Liu Institute researchers provide advice on managing the $100 billion annual commitment to help developing countries respond to climate change.

Vancouver, November 17, 2011  - What would you do with a pot of  money equal to the official development aid spent by all major donor countries today?

You would spend it, right? But would you spend it wisely?
 
That is a question being asked by three researchers at the Liu Institute or Global Issues at UBC. In advance of a major United Nations climate conference, they have made recommendations for managing a $100 billion annual commitment made by the international community last year to help the developing world respond to climate change.

In the current issue of Science, the three professors - Simon Donner, Milind Kandlikar and Hisham Zerriffi - argue the aid commitment made by developed nations at last year's United Nations climate conference is unprecedented and that the world must learn from the troubled history of international development to ensure that countries meet the commitment and provide real actions on the ground.

"Climate change is expected to have a much greater impact on people in the developing world, even though they are least responsible for the problem," says Donner, an assistant professor in the Department of Geography and faculty associate in the Liu Institute. "This funding is critically important. We need to make sure the money is provided and supports real action."

Quoted in a Vancouver Sun article, Donner said "Let's make sure it's not wasted or misappropriated and that the money spent delivers results. This is very challenging but also very important -
we can't screw it up."

As an example of potential loopholes in the field of climate change, the paper noted that an international system for purchasing emission credits may have inspired companies in India and China to produce the coolant HFC-23, a powerful greenhouse gas.

They then sold "credits" for destroying the HFC-23 before it was emitted to the atmosphere - actions that had no net additional impact on greenhouse gas emissions, the paper reports.

The international community's pledge to mobilize $100 billion in "new" and "additional" funding annually by 2020 was an agreement made at last year's United Nations climate meeting, the 2010 Cancun Conference of the Parties to the United Nations Framework Convention on Climate Change.

The international community will review proposals for the management and operation of this program at a meeting in Durban, South Africa, beginning on November 28.

"The Cancun aid commitment represents a large influx of money into an international aid system already fraught with problems," says Zerriffi, an assistant professor and the Ivan Head South/North Research Chair at Liu Institute for Global Issues.

"To be effective, mechanisms must be established to ensure that the funding is administered wisely so that it can be sustained through political changes and economic constraints."

Donner, Kandlikar and Zerriffi provide specific recommendations for ensuring that countries meet the funding commitment, that waste and misappropriation are minimized and that money is directed to the most effective programs.

These guidelines include instituting an "adaptive" regulatory system to close funding loopholes, employing a decentralized network of third-party auditors and adopting a scientific approach to evaluating program effectiveness.

"Randomized control trials - a form of scientific experiment - are being increasingly used to improve outcomes in a wide range of development initiatives, from local governance to child education and infectious disease prevention," says Kandlikar, an associate professor at the Liu Institute for Global Issues and the Institute for Resources, Environment and Sustainability at UBC.

"The use of such trials could be very beneficial in improving climate change outcomes."

The climate change funding, which amounts to more than twice the annual lending by the World Bank, is expected to flow through various channels, including a new Green Climate Fund (GCF) being discussed at the upcoming Durban climate summit. The UBC researchers say that careful stewardship of the initial "fast-track" funding to the GCF is critical.

"We can't afford to make mistakes in the next few years," says Donner. "That will sap the public and political will to support this incredibly important long-term initiative."