Justice in Funding Adaptation under the International Climate Change Regime

Justice in Funding Adaptation under the International Climate Change Regime

Justice in Funding Adaptation under the International Climate Change Regime Marco Grasso Università degli Studi di Milano-Bicocca, Milan 123

Marco Grasso Dipartimento di Science Economico Aziendali Università degli Studi di Milano-Bicocca via Bicocca degli Arcimboldi 8 I-20126 Milano Italy marco.grasso@unimib.it ISBN 978-90-481-3438-0 e-isbn 978-90-481-3439-7 DOI 10.1007/978-90-481-3439-7 Springer Dordrecht Heidelberg London New York Library of Congress Control Number: 2009939125 Springer Science+Business Media B.V. 2010 No part of this work may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, microfilming, recording or otherwise, without written permission from the Publisher, with the exception of any material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)

Acknowledgments This book has benefited from the suggestions and comments of many people. I would especially like to thank Michael Redclift, Matilde Ferretto, Elena dell Agnese, Mark Pelling, Michael Mason, Edward Page, Marina Calloni, Harro van Asselt and Menno Kamminga. I am also indebted to all the members of the Dipartimento di Sociologia e Ricerca Sociale of the Università degli Studi di Milano-Bicocca for having stimulated me to reflect on the issues addressed by this book. E grazie, soprattutto, a chi mi è vicino. v

Contents 1 Introduction... 1 1.1 Justice and Climate Change..... 2 1.2 AimsoftheBook... 7 1.3 Outline of the Book.... 8 References... 10 2 Adaptation to Climate Change... 11 2.1 The Prominent Role of Mitigation... 11 2.2 Integrating Mitigation and Adaptation..... 13 2.3 The Importance of Adaptation.... 15 2.4 The Notion of Adaptation...... 16 2.5 Vulnerability... 20 2.6 Adaptive Capacity..... 22 2.7 Adaptation in Practice... 23 References... 27 3 The Ethical Bases of International Adaptation Funding... 29 3.1 From Justice to Theories of Justice...... 31 3.2 The Scope of Distributive Justice... 35 3.3 The International Span of Justice... 37 3.4 The State s Responsibility in the Liberal Perspective...... 41 3.5 The State s Social Vulnerability in the Liberal Perspective... 44 3.6 Other Justifications of the Statist Perspective...... 46 3.7 The Extension of Liberal Theories of Justice to Adaptation Funding 47 References... 51 4 The Framework of Justice... 53 4.1 Fair Process Involving All Relevant Parties... 53 4.2 Responsibility for Climate Impacts As an Ethical Basis for Raising Funds..... 55 4.3 Social Vulnerability to Climate Impacts as an Ethical Reference for Allocating Funds... 58 4.4 LiberalismandtheEnvironment... 60 4.5 Fair Adaptation Funding: Inclusion, Specification and Commitment 61 vii

viii Contents 4.6 Sharing the Burden of Adaptation: Differentiated Historical Responsibility... 63 4.7 Allocating Raised Adaptation Funds: Lack of Human Security.. 66 References... 69 5 The International Institutions and Instruments Governing Adaptation Funding... 71 5.1 Funding Adaptation: Rationale... 72 5.2 Funding Adaptation: Options.... 73 5.3 Funding Adaptation in the Convention and Kyoto Protocol... 74 5.4 TheGEF... 77 5.5 The Sources of Funding... 79 5.5.1 The GEF Trust Fund..... 79 5.5.2 The Special Climate Change Fund... 80 5.5.3 The Least Developed Countries Fund...... 80 5.5.4 The Adaptation Fund.... 81 5.6 Problems and Challenges of Adaptation Funding Under theunfcccregime... 85 5.7 Funding Adaptation Outside the UNFCCC Regime: Significant Practices.... 86 References... 88 6 Evaluation of Procedural Justice in International Adaptation Funding... 89 6.1 Principal Documents: Convention and Kyoto Protocol..... 92 6.1.1 Recognition: Inclusion of All Countries..... 94 6.1.2 Participation: Possibility to Specify the Terms of Participation... 94 6.1.3 Distribution of Power: Commitment to Assistance from Richer to Poorer.... 94 6.2 Other Principal Documents..... 95 6.2.1 The Berlin Mandate..... 95 6.2.2 The Buenos Aires Plan of Action... 95 6.2.3 Beijing Declaration of the Second GEF Assembly... 95 6.2.4 The Delhi Ministerial Declaration on Climate Change and Sustainable Development...... 96 6.2.5 TheBaliActionPlan... 96 6.3 Governance Structures, Procedures and Practices.... 96 6.4 UNFCCC Institutions... 98 6.4.1 The Conference of the Parties..... 98 6.4.2 The Subsidiary Body for Implementation.... 99 6.4.3 Consultative Group of Experts and Least Developed Countries Expert Group... 100 6.5 TheGEF... 101 6.6 The Importance of the Adaptation Fund and its Governance Structure.... 103

