with improving
the regulatory framework.
Fig.4:BreakdownofhowGermany’sfaststart
financewasallocated(in%)
13% REDD+
54% Mitigation
33% Adaptation
Total volume of Germany’s fast start finance until 31 August 2011:
710.9 Mio €
As at 31 August 2011.
Balanceduseofbilateralandmultilateral
fundingchannelsin2011
Germany uses bilateral and multilateral fast start
financing instruments consistently (see fig. 3).
Fig.3:BreakdownofGermany'smultilateraland
bilateralfaststartfinance(inMio€)
400
406
300
304.9
200
100
0
Multilateral
Bilateral
In 2011 Germany was able to significantly increase
fast start commitments in the area of adaptation;
currently 33 per cent of its fast start financing has
been allocated to the area of adaptation to climate
change. This is a marked improvement from 2010,
when only 21 per cent of the promised funding
was allocated to the area. On the other hand, major
efforts are still needed in the area of REDD+ if the
target allocation of at least 30 per cent (350 million euros) is to be reached by the end of the fast
start period in December 2012. Until the end of 2011
Germany will commit another 80 million euros,
of which a significant portion will be allocated to
REDD+.
As at 31 August 2011.
The funds channelled through multilateral institutions were made available through the Climate
Investment Funds, the Kyoto Protocol’s Adaptation
Fund, the Global Environment Facility, as well as
through the United Nations Development Programme and the United Nations Environment
Programme.
Breakdownbythematicarea–
adaptation,mitigationandREDD+
The challenge is to achieve a balanced distribution
of funds across the three areas of mitigation,
adaptation and REDD+ within the fast start period.
Bilateralfunds–geographicdistribution
isbalanced
German bilateral fast start funds support mitigation activities in all regions, with middle-income
countries being one of the priorities. REDD+
projects are being carried out predominantly in
Latin America. By contrast, adaptation to climate
change is being supported in the most vulnerable
countries in all regions, and both multilateral
and bilateral activities focus on least developed
countries.
Germany:Areliablepartnerforclimateprotection
Fig.5:GeographicdistributionofGermany’sbilateral
faststartcontribution(inMio€)
100
75
85.0
86.7
66.5
50
66.7
25
0
Africa
Latin America Others*
Asia
* Including global projects. All recipient countries are ODA eligible
according to OECD DAC (Organisation for Economic Cooperation
and Development /Development Assistance Committee) criteria.
As at 31 August 2011.
Financing–increasetransparency,facilitate
accesstoinformation
Access to information about how to apply for fast
start funding is of decisive importance for carrying out climate-relevant projects, particularly
those funded bilaterally. Germany provides information on bilateral cooperation opportunities
primarily through its diplomatic missions abroad.
In order to promote transparency of finance,
Germany provides information to the voluntary database of the REDD+ Partnership1 and through the
website of its International Climate Initiative (ICI) 2 .
Developmenteffectiveness–realisingresults
undercountryleadership
As African countries in particular are calling for an
accountable and effective country lead approach
to managing climate finance, German bilateral
cooperation works closely with partner governments, civil society and the private sector in establishing a sound policy environment, including
sound accountability frameworks for reporting
on results. On this basis, we not only strive to meet
local needs but also to support local systems, including country systems for planning and budget
implementation.
1
www.reddplusdatabase.org
2
9
Faststartfinance–outlookfor2012
Looking back at the first years of Germany’s fast
start financing activities illustrates some initial
lessons learned that are valuable for 2012:
• There is still a need to adjust the allocation of
funds by thematic area across the three areas
of mitigation, adaptation and REDD+. Germany
intends to take this into consideration when
selecting projects in the future and will draw
special attention to REDD+ projects.
• Fast start financing offers an opportunity to
implement innovative approaches to climate financing. Germany will incorporate the
insights gained here when finalising the details
for long-term financing.
• Transparency and easier access to information about fast start funding has proved to be
a key factor in its successful implementation.
Germany will therefore continue to upgrade its
communication tools. The international commitment to regular reporting offers a basis for
consistently evaluating and improving Germany’s fast start financing.
• Innovative financing sources can increase
the reliability of international climate finance.
In international negotiations Germany will
continue to advocate for this kind of financing
mechanism to be developed.
• And, importantly, development and climate agendas need to be closely integrated.
Fast start financing can help to create a nexus
between poverty reduction and adaptation/
mitigation. For example, cultivation methods in
agriculture that are adapted to climate change
contribute directly to poverty alleviation.
www.international-climate-initiative.com
10
Germany’s fast start commitment in Africa
Tunisia – Protecting coasts in response
to climate change
Mali – Implementing national
strategies for climate change adaptation
Ethiopia –
National plans for green growth
The Congo Basin – Protecting the climate through
conservation and sustainable use of forests
Mozambique –
Preventing and mitigating disasters
South Africa –
Development of a national climate policy
Germany’sfaststartcommitmentinAfrica
11
Since January 2010 the German Government has
committed fast start financing amounting to 710
million euros (as at 31 August 2011). Of this sum,
57 per cent is disbursed via multilateral channels,
while the remaining 43 per cent (305 million
euros) goes to bilateral projects. Africa is a focus
of funding: to date, 20 bilateral projects in the
continent have been approved, or 28 per cent of
the German bilateral fast start commitment up to
now.
Fig.7:BreakdownofhowGermany’sfaststart
financewasallocatedinAfrica(in%)
Fig.6:Africa’sshareofGermanbilateralfaststart
commitment(in%)
As at 31 August 2011.
28 % Africa
72 % Other bilateral
As at 31 August 2011.
4% REDD+
40% Mitigation
56% Adaptation
Specifically, the German Government works with
its African partners to promote climate change
adaptation as follows:
• Fostering the formulation and implementation
of adaptation strategies, including sectoral
strategies e.g. for water resources management
and agriculture, and their mainstreaming in
national policies and programmes.
Africa also benefits from the multilateral commitments. For instance, Niger, Mozambique and
Zambia are pilot countries within the Pilot Programme on Climate Resilience; besides, South
Africa, Morocco and other northern African countries are partners of the Clean Technology Fund.
Much the same applies to the Least Developed
Countries Fund and the Special Climate Change
Fund of the Global Environment Facility.
• Subsidising interest rates on loans for investment in adaptation activities, for instance in
flood protection or in agriculture.
Adaptation to climate change impacts is the
definite priority of German bilateral cooperation
with Africa. Adaptation projects are carried out
mainly in sub-Saharan Africa (excluding South
Africa). In contrast, cooperation in northern
African countries and in South Africa focuses on
emissions reduction. The Congo Basin region is
noteworthy for the cooperation projects under
way there to preserve carbon sinks, especially of
forests and other ecosystems.
