Owusu on Africa: Climate ‘compensation’ fund for developing countries – bottom-up implementation, transparency and accountability need to be ensured

By Fidel Amakye Owusu

During COP 27 last year in Sharm El Sheikh, South Sinai, Egypt, the issue of compensation for developing countries suffering the consequences of climate change was once again brought forward.

For decades, developing countries have argued that, for any consequential contribution from them towards the global fight against climate change, they must be supported by more developed and financially sound economies to mitigate the inimical effect of the economy.

They believe that they have contributed little or nothing in respect of carbon emissions that account for a significant part of the causes of global warming. Consequently, the argument has been that it is only fair that some cushioning is given to them.

Even for fairly large economies like Brazil, its management of the Amazon (a major lung of the earth), is considered to be a reason that requires significant compensation.

And so what?

On the first day of COP 28 in Dubai, United Arab Emirates, almost all participating nations have finalized the creation of the fund to help mitigate the effect of climate change in these countries. Already, the United Arab Emirates and Germany have pledged US$100 million each to the fund.

This is even before it is officially launched in 2024. It is scheduled to be under the supervision of the World Bank with a representative of the developing countries on a board yet to be created.

While the news remains good, this would not be the first interventionist fund created in the world. For it to have actual impact some values and measures need to be ensured.

Bottom-up approach

Firstly, programs and projects that will be sponsored by the fund must have a bottom-up approach. In many cases, the top-down approach to implementing policies in developing countries, especially in Africa does not do make the right impact. With most of the people During COP 27 last year in Sharm El Sheikh, South Sinai, Egypt, the issue of compensation for developing countries suffering the consequences of climate change was once again brought forward.

For decades, developing countries have argued that, for any consequential contribution from them towards the global fight against climate change, they must be supported by more developed and financially sound economies to mitigate the inimical effect of the economy.

They believe that they have contributed little or nothing in respect of carbon emissions that account for a significant part of the causes of global warming. Consequently, the argument has been that it is only fair that some cushioning is given to them.

Even for fairly large economies like Brazil, its management of the Amazon (a major lung of the earth), is considered to be a reason that requires significant compensation.

Creation of the fund

On the first day of COP 28 in Dubai, United Arab Emirates, almost all participating nations have finalized the creation of the fund to help mitigate the effect of climate change in these countries. Already, the United Arab Emirates and Germany have pledged US$100 million each to the fund.

This is even before it is officially launched in 2024. It is scheduled to be under the supervision of the World Bank with a representative of the developing countries on a board yet to be created.

While the news remains good, this would not be the first interventionist fund created in the world. For it to have actual impact some values and measures need to be ensured.

Firstly, programs and projects that will be sponsored by the fund must have a bottom-up approach. In many cases, the top-down approach to implementing policies in developing countries, especially in Africa does not do make the right impact. With most of the people affected by the menace being the poor and vulnerable, their participation and prioritization in the formulation and implementation of policies and programs should be paramount.

Also important is transparency and accountability. While contributors of the fund intend to achieve set goals, beneficiary states must be made to be transparent and accountable with its utilization. Often funds are lost to corruption and other unethical practices common in developing countries.

As part of the institutionalization of the fund effective monitoring mechanism and accompanying sanctions must be created for the prudent use of resources. States that do not follow these standards could penalized to make them more responsible or deter others from doing the same.

Institutional support for local institutions that will be mandated to implement policies and programs will also be essential.

Fidel Amakye Owusu is an International Relations and Security Analyst. He is an Associate at the Conflict Research Consortium for Africa and has previously hosted an International Affairs program with the Ghana Broadcasting Corporation (GBC). He is passionate about Diplomacy and realizing Africa’s global potential and how the continent should be viewed as part of the global collective.