Contents ix 6.7 Observation of Meetings on the (Governance of the) AF: Failure (SBI 24) and Success (SBI 25, COP/MOP 2)...... 106 6.7.1 TheFailure:SBI24... 106 6.7.2 The Success: SBI 25 and COP/MOP 2..... 112 6.7.3 FinalConsiderations... 117 References... 117 7 Evaluation of Distributive Justice, Analysis of Fairness and Equity Criteria and of the Role of Justice in International Adaptation Funding... 119 7.1 Principal Documents: Convention and Kyoto Protocol..... 119 7.1.1 Equality and Difference: Differentiated Historical Responsibility... 120 7.1.2 Basic Capability Equality: Lack of Human Security... 121 7.2 Other Principal Documents..... 122 7.2.1 The Berlin Mandate..... 122 7.2.2 The Buenos Aires Plan of Action... 122 7.2.3 TheBaliActionPlan... 122 7.3 Observation of Meetings on the (Governance of the) AF: Failure (SBI 24) and Success (SBI 25, COP/MOP 2)...... 123 7.3.1 TheFailure:SBI24... 123 7.3.2 The Success: SBI 25, COP/MOP 2... 124 7.3.3 FinalConsiderations... 125 7.4 Fairness and Equity Criteria in Documents... 125 7.5 Fairness Criteria in Governance Systems... 128 7.6 Fairness and Equity Criteria in Formal Adaptation Fund Meetings 129 7.7 Some Final Considerations on Justice in International Adaptation Funding.... 130 References... 132 8 Further Application of the Framework of Justice and Concluding Remarks... 133 8.1 Evaluation of Post-Kyoto Adaptation Funding Proposals.... 133 8.2 Conventional Funding: Budgetary Contributions.... 136 8.2.1 +0.5%GNPfromAnnexIParties... 136 8.2.2 Adaptation Finance Index... 137 8.2.3 Climate Change Fund.... 137 8.2.4 Models Based on Existing Precedents: Global Fund to Fight AIDS, Tuberculosis, Malaria Multilateral Fund for the Implementation of the Montreal Protocol...... 137 8.2.5 Multilateral Financial Structure for Climate Change... 138 8.3 Unconventional Funding: Contributions Raised Through Market-BasedInstruments,Taxes,andLevies... 138 8.3.1 Carbon-Gold.... 138 8.3.2 Financing Adaptation by Auctioning...... 139

x Contents 8.3.3 Global Carbon Adaptation Tax.... 139 8.3.4 Greenhouse Development Rights... 140 8.3.5 Insurance Instruments for Adapting to Climate Risks... 140 8.3.6 International Air Passenger Adaptation Levy...... 141 8.3.7 International Climate Change Adaptation and National Security Fund... 141 8.4 Hybrid Funding: Conventional and Unconventional Contributions 141 8.4.1 Convention Adaptation Fund..... 141 8.4.2 Indian Financing Architecture..... 142 8.4.3 Integral Financial Mechanism for Living Well..... 142 8.4.4 International Blueprint on Adaptation...... 143 8.4.5 Sao Paulo Proposal..... 143 8.4.6 World Climate Change Fund (Green Fund)... 143 8.5 Some Final Reflections on Justice in the Post-Kyoto Architectures 144 8.6 MainContributionsoftheBook... 145 8.7 Policy Ideas... 148 References... 150 Appendix A: List of Non-Principal Documents... 151 Appendix B: Analysis of Documents (Procedural Justice)... 155 B.1 Guidance to the Financial Mechanism..... 155 B.1.1 Recognition: Inclusion of All Countries..... 156 B.1.2 Participation: Possibility to Specify the Terms ofparticipation... 157 B.1.3 Distribution of Power: Commitment to Assistance from Richer to Poorer Countries.... 158 B.2 Review of the Financial Mechanism...... 158 B.2.1 Recognition: Inclusion of All Countries..... 160 B.2.2 Participation: Possibility to Specify the Terms ofparticipation... 160 B.2.3 Distribution of Power: Commitment to Assistance from Richer to Poorer.... 161 B.3 The Special Climate Change Fund...... 161 B.3.1 Recognition: Inclusion of All Countries..... 163 B.3.2 Participation: Possibility to Specify the Terms ofparticipation... 163 B.3.3 Distribution of Power: Commitment to Assistance from Richer to Poorer.... 164 B.4 The Least Developed Countries Fund..... 165 B.4.1 Recognition: Inclusion of All Countries..... 166 B.4.2 Participation: Possibility to Specify the Terms ofparticipation... 166 B.4.3 Distribution of Power: Commitment to Assistance from Richer to Poorer.... 167

Contents xi B.5 The Adaptation Fund... 167 B.5.1 Recognition: Inclusion of All Countries..... 168 B.5.2 Participation: Possibility to Specify the Terms ofparticipation... 168 B.5.3 Distribution of Power: Commitment to Assistance from Richer to Poorer.... 169 Appendix C: Analysis of Documents (Distributive Justice)... 171 C.1 Guidance to the Financial Mechanism..... 171 C.1.1 Equality and Difference: Differentiated Historical Responsibility... 171 C.1.2 Basic Capability Equality: Lack of Human Security... 171 C.2 Review of the Financial Mechanism...... 172 C.2.1 Equality and Difference: Differentiated Historical Responsibility... 172 C.2.2 Basic Capability Equality: Lack of Human Security... 172 C.3 The Special Climate Change Fund...... 173 C.3.1 Equality and Difference: Differentiated Historical Responsibility... 173 C.3.2 Basic Capability Equality: Lack of Human Security... 173 C.4 The Least Developed Countries Fund..... 173 C.4.1 Equality and Difference: Differentiated Historical Responsibility... 173 C.4.2 Basic Capability Equality: Lack of Human Security... 173 C.5 The Adaptation Fund... 174 C.5.1 Equality and Difference: Differentiated Historical Responsibility... 174 C.5.2 Basic Capability Equality: Lack of Human Security... 174 Glossary... 173 Index... 179