In the field of emissions reduction, cooperation
concentrates on creating a conducive policy
framework for the expansion of renewable energies, and on investment in tangible renewableenergy and energy-efficiency measures. Furthermore, Germany provides technical assistance
and capacity buidling to promote the implementation of national climate policies.
• Developing and implementing innovative
insurance products to hedge against the financial risks in agriculture that arise from extreme
weather events and other consequences of
climate change.
12
Projectexamples
Ethiopia–
Nationalplansforgreengrowth
Ethiopia intends to put its economy on a sustainable and climateresilient path. Building on many years of partnership with Ethiopia,
the German Government supports this aim. For instance, in a
project receiving German funding, the partners are analysing
options and are developing an integrated national Low Carbon
Development Strategy (LCDS). Ethiopia is thus demonstrating how
an economy can be put on track towards green growth. The
experience gathered in the process will be presented and debated
in international forums and will thus inject fresh impetus to the
LCDS debate within the United Nations climate process.
The project is assisting the inter-departmental Climate Resilient
Green Economy steering group in its development of a national
Green Growth Roadmap. To this end, the project analyses businessas-usual scenarios and then compares these to the savings potentials available in six priority sectors (urban development, transport,
industry, agriculture, energy, forest conservation/REDD+) and the
associated costs and macro-economic impacts. The findings provide
the basis for measures on the ground under the national climate
action plan. Moreover, the project advises partners on how to establish suitable institutional structures and create a measurement,
reporting and verification (MRV) system.
Germany’sfaststartcommitmentinAfrica
Mali–Implementingnationalstrategiesfor
climatechangeadaptation
The German Government has been supporting the Environment
Ministry of Mali to adapt to climate change impacts since 2009.
Adaptation measures are to be mainstreamed more broadly in
national policies and programmes and carried out. Among other
things, advice has been provided to local partners on the introduction of a ‘Climate Proofing’ tool. This tool helps decision-makers
make climate change a component of national planning processes
and, by analysing strategic and scientific documents, identify climate risks and evaluate the need for action. Pilot activities showcase
how adaptation to climate change can proceed in rural areas.
Building on this work, the capabilities of decision-makers are
strengthened, while adaptation methodologies are developed and
local authorities are assisted in implementing adaptation measures.
Furthermore, a comprehensive bilateral programme designed to
develop and implement integrated adaptation strategies is under
preparation and will start in 2012. The programme aims to boost the
adaptive capacity of the country in a fashion that cuts across sectors
and is geared to implementation on the ground.
Tunisia–
Protectingcoastsinresponsetoclimatechange
In Tunisia the coastal zones are vital: they are home to 65 per cent of
the population and the source of 90 per cent of industrial and touristic output. The impact of climate change is already making itself
felt in Tunisia’s coastal region: extreme events such as coastal storms
have increased. This is causing flooding that erodes the protective
flood bank and leads to severe salination of the hinterland through
saltwater intrusion.
Tunisia has responded by adopting a coastal protection programme:
the Plan National contre l’Erosion Marine. Under the programme,
the German Government aims to help Tunisia rehabilitate and
protect selected eroded stretches of coast and beach. Flood banks
and other coastal engineering systems are to be rehabilitated or
reinforced in order to protect the vulnerable hinterland against
flood damage and prevent salination of near-coastal freshwater
aquifers. The overall goal is to restore and maintain the ecological,
economic and touristic value of the coasts as an important asset
for Tunisian development.
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14
TheCongoBasin–Protectingtheclimatethrough
conservationandsustainableuseofforests
The Congo Basin is the second-largest contiguous rainforest area
on earth. It plays a critical role in climate protection. Germany
supports the Central African Forests Commission (COMIFAC) and
its Working Group on Climate Change in developing common
positions for climate negotiations as well as regional strategies for
the protection and sustainable use of forests. At the national level,
projects are being carried out to support the further development
and the implementation of corresponding national laws. At the
local level, forest certification ensures sustainable use of the forests.
To protect the forests and their biodiversity, Germany is also directly
involved in various conservation areas, many of which cross borders,
such as the Tri-National de la Sangha (TNS). Germany also supports
the development of climate change scenarios in the Congo Basin to
help decision-makers adapt their natural resource use strategies to
climate change.
SouthAfrica–
Developmentofanationalclimatepolicy
South Africa has voluntarily set itself ambitious climate change
mitigation targets: emissions are to drop by 34 per cent by 2020, and
even by 42 per cent by the year 2025. The German Government has
been supporting this commitment for several years, for instance
through a project designed to build the capacity of the South African
Department for Environmental Affairs (DEA) to engage in analysis,
policy development and consensus-building. An intensive process
of dialogue throughout South Africa’s society, involving the government, industry, academia and civil society, determines the direction
taken by this cooperation. The National Climate Change Response
Green Paper was debated prior to its publication at numerous stakeholder workshops and public hearings. The project is now assisting
the formulation of a White Paper. As part of this process, national
mitigation strategies and environmental policy tools have been
enhanced in close cooperation with the relevant ministries.
The project is making broad-based contributions to the implementation of South African climate policy. This includes preparations
for the 17th Conference of the Parties (COP 17) in Durban, and the
establishment of a national MRV system.
Germany’sfaststartcommitmentinAfrica
Mozambique–
Preventingandmitigatingdisasters
Mozambique endeavours to reduce the risks of disasters in areas
that are particularly vulnerable to the effects of climate change. For
example, due to an increasing number of cyclones, heavy rains and
spring floods in recent years the drainage system can no longer cope
with higher water flows; this leads to major damage.
To support Mozambique’s efforts, the German Government has
set up a programme that works with local governments and the
Mozambican National Institute for Disaster Management to strengthen a system of disaster prevention and improve disaster risk
mitigation methods and measures.
One component of the programme is implemented in the city of
Beira, Mozambique’s second most important urban centre with
600,000 inhabitants. The port city faces particular challenges due
to its location and vulnerability to climate change. Methods include risk mapping, early warning and the creation of local Disaster
Reduction Committees that review spatial planning and discuss
municipal priorities for adaptation. Initial activities have been
under taken towards developing an adaptation strategy for Beira.
15
16
Reducing emissions: Creating a sustainable
economy, limiting climate change
Renewable energies are essential for reducing greenhouse gas emissions.
In order to limit global warming to less than two
degrees Celsius above the pre-industrial level,
global greenhouse gas emissions will need to be
at least halved by 2050. This means decoupling
economic growth from greenhouse gas emissions in order to create a sustainable, low-carbon
economy. This will require an enabling policy
setting and access to financing, know-how and
technologies worldwide.
