5th Letter from Madrid

by Henrique Schneider*

‘COP25’ – the 25th United Nations Climate Change conference was held in Madrid, Dec 2 – 13. Henrique Schneider was on site and represented Switzerland …

Dear friends of the dough!

Money is good – but first: This was an uneasy weekend at the COP25. Well, not for everyone, but for us, the people devising regulation disguised as markets. We continued our deliberations.
This time, the facilitators are trying to negotiate without texts. Instead, they bounced ideas in informal contexts. For any normally trained person, this seems nothing out of the ordinary. For negotiators, it is an abomination. Negotiators negotiate text; that crowd is not much for thinking, let alone discussing other people’s ideas. And then there are deadlines. In theory, last Monday we decided a decision. A decision is text-bound. How to decide on a text that no one saw before?

The second week of the COP marked a much more important turn. The first week concerns itself with technicalities, the nuts and bolts, and the nitty-gritty. The second week was about grandeur. Excellencies and right honorable people, aka. ministers and state secretaries started populating these halls having their meetings, their impromptu ideas and their solution-seeking-problems-pop-ups. That is why, we needed the technical decisions, once the ministers are here, you get grandness only.
Money…

How much does a COP cost? This is difficult to say. We know that the UNFCCC – United Nations Framework Convention for Climate Change – has a core budget of some 27 Million US Dollars per year. Add the contributions to the different trust funds and action funds and you get 100 million USD. Finally, there is money in the other bodies and mechanisms belonging to the convention: The Green Climate Fund, the Clean Development Mechanism, the Climate Network Center and Network, and so on. At the end, we are looking at an operative budget of around 200 Million US Dollars.
Where does the money come from? Donors, specifically, countries. In theory, there is a method for calculating the country’s contributions. In practice, developed countries pay overproportionate. Even more pragmatic, some countries are pledged to contribute but do not. Taking only the core budget of 27 million into account, it is somewhat special that some 8 million USD haven’t been paid yet. Now it gets better: Who are the agents with the largest arrears? The US is pledged to contribute some 3 million USD. 0, Zero, it did. Brazil is some 1.5 million USD behind. Greece or Colombia were still 150’000 amiss, each. And Samoa owes 170 USD. Seriously, how dare they?

The estimates of the total cost of the COP is around 5 million USD. I am happy to report that I cost less than 2000 US Dollars (cash out). Now, I am what I call a bargain.

Writing on my behalf and not on anyone or anything else’s …
Henri


*Henrique Schneider is a professor of economics at the Nordkademie University of Applied Sciences in Elmshorn, Germany and chief economist of the Swiss Federation of Small and Medium Sized Enterprises in Bern, Switzerland.