Senate advances 2011 budget including fast-start climate finance

This summer the Senate Appropriations Committee released budget recommendations for 2011 which include over 1.2 billion to combat the impacts of global warming pollution and shift to a clean energy future.  The funding will provide critical investments in developing countries to reduce tropical deforestation, drive clean energy investment and help vulnerable people adapt to climate change.  The Senate recommendations released in July represent a significant increase from the 2010 climate change finance budget, despite some cuts by the Senate to the President’s proposed budget.

The anticipated 2011 climate funds are a good first step, but the United States must step up its level of investment over the next few years to shift developing countries away from highly polluting energy programs and toward low-carbon energy pathways.  Increased public investment will be needed to scale up to the goals in the Copenhagen Accord.  The funds available through this budget cycle will be an important part of the global fast start-finance commitments and the anticipated Green Fund to be agreed in Cancun this December.   The Senate’s recommendations demonstrate a considerable move toward the level of investment required in the short term to achieve real actions to reduce emissions around the world.

The Senate:  

recognizes the challenges posed by global warming and the urgent need to help developing countries reduce carbon emissions; develop clean energy and increase energy efficiency; adapt to rising temperatures, water and food scarcity, and rising sea levels;

These activities are in our own best interest.   Driving clean energy and technology around the world enables the U.S. to tap into new markets.  Protecting forests to reduce emissions protects air quality and our health.   Finally, building climate security for the world’s most vulnerable people may help prevent disruptive migration and protect all the development gains already made in health, education and political stability.

The agencies primarily responsible for international climate finance are the Agency for International Development ($390 million), the Department of State ($176 million), and Treasury ($745 million). The funds will move bilaterally through direct in-country activities and multi-laterally through U.S. contributions to the World Bank and other international funds.  In addition to these three agencies, other scientific and technical agencies like NASA, NOAA and EPA are conducting climate science research to help people predict and adapt to climate change.  The Department of Energy will continue to direct research and development in clean tech and share scientific data and expertise with counterparts around the world.  The other agency contributions are on the order of $100 million.

So how exactly will the funds be spent?

Adaptation 287 million

Adaptation activities will consist of helping countries and communities plan for and implement solutions to the threats of disasters, increased floods and water scarcity, and changes in agricultural productivity.  The Senate has recommended approximately $47 million less than the $334 million proposed by the President.   This amount is still a significant increase from earlier years.  Perhaps of note, the Senate increased funding for the Special Climate Change Fund, which helps the world’s poorest people adapt to climate impacts.

Clean Energy 657 million 

Clean energy investments will sustain programs in the areas of energy efficiency, low-carbon energy, clean transport and energy sector reforms to promote sustained investment in energy sectors.  In the President’s Budget Proposal and the Senate Recommendation, the World Bank’s Clean Technology Fund receives the lion’s share of the funding, although the Senate did cut off 30 million.  As the World Bank rewrites its energy strategy this summer, Congress is looking closely at how it operates these funds and other energy investments.  Other key cuts here are in USAID funding for clean energy and funds for the Global Environmental Facility’s clean energy work.

Sustainable Landscapes 292 million

Sustainable Landscapes funding will support critical programs that protect natural forests and reduce emissions efficiently.  To protect forests and reduce emissions from deforestation and forest and peatland degradation, the Senate allocated $150 million to USAID and the Department of State.  With an additional $122 million for international programs dedicated to sequester emissions of greenhouse gases through forest preservation and conservation.  The change to the President’s proposed budget is a $55 million cut (primarily to USAID). 

Overall the Senate recognized through its budget that these climate funds are critical to reduce emissions and help vulnerable people adapt to the on-going impacts of climate change.  The three programs combine to a total of over $1.27 billion.

The next steps for the budget require Congress to reconcile the recommendations from both the House and Senate on the FY2011 budget.  The House and Senate must complete all action on appropriations bills prior to the start of the fiscal year (October 1) or enact a continuing resolution.  It is likely that Congress will need extra time to address the budget – requiring a stop-gap Continuing Resolution-allowing government programs to continue despite lacking an agreed budget.    But the indications from the House and Senate recommendations on FY2011 climate finance lend a clearer picture of what we can expect from the final FY2011 budget.    The 2011 budget is likely to be a significant down payment on the critical climate finance investments required in the near-term, but there will also need to be a sizeable and regular increase of U.S. climate investment over the next several years to meet global need for clean energy investment and tools to help people adapt to climate impacts.

[1] There was a notable increase in biodiversity funding for USAID which is related to but not listed in the Sustainable Landscapes table above.  Biodiversity funding increased over 100 million above the President's requested $114m.  The Senate recommended $215m for this funding saying "The Committee also supports programs to protect tropical forests and other biodiversity, and recommends not less than $215,200,000 including $35,000,000 for USAID’s conservation programs in the Amazon of which $20,000,000 is for the Initiative for Conservation in the Andean Amazon and $15,000,000 is for the Brazilian Amazon."