The development and piloting of innovative
technologies and the dissemination of the results
will help to create an ecologically sustainable
and profitable global economy. It will also reduce dependency on fossil fuels, create jobs and
support efforts to combat poverty. The German
Government is working closely with developing
countries and emerging economies and is actively
engaged in the following areas:
Drivingclimatepolicyforward
Policy-makers and business leaders everywhere
must create an enabling setting for climate
protection and take corresponding action. The
German Government is supporting its partner
countries in this process. Projects initiated by
the German Government with partner countries
build capacities and develop methodologies and
mechanisms for emissions reduction, with a particular focus on renewable energies and energy
efficiency. The aim is to develop comprehensive
national climate protection programmes and
support their implementation.
Improvingenergyefficiency,
deployingrenewables
Expanding the use of renewable energies and
increasing energy efficiency can do much to
cut energy consumption and greenhouse gas
emissions. This also reduces local air pollution,
improves quality of life and boosts the economy.
In many cases, however, there is a lack of access to modern technologies and little detailed
knowledge about their possible uses. This is often
exacerbated by unfavourable political and economic conditions and a lack of financing. Germany
supports its partners by providing policy-makers
and local market participants with advice, training
and access to infrastructure and expertise and by
contributing to financing mechanisms to promote
sustainable investment and pilot projects. All these
activities foster the development and implementation of low-carbon strategies on a broad basis.
Reducingemissions
17
Expandingthecarbonmarketandemissions
trading
The carbon market is a key instrument for global
climate change mitigation. It puts a price on
emissions, thereby creating incentives for emissions reductions. Projects supported by the
German Government demonstrate the emissions
reduction potential of this instrument and help
to expand emissions trading to more countries,
technologies and sectors. They focus on innovative techniques and project types, such as the
Clean Development Mechanism (CDM) or of
Activities (PoAs). The approach taken safeguards
the social and ecological sustainability of the
carbon market.
promote the switch to natural refrigerants such
as ammonia, hydrocarbons and carbon dioxide.
Reducingozone-depletinggreenhousegases
Although the Montreal Protocol on Substances
that Deplete the Ozone Layer requires ozonedepleting greenhouse gases (F-gases) to be
replaced by climate-neutral refrigerants, the
proportion of these gases in total greenhouse gas
emissions is rising steadily. This is due to the increasing use of refrigeration and air-conditioning
technology worldwide. This applies particularly
to the developing and emerging economies.
Germany is therefore supporting projects which
Modern waste management not only conserves
resources and improves local environmental conditions. It can also help to reduce methane emissions, which are a particularly potent climate gas.
Residues from agriculture and the food industry, as
well as organic waste and wastewater from households, can be used as a resource for the sustainable
production of bioenergy. The German Government supports projects which focus on climatesmart waste management and harness the energy
potential of wastes, particularly organic residues.
Developingsustainabletransportandwaste
managementsystems
The need for mobility is steadily increasing
worldwide. In the emerging economies in particular, the transport sector has made an everincreasing contribution to high greenhouse gas
emissions in recent years. The German Government is promoting the piloting and dissemination
of innovative drive technologies in the electromobility and hybrid drive sectors. It further
supports the development and implementation
of sustainable transport strategies.
18
Solar power plants generate sustainable energy in Morocco.
TheMENAregion–
energyasaneconomicsector
With their desert plains, low risk of rainfall and
relatively well-developed road networks and
power grids, the countries of the Middle East and
North Africa (MENA) region have the best possible
conditions to harness wind and solar energy. If
just two per cent of the Sahara Desert were covered
in solar panels, it would generate enough power
to meet the entire world’s energy needs.
The majority of these countries have recognised
the opportunity afforded by establishing renewable energies and energy efficiency and have
developed ambitious national expansion plans.
Extensive investments will be made, stimulating
the growth of local industries and services and
leading to greater employment opportunities
and economic development in the future. This
is a great opportunity for the MENA countries,
particularly in the current political situation.
The electricity generation potential in the MENA
region is so immense that besides meeting their
own national energy needs, in the long term these
countries could also export green electricity to
Europe.
Expandingrenewableenergies,increasing
energyefficiency
If these countries are to sustainably increase their
energy security and national value added as well
as protecting the climate, the costs of renewables
in these countries must decrease, the political
and economic framework must be improved, and
know-how developed. The German Government
is therefore supporting investment in renewable
energies and energy efficiency measures in the
MENA countries and is working with relevant
actors in this context. Besides bilateral cooperation, the MENA region is also the target region
for initiatives to promote renewables and energy
efficiency like the Mediterranean Solar Plan (MSP)
of the Union for the Mediterranean, the World
Bank’s Clean Technology Fund (CTF), or the private sector’s DESERTEC Industrial Initiative (Dii
GmbH). Germany is the third largest donor to the
CTF, which is providing the MENA region with
750 million US dollars. Dii GmbH promotes the
generation of clean, green electricity in North
Africa and its export to Europe.
Reducingemissions
Morocco–anambitiousSolarPlan
Morocco is the pioneer country within the MENA
countries. With its Solar Plan, presented in 2009,
the Moroccan Government has sent out a clear
signal that it aspires to be a committed partner in
efforts to move towards a sustainable electricity
supply. The plan provides for the installation, by
2020, of five solar power plants with an overall
capacity of 2,000 MW, with total investment of
around nine billion US dollars. Their output would
be sufficient to cover 18 per cent of current annual
electricity production and save 3.7 billion tonnes
of CO2 emissions per year. The German Government has supported Morocco in this sector for over
20 years. Currently, it is supporting the installation of a 500 MW concentrated solar power (CSP)
plant, as the first reference project in Ouarzazate,
by providing a low-interest loan of 100 million
euros. Morocco’s plan to establish 2000 MW of
windparks by 2020, along with its creation of
agencies to promote renewable energies and
energy efficiency and help establish local industries and services in this area, are evidence of the
country’s commitment.
Egypt–massivewindenergypotential
Egypt has some of the best wind energy locations
in the world. One of the largest wind farms in Africa
is located at Zafarana. The installation of several
thousand megawatts of power plant capacity
is planned at wind farms in the Gulf of Suez and
Gulf of el Zayt. In designing these projects, the
long-term protection of birds and other migratory
species has been assured. The German Government
has supported and will continue to support Egypt
in all of these projects. The necessary transmission
lines to connect the wind farms to the national grid
are currently being funded by the CTF, which is providing 150 million US dollars to Egypt. Besides infrastructural development, the German Government
is promoting the establishment of more favourable
legal frameworks in order to ensure that the full
commercial potential of wind power is realised.
Germany is also continuing to support professional
skills development for plant and grid operators.
