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7. Financial resources and technology transfer

7.1   Introduction

New Zealand is committed to supporting developing country parties to meet the dual challenges of reducing emissions and adapting to the impacts of climate change. New Zealand is addressing these challenges by delivering new and additional financial resources through a range of channels, primarily to its partner countries in the Pacific, but also to countries in Asia, Africa and Latin America.100

This chapter reports on the financial and technological support New Zealand has provided to developing countries for climate change actions since the Fourth National Communication. It covers the support given through multilateral, bilateral and regional channels, as well as specific resources provided for mitigation, adaptation and technology transfer.

In 2001 New Zealand joined the European Union, Canada, Norway, Switzerland and Iceland in making a voluntary commitment to increase financial assistance to developing countries to support climate change action. Between 2005 and 2008 New Zealand’s share of this voluntary commitment has been NZ$5 million per year. This comprises four main components:

  • the proportion of funds from New Zealand’s total annual contribution to the Global Environment Facility that is likely to be spent on climate change projects, which is estimated at 32 per cent of total expenditure between 1991 and 2008101 (see table 7.1 at the end of this chapter)
  • contributions to a range of multilateral organisations and programmes, including special funds under the United Nations Framework Convention on Climate Change (see table 7.2)
  • support for climate change-related assistance administered by the New Zealand Agency for International Development (see tables 7.3 to 7.6)
  • funding for specific projects administered through the New Zealand Ministry for the Environment (see example in table 7.7).

7.2  Multilateral support

7.2.1  Global Environment Facility

The Global Environment Facility (GEF) is the international entity entrusted with the operation of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC, or the Convention). The GEF distributes financial assistance associated with the major multilateral environment agreements on climate change, biodiversity, persistent organic pollutants, ozone-depleting substances and desertification, and also supports activities relating to land degradation and international waters. New Zealand is fulfilling its Article 4.3 commitments through its contribution to the GEF.

For the fourth replenishment of the GEF Trust Fund (2007–2010), New Zealand committed a total of NZ$8.38 million. Table 7.1 provides details of New Zealand’s total annual contributions to the GEF Trust Fund for the years 2005 to 2008. At the time of writing, negotiations are underway for the fifth replenishment of the GEF Trust Fund, covering the period 2010–2014. These negotiations are expected to be completed in early 2010.

7.2.2  Other multilateral support

New Zealand continues to support a number of UN development agencies and other international financial institutions and programmes, including those with specific programmes related to the implementation of the Convention (see table 7.2). In recognition of the importance of developing countries participating at Convention meetings, New Zealand has made an annual contribution to the UNFCCC Trust Fund for Participation.

The least developed countries and small island developing states are the countries most vulnerable to the effects of climate change and where support is needed most. New Zealand contributed NZ$1.4 million to the Least Developed Countries Fund in 2008. In its initial phase the fund has provided critical support for the completion of national adaptation programmes of action in a number of the least developed countries. These include some of New Zealand’s partner countries in the Pacific, such as Samoa, Kiribati, Vanuatu, the Solomon Islands and Tuvalu. National adaptation programmes of action help developing countries to prioritise adaptation work and focus effort where it is needed most.

7.3  Regional support

New Zealand, through the New Zealand Agency for International Development (NZAID), is a major funder of a number of Pacific regional organisations that are mandated to provide Pacific Island countries with technical and policy assistance in a number of sectors, including those affected by climate change. These organisations include:

  • the Secretariat of the Pacific Regional Environment Programme (http://www.sprep.org), which currently has the lead responsibility for climate issues and provides policy and technical support to its Pacific Island country members in meeting their commitments under the Convention and in supporting adaptation actions
  • the Secretariat of the Pacific Islands Applied Geoscience Commission (http://www.sopac.org), which provides policy and technical assistance to its members in the key climate sectors of water, energy, disaster risk reduction and coastal processes
  • the Secretariat of the Pacific Community (http://www.spc.int), which provides assistance to its members in a number of climate-affected sectors such as health, agriculture and marine resources management
  • the University of the South Pacific (http://www.usp.org.fj), which is a centre of excellence for tertiary education and research in the Pacific region, providing instruction and research programmes in areas related to, and affected by, climate change.

