There’s only one taxpayer – and we need to decide whether serving our own people’s needs should be the priority over external demands to fund ill-defined, ideological programs like the “Green Climate Fund” which has poorly defined objectives and seems to be a large slush fund. How much will we end up contributing? You’d be surprised. Read on.

 WHAT IS CANADA’S SHARE OF THE GREEN CLIMATE FUND?

Contributed by Robert Lyman @June 2016

At the COP 21 climate conference in Paris in December, 2015, the participating governments agreed that one of their priorities was to ensure that developing countries have enough funds to develop and implement “strategies, regulations, and action plans” to reduce greenhouse gas emissions and to help their economies adapt to the effects of climate change. Paragraph 54 of the agreement states the intention of the Parties to continue and expand the Green Climate Fund, previously established at the Copenhagen conference. Specifically, paragraph 54 confirms that:

“Developed countries intend to continue their existing collective mobilization goal through 2025 in the context of meaningful mitigation actions and transparency on implementation; prior to 2025 the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries;”

The COP21 agreement is, at this stage, a political agreement. It is not a treaty, there are no binding legal requirements, there is no formula for determining what each country’s obligations are, and there are no penalties for non-compliance. Nonetheless, the governments of certain countries have proceeded to act as though the agreement were binding. Prime Minister Justin Trudeau of Canada, in one of his first acts after being elected, committed Canada to contribute $2.65 billion to the Green Climate Fund.

Since then, outside of the Finance departments of various countries and the immense United Nations bureaucracy that supports the climate change apparatus, there has been almost no news or analysis published about what paragraph 54 of the agreement will mean.

Which, for example, are the “developed countries” to which the paragraph refers? It is possible that this refers to the member countries of the Organization for Economic Cooperation and Development (OECD), except that the OECD now includes 30 members, a number of which have recently joined or have GDP levels well outside the top tier of countries. One might define the developed countries in terms of those with the highest per capita incomes, but that would include several countries with extremely high incomes from petroleum production but relatively small economies overall. No doubt, the sponsors of paragraph 54 had someone in mind, but whom?

In this note, I will speculate on the methodology that could be used to determine which countries would be considered “developed” and, more importantly, which share of the $100 billion (at least) per year each country would be responsible for.

One way would be to consider as “developed” the 25 countries with the highest national incomes (GDP), and to attribute to each of them as their “share” of the Green Climate Fund a percentage equal to their share of the top 25 countries’ income. According to the International Monetary Fund (IMF), the top 25 countries in the world had a combined GDP in 2015 of $61.4 trillion. The United States had the highest income, with $17.9 trillion and China was second with $11 trillion. Canada was in tenth place, with a GDP of $1.55 trillion (measured in U.S. dollars).

A quick scan of the list indicates a possible problem. It includes a number of countries such as India, Brazil, Indonesia, Mexico, Turkey, Argentina, Taiwan and Nigeria that have a high GDP but very large populations and thus low per capita incomes; many are usually considered to be “developing” countries.. Russia ranks in twelfth place and is a former superpower but it is a country now in deep economic difficulties; would it agree to contribute as a “developed” country? Even Poland falls into a grey area. Yet eliminating these countries from the list takes off 16.5 % of the potential GDP to be tapped.

Canada’s share of the Top 25 GDP is 2.5%. Thus, Canada would be committed to contribute 2.5% of $100 billion per year. Assuming that the $100 billion are U.S. dollars, that equals CDN $3.26 billion per year at current exchange rates. The Trudeau contribution of CDN $2.65 billion announced in Paris would be considerably less than one year’s obligation. If a smaller list of donors were included in the list of “developed countries”, Canada’s contribution would be higher still.

Canada’s Official Development Assistance, or foreign aid, of all kinds totaled U.S. $4.3 billion in 2014, the most recent year for which confirmed figures are available. As it is expected that the Green Climate Fund contributions will supplement, and not displace, current Official Development Assistance, that means Canada’s total contributions to developing countries would rise by 58% to U.S. $6.8 billion per year, or almost CDN $8.9 billion per year. That is more than is spent annually on Canada’s aboriginal peoples.

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