19
Jordan–improvingenergyefficiencyinthe
watersector
Reducing electricity consumption makes the
most significant contribution to climate change
mitigation. The Water Authority of Jordan (WAJ)
is the largest electricity consumer in Jordan,
using about 15 per cent of the country’s total
electricity production, and also produces substantial greenhouse gas emissions. One reason is
that due to Jordan’s hydraulic conditions, fresh
water must be pumped from the Jordan Valley to
reach the country’s major cities. The operation
of the pumps is often inefficient, and many of the
pumps are poorly maintained, resulting in WAJ’s
extremely high electricity consumption.
Germany is therefore supporting interventions
to make pumping operations more energy
efficient. Support is also being provided for the
Water Authority in order to develop technical
and financial solutions to improve quality standards and operational management. As a result
of these measures, annual CO2 emission reductions of 1,500 tonnes are being achieved.
Egypt is an ideal location for generating wind energy.
20
ACAD supports carbon market projects in Africa, for instance with the low-cost and efficient Nuru Lights system.
Sub-SaharanAfrica–
expandingthecarbonmarket
Emissions trading is one of the most important
weapons in the fight against climate change. And
yet Africa’s total share of projects implemented
under the Clean Development Mechanism (CDM)
is negligible, and very few African countries are
currently benefiting from carbon trading. SubSaharan Africa in particular faces a shortage of
trained project developers and has little experience in assessing the risks associated with project
implementation. What is more, there are few
tried and tested methods for certifying emissions
reductions under Africa’s specific conditions.
Africa’s financial sector also lacks the capacity and
skills to develop carbon trading schemes. Adding
to these problems, local and regional financial institutions and investment intermediaries are often
reluctant to take on these financial risks due to
the often very high transaction costs.
Financingprojects,buildingcapacities
The African Carbon Asset Development (ACAD)
Facility, which is supported by the German
Government, aims to overcome these obstacles
and develop local carbon market pilot projects
in Africa. ACAD seeks to build local partners’ skills
and capacities in emissions trading, create a
self-sustaining momentum in the African carbon
market, and mobilise the financial sector in
particular. To that end, it takes on a share of the
transaction costs, provides advisory services for
investors, project developers and local carbon
traders, and supports capacity building through
the provision of training. The projects supported
by the Facility are important pilots which must be
easily transferable. The aim is thus to reduce
transaction costs in the carbon market and open
the way for follow-up projects.
Reducingemissions
21
Thailand–
strengtheningclimatepolicy
Thailand is severely impacted by climate change.
Rising sea levels will put coastal regions, farmland,
coastal fishing and even the capital, Bangkok, at
risk, while inland areas will have to contend with
an increase in frequency and severity of flood
incidents and droughts. Furthermore, Thailand’s
per-capita greenhouse gas emissions are relatively high in comparison to other countries in the
region. Most of the country’s forests have been
cleared, depriving Thailand of important carbon
sinks.
Policyadvice
Germany is supporting Thailand’s efforts to meet
these challenges. Within three projects comprising the Thai-German Climate Change Programme, the Government of Thailand is receiving advice on climate policy. The programme’s
centrepiece is a project which assists the Office of
Natural Resources and Environmental Policy and
Planning (ONEP), under Thailand’s Ministry of
Natural Resources and Environment (MNRE), to
establish a coordinating office which will develop
and manage relevant policy measures. The project
advises on the preparation and evaluation of
international negotiations and conferences, on
the development and implementation of the Thai
Climate Change Strategy, and on raising public awareness of the challenges associated with
climate change and managing climate data.
Practicalmitigation
The other two projects within the programme
focus on implementing practical mitigation
measures. One of the projects aims to increase
energy efficiency in small and medium-sized
enterprises (SMEs) in key industrial sectors such as
ferrous metal and aluminium casting, glassmaking, textiles and the food industry. The third
project promotes nature-based tourism in
Thailand. It assists Thai partners to incorporate
aspects of climate change mitigation, environmental conservation, and adaptation to climate
change into tourism development plans as part
of a national strategy.
The German government plans to support
additional projects that aim to assist Thailand's
low carbon development in the near future –
for example a project on developing the national
plan for energy efficiency measures as part of
the country's integrated mitigation efforts, elaborating National Mitigation Strategies (NAMAs)
in the building sector, and establishing standards
and criteria for sustainable consumption and
production.
22
REDD+: Reducing emissions from
deforestation and forest degradation
The Brazilian rainforest is an important carbon reservoir.
Forests, mires and other forms of ecosystems
absorb and store vast quantities of carbon dioxide.
Destruction of these massive carbon sinks releases
enormous amounts of greenhouse gas emissions,
which contribute to climate change. There is an
international consensus that the conservation
of forests and other ecosystems is a cost-effective
way of mitigating climate change and conserving
biological diversity, thereby helping to safeguard
our natural life-support systems. Deforestation
and degradation of forests accounts for as much as
20 per cent of global annual CO2 emissions. Conserving forests and other carbon sinks is therefore
a key topic in the international climate process.
The mechanism for reducing emissions from
deforestation and forest degradation (REDD+)
currently under discussion within the UNFCCC
framework is intended to create incentives for
avoiding deforestation and forest degradation
and to keep forests standing as carbon sinks. The
aim is to develop a transparent and verifiable
system for the payment of compensation to forestrich developing countries for proven emissions
reductions achieved through forest conservation and restoration. This approach offers great
potential, also for sustainable economic and social
development in the tropical forest countries.
Germany takes the importance of forests in climate protection very seriously. At the Petersberg
Climate Dialogue in Bonn and the Oslo Climate
and Forest Conference that established the Interim
REDD+ Partnership in May 2010, the German
Government pledged to provide around 30 per
cent of the 1.26 billion euros announced as fast
start climate financing for REDD+. This amounts to
a commitment of more than 350 million euros for
forest conservation.
Buildingontriedandtrustedmethods
Through its international cooperation, Germany
has played an active and successful role in forest
conservation for many years. Germany was also
involved in setting up and providing start-up
financing for the multilateral Forest Carbon
Partnership Facility (FCPF), which develops key
standards and benchmarks for national REDD+
programmes. On that basis, Germany is already
supporting projects which develop national
strategies for REDD+ and establish the appropriate legal, financial and institutional frameworks
REDD+
23
(‘REDD+ readiness’). These bilateral and multilateral projects provide policy advice and technical
expertise, leverage the requisite investment
financing, support institutional capacity building,
and promote knowledge-sharing and the exchange of experience. Communities which depend
on forests for their homes, livelihoods and food
supply are involved in this process and their
specific needs are taken into account. In simple
terms, the REDD+ process consists of three
phases, see fig. 8.