All Pacific regional organisations are free to allocate NZAID funding among programmes in their overall strategic plan. Donor funding is not monitored at a level that traces individual funds to specific activities, such as for climate change. This is also the case for multilateral allocations, which means the figures in table 7.2 are total allocations rather than estimates of specific expenditure on climate change actions.

New Zealand supports the development and implementation of regional frameworks, policies and action plans designed to address climate change and disaster risk. New Zealand addresses these frameworks through its membership of the Pacific Islands Forum, the region’s political and economic policy organisation. At the 2008 Forum meeting in Niue, Pacific Island leaders prepared and endorsed the Niue Declaration on Climate Change. This declaration is the first that specifically addresses the shared concern among leaders of the effects of climate change in the Pacific region. The Niue Declaration builds on the existing Pacific Islands Framework for Action on Climate Change (2006–2015), which established an integrated, programmatic approach to addressing climate change-related impacts in the region.102

New Zealand also supports the Pacific Climate Change Roundtable,103 which last met in October 2009 and is scheduled to meet every two years. The Roundtable meeting represents an opportunity for a wide range of stakeholders from government and non-government organisations to coordinate their climate actions in support of the regional frameworks.

7.4   Bilateral support

Small island developing states such as those in the Pacific are especially vulnerable to the effects of climate change and extreme weather events. New Zealand is focused on helping these countries adapt to the projected effects of climate change in order to increase their resilience to climate- and weather-related impacts.

Support for alternative and renewable energy sources through direct investment and technology transfer is also helping New Zealand’s partner countries to reduce their carbon emissions and improve energy efficiency. New Zealand takes seriously its commitment to take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other parties, particularly developing country parties, to enable them to implement the provisions of the Convention.

New Zealand contributes to technology and knowledge distribution through various Global Climate Observing System (GCOS) initiatives in the Pacific region. For example, New Zealand supports the production of the Island Climate Update, a monthly Pacific regional climate bulletin designed to build capacity among Pacific Island national meteorological services for generating their own national climate summaries and seasonal forecasts. New Zealand also provides support for the recovery and safe storage of historical climate data, and helps with a number of capacity building activities for Pacific Island hydrological and meteorological services. More details on GCOS activities are provided in New Zealand’sReport on the Global Climate Observing System (GCOS) attached to this Fifth National Communication.

Further details of support for country-level adaptation, mitigation and technology transfer actions are provided in the relevant sections below, while tables 7.2 to 7.6 contain details of annual financial contributions made from 2005 to 2008 in support of these areas.

7.5   Mitigation

New Zealand’s main areas of engagement in terms of mitigation have been in the energy and forestry sectors. The following are examples of such support.

  • At the request of the Pacific Island leaders, in 2007 NZAID supported a meeting of the Pacific energy ministers to allow high-level discussion on the major energy problems facing the region, especially with regard to energy dependence and security, rising fuel prices, renewable energy, energy efficiency and conservation, and capacity issues.
  • In 2007, New Zealand provided support for the participation by Pacific Island experts in a UNFCCC workshop on Reducing Emissions from Deforestation and Degradation in developing countries (REDD).
  • NZAID has funded a number of training scholarships in forestry management as part of a wider programme of capacity support to the Solomon Islands forestry sector. Forestry is an important sector in the Solomon Islands’ economy, but the pace of logging has far exceeded the estimated sustainable rate. At such high levels of extraction, commercially valuable forests will be depleted by 2010–2015, with consequent negative effects on the Solomon Islands’ economy and emissions.
  • The Vanuatu Carbon Credits Project was developed following a request from the UNFCCC for pilot projects to inform inter-governmental policy development on REDD. The project has been largely funded by the British Government through the Global Opportunities Fund. The funding provided by New Zealand supported a national capacity-building workshop under phase 2 of the project, which helped set priorities and consolidated Vanuatu government support and commitment. Since the completion of the workshop, funds have been provided from the World Bank, GEF and the European Union to enable a national climate change adaptation and mitigation programme. Funds have also been provided from the World Bank Forest Carbon Partnership Facility for REDD.

