Fast start finance
Fast start finance supports immediate action by developing countries to strengthen their resilience to climate change and mitigate their greenhouse gas emissions, including those from deforestation.
The European Union committed to provide €7.2 billion in fast start finance to developing countries in 2010-2012. Despite the difficult economic situation and tight budgetary constraints, the EU and its Member States honoured and even surpassed this pledge by providing €7.34 bn.
Effective and balanced delivery
EU fast start funding is helping developing countries both to implement immediate, urgent action to tackle climate change and to prepare actions for the medium and long term. It includes activities related to capacity building and the development and transfer of technology. In particular, fast start finance enables developing countries:
- To protect themselves better against severe weather events and other adverse effects of climate change. This includes promoting national adaptation planning as well as funding for science and analysis to support decision making;
- To grow and develop on a sustainable low carbon path, including through support for projects on low carbon energy, energy efficiency and low carbon transport;
- To protect forests while also supporting economic development. These actions are often referred to by the acronym REDD+ (reducing emissions from deforestation and forest degradation);
- To prepare for the effective and efficient implementation of a new climate regime and scaled-up financial flows in the longer term.
The EU's fast start finance contribution was shared between these priorities. Over the entire period 2010 to 2012, 31.5% of the funding went to adaptation, or increasing developing countries' resilience to climate change; 47,3% to mitigation and investments in low-carbon development; and 13.3% to REDD+. The remaining 7.7% is not strictly classified at present, since many of the programmes and actions supported by EU fast start finance are multipurpose and may contribute to more than one of these broad objectives.
Providing transparency on commitments
Transparency about fast start financing plays a crucial role in building confidence in the international climate change negotiations. The EU is reporting to the UNFCCC on an annual basis.
Detailed reports on the state of delivery of EU fast start funding for 2010 , 2011 and 2012 were presented at the international climate talks. This list of actions provides concrete examples of activities supported by EU fast start financing, shown by recipient country and by donor.
Delivered through various channels
To ensure timely and efficient delivery, most of the EU fast start funding is being deployed through existing delivery channels. Both bilateral and multilateral cooperation instruments and initiatives are used.
EU grant funding represents almost two-thirds of the total fast start contribution over 2010-2012 and more than three-quarters in 2012. Grants and loans both have important roles to play in climate finance. Blending grants and loans helps to maximise the amount of finance available by leveraging investments and private sector co-financing.
EU climate loans, representing about a third of the EU's fast start funding, are offered on highly concessional terms that include a major grant element of up to 75%. There is demand for such loans, particularly for mitigation. EU loans are consistent with the Debt Sustainability Framework, meaning that they are not made available to countries which cannot afford to repay them.
Integrated into broader development strategies
Fast start financing comes on top of other official development assistance (ODA), of which the EU is the world's leading contributor, providing more than half of global ODA. Through ODA the EU is also the largest provider of climate finance.
The EU seeks to ensure that climate finance, including fast start funding, does not undermine or jeopardise the fight against poverty and continued progress towards reaching the Millennium Development Goals. In practice, actions to reduce greenhouse gas emissions and adapt to the negative impacts of climate change often contribute to alleviating poverty. Projects to increase resilience to climate change or to give access to efficient energy sources are two such examples.
European Commission contributing €155 million
The European Commission provided €155 million additional grant funding as its contribution to EU fast start finance in the period 2010-2012, slightly exceeding its original pledge of €150 million.
Of this amount, close to half was used to support climate-resilient, low-emission development in least developed countries and small island developing states through the Global Climate Change Alliance (GCCA).
The GCCA currently provides financial support and technical assistance to 35 countries and 4 regions. The countries and regions benefiting from EC fast start funding through the GCCA in 2012 were Burkina Faso, Central African Republic, Papua New Guinea and the Eastern Caribbean (OECS).
The rest of the Commission's fast start contribution supports general mitigation actions and actions to reduce emissions from deforestation and forest degradation in developing countries (REDD+), which have significant co-benefits including reducing poverty, protecting biodiversity, improving forest governance and promoting more equitable use of natural resources.