Germany’sroleintheFCPF
Germany has been a driving force in establishing,
developing and providing start-up financing for
the FCPF. In this context, it is able to draw on
experience gained with other multilateral forest
conservation initiatives, such as those operated by
the Global Environment Facility (GEF), as well as
its many years of bilateral commitment to tropical
forest conservation. The FCPF supports national
efforts to achieve REDD+ readiness in up to 37
partner countries, and is currently developing
pilot projects for the payment of compensation for
successful reduction of deforestation and its
associated emissions. The FCPF is now successfully
developing quality standards for REDD+ and
provides a key learning platform, benefiting
partner countries, civil society and donors alike.
Conservingbiologicaldiversityandnatural
resources
Besides their climate-stabilising effect, intact
forests provide habitats for numerous species of
flora and fauna. They regulate the hydrological
regime, provide protection from soil erosion,
supply vital resources such as timber, food and
medicinal plants and are thus an important
source of income for indigenous communities and
local populations.
The Convention on Biological Diversity (CBD),
adopted in 1992, plays a key role in conserving biodiversity and ensuring that forests are managed
sustainably and can continue to provide ecosystem services. Germany does much to support
CBD implementation.
Forest conservation under REDD+, the preservation of biodiversity and the sustainable management of forest resources in the interests of
sustainable development all go hand in hand.
Germany is working to ensure that biodiversity
policies are linked with REDD+ strategies in
order to generate synergies between the UNFCCC
instruments and the CBD, thus facilitating the
efficient and effective use of available resources.
Fig.8:ThethreeREDD+phases
Phase 1: Readiness
Preparations of national REDD+ strategies
and policies
Phase 2: Implementation and investment
Implementation of national REDD+ strategies
and policies, pilot activities
Phase 3: Performance-based payments
Payments for emissions reductions
24
Brazil–
conservingforests,climateandbiodiversity
The Brazilian rainforest is one of the earth’s most
significant ecosystems and plays an important
role in regulating the global climate. The forests
are a major store of carbon. They are also one of
the world’s largest biodiversity hotspots and provide a natural habitat for numerous indigenous
communities.
However, the Brazilian rainforest is under threat:
vast tracts of forest have already been destroyed
by burning and illegal logging, motivated among
other things by the need to create grazing land for
cattle ranching and arable land for soya and maize
cultivation, as well as by commercial logging interests. Mining, dam-building and illegal land-grabbing are also increasing the rate of forest clearance.
As a consequence of all these activities, carbon
dioxide emissions are produced in vast quantities,
contributing to global warming. Forest clearance
in the Amazon accounts for almost 60 per cent of
Brazil’s greenhouse gas emissions. The Atlantic
coastal forests (Mata Atlântica) are also important
carbon reservoirs and are under great threat from
forest clearance. Livestock husbandry and arable
farming, the spread of settlements and the growth
of industrial centres also pose major threats to
biological diversity in these species-rich habitats.
Germany:supportingBrazil’sclimategoals
Brazil has set itself ambitious national climate
protection targets: for example, it is committed to
a 38 – 39 per cent reduction in its greenhouse gas
emissions by 2020 compared with 2005. In order
to achieve this target, it aims to decrease the rate
of forest clearance in the Amazon by 80 per cent.
It is also making efforts to meet its commitments
under the Convention on Biological Diversity
(CBD). Close cooperation with Germany’s Government underpins Brazil’s efforts to attain these
ambitious goals. Since the mid-1990s, the German
Government has supported a number of projects
focusing on various aspects of forest conservation. In all, Germany has already provided some
350 million euros to protect Brazil’s rainforest.
During recent years Brazil’s efforts to reduce deforestation rates achieved very positive results.
Promotingtransnationaldialogue
Cooperation among the Amazon riparian states is
essential in order to protect the region’s rainforests. The German Government is therefore providing support for the Amazon Cooperation Treaty
Organization (ACTO). The Treaty was concluded
by the Amazon countries in 1978 and aims to
promote transnational coordination on matters
REDD+
25
relating to the Amazon. Policy advice, knowledgesharing and technology transfer help to build
the capacities of ACTO’s Permanent Secretariat
in Brasilia and the regional and national units
in the eight member states. Relevant activities
include the introduction of mechanisms for
developing agreed positions at national, regional
and international level, and the development of
instruments for planning, financing and funding,
which take into consideration the diverse needs
of all stakeholders.
Expandingandmanagingprotectedareas
The projects supported by the German Government promote the management and expansion of existing protected areas. They advise the
Brazilian partners on combating forest fires,
on reforestation in buffer zones, the creation
of ecological corridors, and the promotion of
adapted forms of management. Radio stations
and satellite technology help to monitor the vast
tracts of forest and detect illegal logging and
forest clearance activities. As part of the projects,
local stakeholders involved in the on-site management of the protected areas are provided with
infrastructure and equipment as well as advice
and training, and work with experts to develop
appropriate strategies, management techniques
and instruments. To date, 128 nature reserves
have been established in the Amazon region and
Mata Atlântica, with a combined area of more than
220,000 square kilometres. Monitoring systems
are in place to investigate how forest conservation
can help to reduce greenhouse gas emissions and
promote biodiversity.
Involvinglocalcommunities
In order to safeguard the long-term success of the
protected areas, economic incentives must be created for local communities. To that end, more
than 500 small-scale projects have been set up to
develop opportunities for the environmentally
sound and sustainable use of resources by the
indigenous communities. Indigenous territories
can form natural barriers against deforestation
and forest degradation. The indigenous commu-
Tree seedlings are used in reforestation projects.
nities are involved in the designation of the areas
and learn how to defend themselves more effectively against illegal land-grabbing. This helps
to safeguard their livelihoods and conserves the
forests at the same time.
TheAmazonFundinBrazil
In August 2008, the Brazilian Government set
up the ‘Fundo Amazônia’ (Amazon Fund), in
which the Brazilian National Development Bank
(BNDES) acts as a voluntary REDD+ financing
mechanism. The principle is simple: if the annual
deforestation in the Amazon falls below a defined
benchmark value, private and public donors can
reward this performance by making payments
into the fund. In return, the donors receive documents which confirm the reduction in emissions.
However, these documents cannot be traded and
do not affect international emissions reduction
obligations. Norway and Germany are providing
financial as well as technical support and have
together committed a total of 35.2 million US
dollars for the Amazon Fund in order to bolster
the positive REDD+ trend in Brazil.
26
Adapting to climate change:
Responding to its impacts
Specific agricultural methods support adaptation to climate change.
The impacts of climate change are already being
felt all over the world. The direct human impacts
include decreased yields in agriculture, flooding,
threats to water and energy supplies in remote
and coastal regions, and the spread of epidemics.