7.6   Adaptation

New Zealand’s support for climate change adaptation work is primarily designed to reduce the vulnerability of communities – particularly those in the Pacific – to longer term environmental change and weather-related impacts, and to improve the resilience of key climate-sensitive sectors. National and community-level actions are delivered within the context of national and regional plans, strategies and frameworks, which New Zealand helps to shape and deliver in cooperation with its development partners.

The following are examples of adaptation projects and programmes that New Zealand has helped support between 2005 and 2008.

  • In recognition of the importance of climate science and information to sound decision-making and adaptation planning, New Zealand provided support to a number of IPCC outreach sessions in the Pacific Islands during 2007 immediately following the publication of the IPCC’s Fourth Assessment Report. The sessions were designed to increase awareness of the IPCC’s findings, particularly as they relate to small island developing states in the Pacific.
  • Beginning in 2006, New Zealand has funded a four-year Climate Data Rescue programme designed to capture, preserve and digitise historical climate observations from a number of Pacific Island countries. The information collected by the project has the potential to help improve the quality of decision-making by the partner countries regarding adaptation strategies and actions.104
  • The Pacific atoll nation of Kiribati is particularly vulnerable to climate impacts and has identified a number of sectors where adaptation support is needed. This is being provided through the multi-sector Kiribati Adaptation Programme, a partnership between the Government of Kiribati, NZAID, AusAID, GEF and the World Bank. Sectors where adaptation support is being provided include freshwater resources, land management and coastal zone management. Now into its second phase, the programme aims to improve the way in which climate risks are accounted for within these sectors.105
  • In late 2006. NZAID formed a strategic partnership with the United Nations Development Programme to initiate and implement the GEF Small Grants Programme in the Pacific. The Programme was launched in 1992 with the aim of securing environmental benefits at the community level by working through non-government and community-based organisations. Primarily aimed at environmental improvement and poverty alleviation, the Small Grants Programme also helps build the capacity of communities and other national and local stakeholders to manage environmental issues. Although not targeted directly at climate change adaptation, the programme helps to improve the resilience of communities to climate impacts through improvements in environmental practice, conservation and management of natural resources.

7.7  Technology transfer

With regard to technology development and deployment, the creation of “enabling environments” is viewed as important for research and development activities, and for the commercial deployment of current, new and innovative technologies. For example, the investment community needs clear incentives when it comes to research, development and deployment of climate change mitigation technologies. A carbon price signal and the removal of environmentally harmful subsidies are critical for establishing environments that enable effective technology development and transfer.

Another important factor for encouraging research and development is cooperation. This is important in terms of increasing the size of investments (by reducing risk) and generally speeding up the development and deployment of new technologies. It is also useful for technology to be defined in the broadest context, where “technology” includes “soft technology”, such as information and knowledge sharing.

The following are two examples of New Zealand’s support for technology transfer initiatives.

  • Funded jointly by New Zealand and the United Kingdom, a new microfinance project in the Solomon Islands and Kiribati has successfully implemented a solar lighting finance scheme, enabling rural communities to trade crops for much-needed access to electricity. The project developers focused on LED lights – an innovative, energy-saving lighting system – powered by a solar photovoltaic panel and installed in individual homes and municipal buildings. To pay for the investment, rural householders plant enough extra crops to make the planned monthly repayments. They take the crops to a cash-for-crops exchange, which arranges to repay the banks. Ideally, it is envisaged the system is paid off within 24 months. This project was facilitated through the Renewable Energy and Energy Efficiency Partnership.
  • Recognising the lack of understanding of agricultural emissions and the importance of this sector to New Zealand and other countries, New Zealand established the Livestock Emissions Abatement Research Network (LEARN) in 2007 (see also section 4.3.3). LEARN is an international research network focused on improving the understanding of greenhouse gas emissions from livestock (see http://www.livestockemissions.net). Through LEARN, New Zealand supported a capacity-building workshop, GHG Measurement and Mitigation in Grazing Livestock Systems, held in Uruguay in July 2008; a workshop on Livestock and Global Warming on Andean Ecosystems, held in Peru in October 2008; and a workshop on nitrous oxide measurement and estimation, held in Chile in August 2009.

