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Europe says €100 billion needed in climate change financing for developing countries
The heads of European Member States agreed in late October that developing countries will need €100 billion a year by 2020 to adapt to climate change, although they failed to reach consensus on how much money would flow from Europe’s coffers. At least half of the €100 billion is expected to come from private financing, but the rest would need to be covered by public sources. Climate-change financing for developing countries has proved contentious in Europe. A number of Central and Eastern European countries want to know how the costs will be split among European Member States before committing to a particular figure. The failure of the EU to commit to concrete amounts of long-term climate-change financing for the developing world comes amidst growing pessimism among governments on the odds of reaching a binding climate-change treaty this year. Following talks in Barcelona in early November, the United Kingdom predicted that negotiations would take at least another year. The Barcelona meeting was the last major round of climate change talks before the U.N. Climate Change Summit in Copenhagen, Denmark, in December.
Study finds little market opening for sugar under draft WTO trade deal
A study published by the International Centre for Trade and Sustainable Development (ICTSD) finds that the European Union and United States could avoid steep tariff cuts on sugar, using opt-out clauses in a draft farm trade deal at the World Trade Organization (WTO). The study reveals that the EU, US and Japan could avoid cuts of 70 percent in their sugar tariffs by using clauses that allow countries to protect “sensitive” farm products. Gentler tariff cuts for sensitive products would have to be compensated by expanded import quotas: however, in the EU, the new quota would represent no more than 2 million metric tons, representing a 700,000 metric ton increase (to 4 percent of domestic consumption). The US sugar quota might expand by even less, with an increase of below 300,000 metric tons to 1.4 million tons. Overall, quota expansions “would represent only 3 percent of world trade” concludes Amani Elobeid, the author of the report. Countries that have traditionally exported to the EU under preferential trading arrangements are likely to be most affected by further liberalisation, the paper notes, with high-cost producers such as Barbados, Fiji, Guyana, Jamaica or Mauritius particularly likely to lose out.
To view this report in full, see “How Would a Trade Deal on Sugar Affect Exporting and Importing Countries?”, at http://ictsd.net/i/publications/57666/
Transaction costs add up for the EU’s overseas development aid
The European Union could save €3 to €6 billion a year by streamlining the delivery of overseas development aid, according to a study commissioned by the European Commission. The study concludes that the proliferation of different donors and fragmented aid programs present the greatest obstacle to the cost-effective distribution of development assistance. Currently, aid activities are broken down into tens of thousands of different programs, each costing €90,000 to €140,000 on average in staff and consultancy fees for design, formulation, appraisal and approval. Not only would consolidating these activities save money, it could also lessen the burden placed on governments receiving aid. Referring to a 2005 survey, the report notes that governments receiving aid complain of the process “as donor-driven, procedurally complicated and leading to a lack of control and ownership of its own development ambitions and strategies”. The report also warns that the volatile nature of European aid makes it difficult for developing countries to effectively allocate aid funds, reducing the value of aid by between 8 and 20 percent.
To view this report in full, see “The Aid Effectiveness Agenda: Benefits of a European Approach”, available at: http://ec.europa.eu/development/icenter/repository/AE_Full_Final_Report_20091023.pdf
Regional Economic Outlook for sub-Saharan Africa
The International Monetary Fund (IMF) expects growth in sub-Saharan Africa to slow to 1 percent in 2009, as the global economic crisis puts the brake on nearly a decade of strong economic performance in the region. Middle-income countries have been more affected by the crisis than low-income countries, according to the IMF. However, the IMF is optimistic that economies will return to higher levels of growth in the coming years; growth in the region is expected to rise to 4 percent in 2010 and 5 percent in later years, according to the IMF’s latest economic survey for the region, published in October. The IMF notes that the impact of the crisis on debt in the region has varied between countries. Overall, however, if growth recovers, it does not expect that most sub-Saharan African countries will be more vulnerable to debt as a result of the recession.
To view this report in full, see “Sub-Saharan Africa: Weathering the Storm”, available at: IMF_EN_1009_IMF_Regional-Economic-outlook.pdf
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