Global warming is also a factor in the extinction
of endangered species.
Climate change plays a key role in the worsening
of poverty and social tensions worldwide. Due
to their poorer adaptive capacities, developing
countries are affected to a very significant extent
by climate change impacts such as drought, floods
and storms. If they are to respond effectively to
the climate change impacts that can already be felt
and also take preventive measures in anticipation
of future developments, their technical and financial capacities must be improved.
Developingnationaladaptationstrategies
The primary objective of German climate policy
is to raise partner countries’ awareness of the
impacts of climate change in all spheres of life and
support these countries’ adaptation processes.
In order to initiate the necessary steps towards
adaptation to a changing environment, national
decision-makers must be as well-informed as
possible. In many cases, however, there is a lack of
adequate data about the local impacts of climate
change and few of the skills and infrastructural
capacities needed to develop solutions. As an
initial step, national adaptation strategies can be
prepared, followed by efforts to fully integrate
adaptation into policy-making in the partner
countries and make available the requisite funds
also from national budgets. Together with partners, policy options for the affected areas – such
as water and resource management, nature
conservation, development of infrastructure,
rural development and food security – can then be
formulated. This must include practical adaptation measures such as building dykes, setting up
flood early warning systems, introducing disaster
risk management systems, and establishing appropriate insurance schemes. Above all, however,
building human and institutional capacities and
skills must be a priority.
Takingactionatlocallevel
In cooperation with partners, the German Government also supports adaptation to climate change
in developing countries through country-specific
Adaptingtoclimatechange
and regional interventions. This includes setting
up protected areas for the conservation of climate-relevant ecosystems, which often also form
the basis of fisheries, agriculture or tourism. Other
measures include piloting weather insurance
schemes, developing new cultivation strategies
for agricultural products, or trialling stress-resistant varieties of crop. In its strategy, the German
Government further aims to utilise the synergies
generated by public-private partnerships. These
alliances are intended to leverage investment and
promote innovation.
Buildingcapacitiesforclimatenegotiations
At international level, the German Government
works to ensure that the developing countries
particularly affected by climate change are able
to represent their interests effectively in the UN
climate process. Seminars are provided as a means
of equipping the partner countries with the specialist skills that they require in order to develop
their own positions for the climate negotiations
and assert these positions effectively.
27
Maintainingcapacitytoactinthefaceof
uncertainty
Despite the major progress being made in the
scientific assessment of climate change impacts,
our understanding of its future effects is beset
with uncertainty.
Adaptation therefore also means being able to
respond flexibly to climate change in future.
The partner countries’ adaptation strategies must
be constantly updated in response to new findings in climate research, economic and social
developments and new requirements in affected
areas. The same applies to the German Government’s own strategy as well. This dynamic system
presents a new challenge for the partner countries and German climate policy alike: the partner
countries must be supported in their efforts to
make far-reaching and responsible decisions in the
face of numerous imponderables. Viable networks
are therefore needed to promote exchange
between scientists, experts and policy-makers.
Comprehensivefinancing
The countries around the world which are suffering most from the impacts of climate change only
produce a relatively small proportion of global
greenhouse gas emissions themselves. According
to a recent study by the World Bank, however, it
will soon cost developing countries 75–100 billion
US dollars a year to adapt to climate change. The
German Government is therefore playing an
active role in multilateral financing mechanisms
such as the Pilot Program for Climate Resilience
(PPCR), which is part of the Climate Investment
Funds (CIFs) managed by the World Bank. Specialised funds of the Global Environment Facility
(GEF) and the Adaptation Fund (AF), to which
Germany contributes, also provide funding for
capacity building and adaptation measures. 1
1
For further information, please see the section on multilateral financing.
28
Adaptingtoclimatechange
Pacificislandcountries–
protectingcoastlinesandwaterresources
For most people in Europe, climate change is still
an abstract concept, but for many communities
in the Pacific Island Countries (PICs), it is already
a reality. Due to their limited land area and low
profile – only a few metres above sea level in
many cases – these scattered islands are defencelessly exposed to the natural events which are
becoming more extreme as a result of climate
change. The intensity of rainfall and hurricanes,
for example, is increasing, causing ever more
frequent floods. Waves several metres high then
often batter the coasts or inundate entire areas of
the islands. Periods of drought are also becoming
longer. These effects have serious consequences
for humans and the environment, including the
destruction of crops, salinisation of drinking
water, and coastal erosion, adversely affecting or
even destroying the islanders’ livelihoods, which
depend primarily on agriculture and fisheries.
Acomprehensiveprojectportfolio
Germany supports a number of major climate protection programmes throughout the Pacific Island
Region. In Micronesia, Palau and the Marshall
Islands, for example, the German Government is
supporting the implementation of the Micronesia
Challenge Initiative. The overall goal of the Challenge, launched in 2006, is to conserve at least
30 per cent of the near-shore marine resources
and 20 per cent of the terrestrial resources across
Micronesia from the impacts of climate change
by 2020 through the designation of protected
areas. In the Indo-Pacific Ocean, the German Government supports the Coral Triangle Initiative,
launched by six governments in order to conserve
a habitat that sustains around 200 million people.
The waters of the Coral Triangle hold the highest
diversity of marine species in the world. The Initiative aims to conserve this diversity through the
designation of protected areas while increasing
the region’s adaptive capacities to climate change.
Buildingregionalknow-how
In order to achieve sustainable successes, the
support from the German Government is targeted
at all levels – regional, national and local. One of
the main objectives of German-Pacific cooperation, for example, is to strengthen the capacities of
the Secretariat of the Pacific Community (SPC), a
regional advisory body, by sharing climate-related
knowledge and methodologies. As a result, SPC
is now developing its own climate advisory servic-
29
Marine conservation areas preserve the biodiversity and the livelihood of the local residents.
es and mainstreaming climate change adaptation
in all its programmes.
Climate-proofingnationalpolicies
At national level, the German Government assists
its partner countries in their efforts to develop
adaptation strategies and integrate climate change
into their core economic sectors, namely agriculture and forestry, and into land-use planning and
water management. In Tonga, for example, 31
substantive changes have been incorporated into
the new forest policy in order to take account of
the changed realities resulting from global warming. Tonga is thus at the forefront of efforts in
the Pacific. Similar initiatives are currently being
implemented in Vanuatu and Fiji.
Implementingpilotprojects
It is important, at the same time, to implement
pilot projects at the local level in conjunction with
island communities. On the island of Eua (Tonga),
for example, overexploitation by agriculture
and grazing poses a very serious threat to forest
areas, so these areas are now being fenced off
by the forestry administration with support from
the local community. Afforestation measures
are planned for larger areas of slope at risk from
erosion. A climate-proof land-use plan is being
developed, which will also involve the trialling
of new farming techniques and crops to improve
climate resilience.
