Thursday, August 6, 2009

'Good' Conditionalities for Climate Funds?

Conditionality on funds between the North and South has a bad rap. Northern countries, especially via the IMF and the World Bank, have a long history of making what many consider to be unfair changes in macroeconomic policy, such as the much-detested Structural Adjustment Programs.

With Climate Negotiations in Copenhagen around the corner, conditionality has once again risen to the fore. Generally, climate funds from the North to the South are considered compensation - especially adaptation. But what about mitigation - should there be conditionalities on those funds?

Climate Strategies has done some interesting work observing that while conditionality IMF-style is not necessarily the best approach, conditionality has been successful within the EU. The difference? Namely, the degree to which countries agree to the conditions. It's the difference between being told you have to show up to work on time even if you have to get up before dawn or if you and your co-workers choose to be at work on time even though you will all have to get up before done. OK, maybe not the best example, but I hope you get my point: it's a question of all parties owning the conditions without one party forcing the other to agree to them, if the later really doesn't want to. And there's a greater mutuality and trust. There is a recognition that everyone is giving up something (I haven't heard people talk about the sacrifice that the World Bank makes on behalf of its 'clientelle').

This opens a new door for conditionality. Is it possible to have fair conditionality? Yes. But there are tremendous power imbalances between the north and the south - not to mention a history of broken promises. The verdict is still out on whether 'fair' conditions can be found.

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