    New Zealand also established the LEARN Fellowship Programme to help facilitate the development of the wider LEARN network of researchers by allowing successful candidates to take up a short-term position in a New Zealand research institution. It is designed to facilitate in-country capacity building in developing countries with common research interests in livestock greenhouse gases. Fellowships have so far been awarded to researchers from Uruguay, Colombia, Iran, Peru, India and China.

Table 7.1: New Zealand’s financial contributions to the Global Environment Facility, 2005–2008

Contributions1 (NZ$ million2) to the GEF Trust Fund
2005 2006 2007 2008 Total
2.78 3.42 3.28 3.12 12.6
  1. Annual contributions represent the combined total of New Zealand’s payments to the GEF Trust Fund in the financial year (July to June). GEF projects address six global environmental issues, or “focal areas”, of which climate change is one. Expenditure under the climate change focal area is estimated to be approximately one-third of total expenditure.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between = 0.49 and 0.81 USD.

Table 7.2: Financial contributions to multilateral institutions and programmes, 2005–2008


Institution or programme

Contributions1 (NZ$ million2)

  2005 2006 2007 2008 Total
Multilateral institutions
1. World Bank 9.21 20.01 11.03 20.37 60.62
2. Asian Development Bank 12.83 12.57 12.16 6.37 43.93
3. United Nations Development Programme 8.00 8.00 8.00 8.00 32.00
4. United Nations Environment Programme 0.25 0.21 0.21 0.35 1.02
5. UNFCCC Trust Fund for Participation* 0.10 0.10 0.10 0.50 0.80
6. UNFCCC Least Developed Countries Fund* 1.80 1.80 1.80 1.40 6.80
7. UNFCCC Trust Fund for Supplementary Activities* 0.12 0.11 0.06 0.29
8. Montreal Protocol 0.58 0.53 0.46 0.55 2.12
Total 32.89 43.33 33.82 37.54 147.58
Multilateral scientific, technological and training   
1. Secretariat of the Pacific Regional Environment Programme 0.95 1.08 1.08 1.43 4.54
2. Secretariat of the Pacific Islands Applied Geoscience Commission 1.40 1.64 1.80 2.05 6.89
3. Secretariat of the Pacific Community 6.24 6.27 6.27 6.40 25.18
4. University of the South Pacific 4.00 4.00 4.00 4.00 16.00
5. Consultative Group on International Agricultural Research (CGIAR) 0.90 0.90 0.90 3.19 5.89
Total 13.49 13.89 14.05 17.07 58.50
  1. Annual contributions cover calendar years, except for those institutions or programmes marked with an asterisk (*), which cover financial years (July–June). Contributions represent the full amounts provided to the organisation for the full range of activities covered by their programmes, which include climate change mitigation and adaptation.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between = 0.49 and 0.81 USD.

Table 7.3: Bilateral and regional financial contributions1 related to the implementation of the Convention, 2005 (millions of NZ dollars2)

 

Mitigation

Adaptation

 

Recipient country/region Energy Transport Forestry Agriculture Waste management Industry Capacity building Coastal zone management Water resources Other vulnerability assessment Total
Pacific regional 0.07     0.51   0.01 1.19 0.25   0.26 2.29
Tonga 0.04                   0.04
Pakistan 0.01       0.01           0.02
Cook Islands             0.01       0.01
Solomon Islands     0.01       0.01       0.02
Samoa         0.01           0.01
  1. Sum of contributions provided by the New Zealand Agency for International Development and the New Zealand Ministry for Environment.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between 0.49 and 0.81 USD.

Table 7.4: Bilateral and regional financial contributions1 related to the implementation of the Convention, 2006 (millions of NZ dollars2)

Mitigation Adaptation Total
Recipient country/region Energy Transport Forestry Agriculture Waste management Industry Capacity building Coastal zone management Water resources Other vulnerability assessment
Pacific regional 0.30     0.16 0.04 0.01 1.81 0.40   0.08 2.80
Tonga 0.57                   0.57
Kiribati             0.28 0.15   0.10 0.53
Philippines             0.19 0.01     0.20
Pakistan 0.02       0.02           0.04
Cook Islands             0.01       0.01
  1. Sum of contributions provided by the New Zealand Agency for International Development and the New Zealand Ministry for Environment.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between 0.49 and 0.81 USD.