Particularly on the more remote and hard-to-reach
islands, however, there is still very little awareness of climate change among local communities.
Comprehensive information and education campaigns are therefore extremely important here.
Climate-related teaching materials are now being
produced in pilot projects and integrated into
the curriculum.
ExtendingtheGermancommitment
Germany’s commitment in the Pacific Island
Countries goes back to 1977. Aware of the transregional effects of climate change, German bilateral
cooperation now focuses on the Pacific region
as a whole, rather than on individual island states.
Germany is providing 30.8 million euros in total
for the current portfolio of climate change adaptation programmes in the Pacific Island Region.
30
Improved climate risk assessment methodologies help to identify and evaluate climate threats in India.
India–
substantialneedforactioninruralareas
Much of India’s agricultural land is cultivated
extensively through rain-fed farming. The subcontinent’s farmers are therefore heavily dependent on the monsoon, which accounts for around
80 per cent of the annual rainfall. However, climate change could radically alter the monsoon
season in India and cause temperatures to rise
– with catastrophic consequences for farmers.
Heavy rainfall could cause flooding in the south
of the country, while vast areas in the north-west
face the threat of drought. These changes will
impact severely on the most vulnerable section of
Indian society, the rural poor, whose livelihoods
still largely depend on agriculture and forestry.
Agroclimaticdifferences
The Indian Government is aware of the problem
and unveiled a National Action Plan on Climate
Change (NAPCC) in 2008. The Indian states are
also required to formulate their own State Action
Plans on Climate Change (SAPCC), which define
their proposed actions on adaptation to climate
change. A key challenge, in this context, is to take
account of the major agroclimatic differences
within the various Indian states.
In addition to assisting the states in producing
climate action plans, Germany is committing
six million euros to support the Climate Change
Adaptation in Rural Areas of India (CCA RAI)
project in four states: Madhya Pradesh, Rajasthan,
Tamil Nadu and West Bengal. These were selected
as project areas as they are most representative of
India’s diverse range of climatic zones.
Riskassessmentatstatelevel
A key component of the project is developing
appropriate vulnerability and risk assessment
methodologies in order to identify and evaluate
climate and environmental threats, such as
flooding in coastal regions, for example the
Sunderbans, more accurately. This provides the
Indian states with the information they need to
identify those sectors, regions and population
groups that will be particularly affected by
climate change in future, enabling them to target
public investment programmes accordingly.
Individualadaptation
As there is little experience in India at present in
dealing with specific climate risks, the project
focuses on implementing pilot schemes in the
Adaptingtoclimatechange
agriculture and forestry sectors and in coastal
protection. For example, salt-tolerant plants are
being trialled on farmland at risk from saltwater
flooding in West Bengal and Tamil Nadu.
Climateproofinggovernmentprogrammes
The Indian Government is carrying out large-scale
investment schemes in rural areas. Within the
project framework, Germany is supporting the
application of a tool to identify possible climate
risks which could jeopardise the sustainability
of these investment programmes in future. CCA
RAI is the first project to develop, test and promote
climate proofing of large-scale public investment
programmes.
31
Anewregionalpriority:north-eastIndia
India’s north-east, with its higher altitudes and,
in some areas, high mountains, faces major
problems on a similar scale. On the steep mountain slopes, land that can be used for farming is
scarce. Mudslides are occurring with increasing
frequency after heavy rainfall, accompanied by
massive flooding of fields and entire villages,
destroying harvests. The German Government is
therefore planning to support a further adaptation programme, comprising financial and technical cooperation, in north-east India, with total
funding of 81 million euros.
Ghana–innovativeinsuranceschemes
forclimatechangeadaptation
Ghana is very vulnerable to the impacts of climate
change. By 2100, the mean daily temperature is
expected to increase by three degrees Celsius and
rainfall to decline significantly. As a consequence,
the frequency and intensity of droughts, floods,
and other extreme weather events will increase,
adversely affecting the country’s agricultural sector: fertile land will be lost, crop yields will decline
dramatically, and farmers’ financial exposure will
increase. At present, it is almost impossible for
the Ghanaian population to protect themselves
against these threats, which put many families’
livelihoods at risk and damage the country’s
economy.
Innovativeinsurancesolutionsofferprotection
fromclimate-relatedcropfailures
The German Government is therefore supporting
a project to develop innovative insurance solutions against financial risks to agriculture caused
by extreme weather events and other impacts
of climate change. These agricultural insurance
products are trialled by local insurance providers in pilot schemes and then brought to market.
The project also provides advisory services for
insurance companies, facilitates contacts with
international reinsurers, and offers training for
insurers’ employees. In order to raise awareness of
insurance products, basic financial training is also
offered for potential clients. With these interventions, the project aims to create an enabling policy
setting for the deployment of these insurance
products. The meteorological infrastructure is
also being improved in order to support the collection and analysis of data for the calculation of
insurance risks.
The agricultural insurance schemes will improve
income and food security, the supply of credit, and
employment opportunities for the rural population in Ghana.
32
Internationalclimatefinancing
International climate financing:
Innovative instruments
At the Climate Conference in Copenhagen, the
industrialised countries pledged to support developing countries in their endeavours to reduce
emissions and adapt to climate change. However,
the 100 billion US dollars to be mobilised annually
for this purpose, starting in 2020, cannot be raised
without the long-term and reliable involvement
of the private sector.
A range of innovative instruments is required
here, their common feature being that they
deploy scarce public funds intelligently in order
to leverage as much private capital for investment in a low-carbon future as possible. In this
way, every euro from public funds is matched
with a significantly larger volume of funding from
private sources.
The private sector, however, continues to perceive
that the risks associated with investing in areas
such as expansion of renewable energies and increasing energy efficiency in developing countries
are too high.
Mobilisingprivatecapitaltoprotectthe
climate–apracticalexample
The Global Climate Partnership Fund 1 is an instrument for mobilising public and, above all, private
capital for investment in climate change mitigation in developing and emerging countries. It is a
structured fund that combines public and private
capital. The fund primarily supports finance institutions (commercial banks and non-bank financial institutions such as leasing companies) in the
target countries in their provision of funding for
investments in small and medium-sized enterprises (SMEs) and households in the fields of energy
efficiency, renewable energies and reduction of
greenhouse gases. Unlike other conventional loan
facilities aimed at renewable expansion or increasing energy efficiency, this fund operates on a
revolving basis and does not consume the capital.
