Promoting Rights-based Climate Finance for People and Planet

As the need to mitigate and adapt to climate change becomes increasingly urgent, governments and other actors must take significant steps to mobilize funds. Recent progress includes the operationalization of the Green Climate Fund, and a collective pledge under the 2015 Paris Agreement to build on a USD$100 billion per year baseline of climate finance after 2025.

Even so, the scale of the challenge of mobilizing sufficient climate finance remains considerable. Current progress should be seen in the context of the commitment made by States under the Paris Agreement to make ‘financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development’ (Paris Agreement, Art. 2(c)). It is estimated that climate funds will need to meet costs that annually run into hundreds of billions, if not trillions, of US dollars after 2030. Adaptation costs for developing countries alone have been estimated in the range of USD$140 to $300 billion per year by 2030. Pledges made by governments under the Paris Agreement that include national plans for mitigating and adapting to climate change, known as Intended Nationally Determined Contributions, have been estimated to cost approximately USD$349 billion per year.

The obligation to provide climate finance dovetails with an international commitment to finance the 2030 Agenda for Sustainable Development (2030 Agenda), which seeks to transform the global development paradigm into one that is more equitable, sustainable and resilient. The implementation of the 2030 Agenda, which includes a goal on climate change that is aligned with the Paris Agreement, is estimated to require an annual investment of around USD$6 trillion. Climate finance must be new and additional to financial flows that are directed towards sustainable development.

Given the evolving landscape for sustainable development and climate finance, this working draft paper, the results of a collaboration between the Office of the United Nations High Commissioner for Human Rights (OHCHR) and the Heinrich Böll Stiftung North America (hbs North America) seeks to clarify the normative framework that applies to the actions of States, international financial institutions and the private sector in this context. This requires aligning climate finance policies and processes with the obligations that governments and other actors have assumed under the international human rights framework and in the broader context of sustainable development cooperation.

The draft report sets out, the key human rights risks associated with climate finance, the human rights responsibilities of State and private actors in the mobilization and administration of funding and the governance of funds and the current international architecture for climate finance. While a single definition of climate finance has yet to be internationally agreed upon, the term is used here to refer to financial resources mobilized to help countries mitigate and adapt to the impacts of climate change.

The draft report argues that a human rights-based approach to climate finance is essential for several reasons:

• First, there is a clear legal imperative, anchored in binding international human rights instruments, for governments and the private sector to ensure human rights standards inform climate finance governance as well as the policies, processes, delivery methods and benefits or outcomes concerning climate finance.

• Second, a human rights-based approach pro-actively shapes the way climate finance is programmed and guards against the risk that climate finance is used to support projects that result in human rights violations and the exacerbation of social and economic inequalities. While the threat that climate change poses to the enjoyment of human rights is immense, responses to climate change also have the potential to undermine a range of procedural and substantive rights, often through impacts on access to and use of natural resources. These risks include infringement of the rights of affected individuals and communities to access to information and participation in decision-making, to the enjoyment of rights associated with livelihood, land, culture and self-determination, and to the right to redress for violations of those rights.

• Third, integrating human rights considerations into the policies, processes and actions of climate funds ensures policy coherence. This includes coherence with existing human rights obligations and principles in key international instruments concerning sustainable development.[1] Governments recently reaffirmed the need for policy coherence, including coherence across the human rights and development agendas, in the 2030 Agenda for Sustainable Development[2] and the outcome document of the Third International Conference on Financing for Development, the Addis Ababa Action Agenda.[3] Further, the Paris Agreement in its preamble explicitly recognises that States Parties ‘should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity’.

• Fourth, a human rights-based approach improves the sustainability and equitability of the outcomes of development and climate change policies.[4] It does so in part by institutionalizing processes that are participatory, democratic, and accountable, and by shifting the focus from aggregate outcomes to individual ones, which is necessary to ensure no one is left behind, that groups that are traditionally socially or economically marginalised are not further disadvantaged, and that substantive equality is advanced.[5] As agreed to by 171 governments in the Vienna Declaration and Programme of Action more than twenty years ago, ‘democracy, development and respect for human rights and fundamental freedoms are interdependent and mutually reinforcing.’[6] This underlines the value of going beyond merely ‘safeguarding’ against human rights violations and moving towards actively seeking to promote human rights as an outcome of development policy and climate actions.

• Finally, a human rights-based approach helps to unpack the rights and responsibilities of the different actors involved in climate finance, including governments, international and national financial institutions, financial intermediaries, businesses, workers, and other affected individuals and communities. This is particularly important given the difficult ‘trade-offs’ between interests that policy-makers are often perceived to engage in in the realm of climate change policy-making. The human rights framework helps to inform these decision-making processes and to clarify the circumstances in which ‘trading off’ individual and community entitlements must be resisted. It also foregrounds the critical importance of the effective participation of individuals and communities in decision-making processes and policies that affect their lives.