Table 7.5: Bilateral and regional financial contributions1 related to the implementation of the Convention, 2007 (millions of NZ dollars2)

Mitigation Adaptation Total
Recipient country/region Energy Transport Forestry Agriculture Waste management Industry Capacity building Coastal zone management Water resources Other vulnerability assessment
Pacific regional 0.21     0.87 0.04   1.30 0.70   0.44 3.56
Kiribati             0.29 0.15   0.10 0.54
Solomon Islands             0.05     0.05 0.10
Pakistan 0.04       0.04           0.08
Tonga 0.05                   0.05
Philippines               0.01     0.01
Samoa                     0
Vanuatu     0.04               0.04
  1. Sum of contributions provided by the New Zealand Agency for International Development and the New Zealand Ministry for Environment.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between 0.49 and 0.81 USD.

Table 7.6: Bilateral and regional financial contributions1 related to the implementation of the Convention, 2008 (millions of NZ dollars2)

  Mitigation Adaptation Total
Recipient country/region Energy Transport Forestry Agriculture Waste management Industry Capacity building Coastal zone management Water resources Other vulnerability assessment  
Pacific regional 0.23 0.03   0.16 0.10 0.01 2.71 0.26   0.19 3.69
Kiribati             0.30 0.15   0.10 0.55
Viet Nam             0.37       0.37
Indonesia 0.11   0.11     0.15         0.37
Zambia 0.16                   0.16
Philippines               0.10     0.10
Ecuador       0.05             0.05
Pakistan 0.02       0.02           0.04
  1. Sum of contributions provided by the New Zealand Agency for International Development and the New Zealand Ministry for Environment.
  2. Over 2005 to 2008, the value of 1 NZD has fluctuated between 0.49 and 0.81 USD.

Table 7.7:  Description of a selected project or programme that promises practicable steps to facilitate and/or finance the transfer of, or access to, environmentally sound technologies

Project/programme title

Loss Reduction Project: Tuvalu

Purpose: To help the Tuvalu Electricity Corporation (TEC) provide a higher quality of electricity services at lowest cost to consumers.
Recipient country Sector Total funding Years in operation
Tuvalu Energy NZ$138,500 November 2007 – June 2009

Description

In 2007, energy ministers from the Pacific region met in Rarotonga, Cook Islands, to discuss energy issues facing the region. This resulted in a communiqué highlighting areas for action. To assist in achieving the desired outcomes, New Zealand offered to help the TEC (Tuvalu Energy Corporation) to provide higher quality electricity services at the lowest costs to consumers. The work was administered by the Ministry of Economic Development and was funded through the New Zealand Government Agencies Fund.

The first phase of the project was completed in late 2008 and included:

  1. a review of distribution losses, both technical and non-technical
  2. identification of opportunities for system design and operational performance improvements
  3. a review and identification of demand-side management and renewable energy opportunities.
The second phase implemented the recommendations from phase 1. Phase 2 included:
  1. training the TEC staff in the distribution system and in asset management
  2. developing methods for the TEC to evaluate solar photovoltaic options
  3. feasibility studies on the use of copra oil and wind for electricity generation
  4. identification of opportunities for greater energy efficiency, and the setting up of a programme for improvement together with policy options for government
  5. recommendations for improved corporate management.

Indicate factors that led to the project’s success

The training/capacity building component means that the TEC can improve its service itself and be less dependent on external consultants. As well as identifying key renewable energy options for Tuvalu, the project developed methods through which the TEC could evaluate renewable energy options itself. By considering the overall design of the electricity system, and making recommendations on corporate management, the project may also help to ensure the continued economic viability of Tuvalu’s electricity company.

Technology transferred

The project recommended a number of ways that Tuvalu can reduce its reliance on diesel generation through a greater use of wind, copra oil, biogas and energy-efficiency technologies.

Impact on greenhouse gas emissions/sinks

Depending on the outcome of the project, a greater use of renewable energy and energy-efficiency measures will reduce Tuvalu’s use of diesel for electricity generation and reduce greenhouse gas emissions.