Environmental Issues at the United Nations
Pace University, Law School, New York
8th March, 2011

H.E. Dr. Palitha Kohona
Permanent Representative of Sri Lanka to the United Nations

Good afternoon.

We are entering a critical stage in our efforts to address the serious threat of climate change. There is no doubt that human caused factors are responsible for the phenomenon of climate change. The vast majority of scientists agree on this. Increasingly, the skeptics are coming over.  Significantly, there was agreement among states on this at Cancun.  The final document recognizes this.  However, we are still haggling on what we should do and who should pay for doing it although the principle of common and differentiated responsibility was agreed upon at least by 1992. With every passing day we see the problem getting further aggravated. Highly respected studies have suggested that the cost of addressing the problem now would be much less than the cost of repairing the eventual damage. We are really talking about the living conditions of the next generation, the rich, the poor, the democratic, the non-democratic, in fact all of us.  We are talking about the world  that we will leave behind.  Today, I will limit my comments to the question of funding the cost of addressing the problem. 

One slight reason for optimism was the commitment made in Cancun to make $30 billion available for the period 2010 – 2012 to vulnerable developing countries to meet the costs of adaptation and mitigation. Though inadequate and most developing countries may also not fall within the definition of “vulnerable”.  This is, however, a start. My country, for example, may not fall within the definition of “vulnerable country”, although erratic weather patterns and serious flooding have become a major challenge to us.  In addition, developed countries pledged $100 billion per year by 2020 to developing countries for mitigation activities. At the rate CO2 emissions are increasing at present, this may be too little too late. A further sum of $4 billion was pledged to the REDD programme.  Again, a select group of countries might benefit from this.  

However the source of these funds has not been clearly identified. A vague formula with ample wiggle room, "new and innovative sources of funding" has been used again. The challenge facing the international community is to identify these sources of funding and ensure that they are made available in an effective manner. The real question is not how we can avoid meeting our commitments.  But how we can leave behind a habitable world for the next generation.  This exercise should not be looked at, as purely a negotiation to outsmart someone else.  This is not an opportunity to out argue each other.  The idea of a green economy is also being pushed without much details of funding for such an economy.  What a green economy is remains to be defined.  It sounds awfully like sustainable development.  Is it rebranded sustainable development?

Do we need to spend time defining this new concept while the slips dangerously downwards. 

Funding is crucial to achieve these goals. Developed countries, which have access to new and effective technologies and funding will make their way towards a green economy sooner or later. This is happening already.  Public opinion pressure and democratic mechanisms will ensure that outcome in the advanced democracies. Wind power generation, solar panels and bio fuels are becoming common place.  In poorer countries the situation is more complex. While development is the priority in a world where close to a billion people live on less than $2 a day, and millions go to bed hungry,  ensuring that they adopt an environmentally sustainable development model would require considerable amounts of additional funding.  Funding would be required to finance the new technologies.

In the first instance, direct funding assistance from developed countries is a must. Such funding is expected and would suggest a seriousness on their part to help developing countries to address the problems of adaptation and mitigation in a sustainable manner. While challenges such as the global financial crisis can be offered as legitimate excuses for not coming up with all the funds, there will be a credibility gap given the astounding speed with which the developed world came up with billions of Dollars in funds to rescue the ailing financial sector and continues to do so. Billions are being spent to bail out ailing countries and industries.  If there is a political will, it would seem that a substantial portion of the funds can be produced by the developed countries. Saving developing countries could be part of the effort to introduce a green economy.  There should also be agreement that existing development assistance should not be diverted to meet commitments relating to the climate, although the two could be complementary.  We recall that the commitment to provide 0.7% of GDP is still to be met by most developed countries.  It is also a sine qua non that environmental conditionality not be used as a new barrier to trade.  Trade barriers are a major constraint on development and would be achieving a green economy. 

The multilateral financial institutions should set the example by allocating a part of their funds purely for the purpose of facilitating the realization of a green economy, taking care to avoid selectivity based on political considerations.  Their involvement will be a catalyst for private sector financial institutions to get involved in a similar manner. Private sector financial institutions which are fast recovering from the global financial crisis, control access to vast financial resources.  It is recalled that the IFC pioneered the Equator Principles which were later adopted by major financial institutions. Bilateral Financial Institutions have made $ 13 billion available to a range of countries, including 95 developing countries in 2009.  Eastern and South Asian countries have received the lion’s  share of funding mainly for the transport and energy sectors. 

A possible source of funding could be the charities. Already many charities disburse significant funds in the developing world for worthy causes. For example the Bill Gates Foundation. If the appropriate policy framework is established both in the home countries of the charities as well as the recipient countries, it may be possible to direct the philanthropic tendency of individuals and corporations towards environmental mitigation and adaptation causes in developing countries.

Corporations can also encouraged to devote a part of their revenues and capacity for environmental mitigation and adaptation measures in the developing countries where they operate. Many corporations have a pro bono component.  This would be good for their global image, contribute to fostering their markets and certainly would help with staff morale and eventual profitability. Today's global corporations have more funds at their disposal than many developing countries.  A good corporate image contributes to eventual profitability and staff retention.  Even many developing country corporations have endeavoured to establish a green image which help them with marketing.  Sri Lankan garment manufacture’s after strictly complying with environmental standards, have marketed their product as “Garments without guilt”. 

Developing countries themselves should establish the necessary policy framework, including tax benefits, to encourage approaches that would help to create a green economy.   The energies of individuals could be properly directed and encouraged.  Better practices could be fostered through better policies.  Proposals have been made for taxing electronic messaging and airline traffic.

A green economy is easy to prescribe.  But is difficult to implement.