Two key questions must therefore be addressed in
this context:
• How can public funds be used to stimulate
private finance flows for climate protection?
• How can public funds be deployed to establish
and improve the general framework for climate
investment by the private sector in developing
countries and emerging economies?
1
www.gcpf.lu
33
At the same time, the public capital acts as a risk
buffer to mobilise additional – especially private
capital.
A structured fund consists of different risk tranches based on the different categories of shareholder. Donor capital makes up what is known as
the junior or equity tranche, which is the first to
absorb any losses. Public funds from the German
Government and other donors are allocated to this
tranche. Any further losses are then covered by
the development banks and international finance
institutions that have raised funds on the capital
markets and invested them at their own risk in the
mezzanine tranche. Only as a last resort private
investors in the senior tranche would risk losses.
It is this hedging of risk that creates incentives
for private investors to participate in a fund
that invests in regions they are unfamiliar with
(developing, transition, and emerging countries)
and in innovative sectors (financing for climate
change mitigation).
The Global Climate Partnership Fund was set up
in December 2009 by KfW Entwicklungsbank on
behalf of the German Government. Its professional fund manager – Deutsche Bank – was selected
through an international tendering process. The
fund has already secured pledges from investors
of over 200 million US dollars, and is set to exceed
500 million US dollars by 2014. The Global Climate
Partnership Fund made its first investments in
2011. Its outstanding portfolio will top 100 million
US dollars by December 2011.
Fig.9:StructureoftheG lobalClimate
PartnershipFund
Private investors
Senior-Tranche
Development banks/
international finance
institutions
Mezzanine-Tranche
Donors
Junior-Tranche
34
Multilateralcooperation
Multilateral cooperation:
The German contribution
In 2011 Germany plans to contribute more than
1.2 billion euros for climate protection in developing and newly industrialising countries. At
present, the government invests most of these
financial resources in bilateral projects. Complementing multilateral engagements are chosen
strategically to promote innovative and strong
partnerships at a global level. We usually seek to
add value through our own bilateral experience,
thus forging synergies in learning.
Fig.10:MultilateralfundingchannelsforGermany’s
faststartfinance
Thematic Trust Fund for Support to Energy and
Environment for Sustainable Development 5 Mio €
Adaptation Fund 10 Mio €
Trust Fund for Ecosystem Based Adaptation 10 Mio €
Pilot Programme for Climate Resilience (PPCR) 20 Mio €
Special Climate Change Fund 23 Mio €
GlobalEnvironmentFacility
The Global Environment Facility (GEF) as financial
mechanism for the United Nations Framework
Convention on Climate Change, to date, has
provided more than 2.5 billion euros for climate
projects in 165 countries. Germany is the third
largest donor to the GEF, with a contribution of
347 million euros for the replenishment period
2010 – 2014. Two further Funds which specialise in
financing adaptation programmes are operated
by the GEF: these are the Least Developed Countries Fund (LDCF) and the Special Climate Change
Fund (SCCF). The German Government is the
largest contributors to these Funds with 115 million
euros to LDCF and 60 million euros to SCCF committed until 2011.
ClimateInvestmentFunds
The World Bank’s Climate Investment Funds (CIF)
are designed to support rapid and scaled-up financing of climate projects in developing countries.
Germany has contributed 550 million euros to the
Funds’ total resources of 6.3 billion US dollars.
Forest Carbon Partnership Facility (FCPF) 43 Mio €
Least Developed Countries Fund (LDCF) 45 Mio €
Clean Technology Fund (CTF) 250 Mio €
As at 31 August 2011.
The CIFs comprise the Clean Technology Fund
(CTF) and the Strategic Climate Fund (SCF). The
35
resources available within the CTF, amounting to
around 4.3 billion US dollars, promote scaled-up
financing for low-carbon technology programmes
to reduce greenhouse gas emissions in advanced
developing countries and emerging economies.
The SCF is divided in various sub-funds such as
the Pilot Program for Climate Resilience (PPCR), to
which Germany contributes 50 million euros.
AdaptationFund
Under the Kyoto Protocol, the Adaptation Fund
is financed from the share of proceeds on Clean
Development Mechanism (CDM) project activities,
amounting to two per cent of certified emission
reductions (CERs). It is anticipated that an estimated 450 million US dollars will be available for
adaptation projects in developing countries
for the period 2010 – 2012. Germany is contributing at least 10 million euros to the Adaptation
Fund in 2010. The conferral of legal capacity
on the Adaptation Fund Board in Germany also
supports its operationalisation.
Europeancooperation
The European Development Fund (EDF) and the
Development Cooperation Instrument (CI) – the
main financing instruments for the European
Union's development cooperation – also provide
financing for climate projects. Germany is the
largest contributor.
Abbreviations:
ACAD
African Carbon Asset Development
MENA
Middle East and North Africa
ACTO
Amazon Cooperation Treaty Organization
MRV
Measurable Reportable Verifiable
AF
Adaptation Fund
MSP
Mediteranean Solar Plan
BMU
Federal Ministry for the Environment,
Nature Conservation and Nuclear Safety
MW
Mega Watt
NAMA
Nationally Appropriate Mitigation Action
BMZ
Federal Ministry for Economic Cooperation
and Development
NAPAs
National Adaptation Programmes of Action
CBD
Convention on Biological Diversity
NAPCC
National Action Plan on Climate Change
CDM
Clean Development Mechanism
ODA
Official Development Assistance
CER
Certified Emission Eeduction
PICs
Pacific Island Countries
DCI
Development Cooperation Instrument
PoA
Programme of Activities
CIF
Climate Investment Funds
PPCR
Pilot Program for Climate Resilience
COP17
17th Conference of the Parties
REDD+
Reducing Emissions from Deforestation and
Forest Degradation
CTF
Clean Technology Fund
SAPCC
State Action Plan on Climate Change
DKTI
German Climate Technology Initiative
SCCF
Special Climate Change Fund
EDF
European Development Fund
SCF
Strategic Climate Fund
EU
European Union
SME
Small and Medium-sized Enterprise
FCPF
Forest Carbon Partnership Facility
UN
United Nations
GEF
Global Environment Facility
UNDP
United Nations Development Programme
ICI
International Climate Initiative
UNEP
United Nations Environment Programme
KfW
KfW Bankengruppe
LCDS
Low Carbon Development Strategy
UNFCCC United Nations Framework Convention on
Climate Change
LDCF
Least Developed Countries Fund
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Date
October 2011
Text
Division K I II 7, Federal Ministry for the
Environment, Nature Conservation and
Nuclear Safety; Division Climate Policy and
Climate Financing, Federal Ministry for
Economic Cooperation and Development;
Programme Office International Climate Initiative;
Karin Adolph
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