An escalation of the Eurozone crisis could lead to a £3 billion UK climate change funding gap, according to a report by Ernst & Young and reported by GreenWise.
Currrent austerity measures across 10 of the world’s major economies is already threatening a $22.5 billion (£14.3 billion) climate change funding gap by 2015. But Ernst & Young warns that could double if the Eurozone crisis worsens, with the UK amongst the worst hit countries.
The Ernst & Young report, which also surveyed business expectations of a climate change deal being agreed in Durban, forecast the UK could be spending $4.2 billion (£2.6 billion) less on climate change measures by 2015, behind only Spain, which is forecast to spend $5.1 billion (£3.2 billion) less.
However, in the event of a deepening Eurozone crisis, Germany would be the hardest hit, spending $8.3 billion (£5.3 billion) less on climate change. The UK’s spend would drop to $5 billion (£3.1 billion). A worsening situation in the Eurozone would see Spain, Japan and the US face a gap of more than $6 billion (£3.8 billion), and France facing a gap of $5 billion (£3.1 billion).
The report, 'Durban Dynamics: Navigating For Progress On Climate Change’, also reveals little optimism among businesses that the forthcoming UN climate summit in Durban will secure an effective global deal. Out of a survey of 300 business leaders from across 50 countries, it found less than a quarter expect a deal to be done at Durban.
"The conditions under which the Durban meeting will take place could not be more challenging," Juan Costa Climent, Global Climate Change and Sustainability Services Leader at Ernst & Young, said. "Policymakers head to Durban under storm clouds of fiscal austerity, a global focus on national interests, and widespread scepticism for the prospects of securing a legally binding successor to the Kyoto Protocol.
"The enormous projected funding gap revealed by this report suggests continuing economic uncertainty is pushing a low carbon economy further out of reach."
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