A high-level advisory group convened by UN Secretary-General Ban Ki-moon on mobilizing financing to help developing nations deal with climate change said today that, while challenging, the goal of providing $100 billion annually in support by 2020 is achievable.
Today’s report by the High-Level Advisory Group on Climate Change Financing (AGF) said the money must come from a wide range of sources – public and private, bilateral and multilateral. It said grants and highly concessional loans were essential for adapting to climate change in the world’s most vulnerable countries, including small island developing States.
“It will need sustained political will, appropriate public policy signals for the markets, and financial ingenuity,” Mr Ban told reporters today at a press conference in New York.
“There is no silver bullet – no ‘one size fits all’ solution for raising these funds.”
Mr Ban noted that the report comes three weeks before the opening of the UN Climate Change Conference in Cancún, Mexico.
“This report can help governments in their discussions on climate finance, which is one of the most difficult areas in the negotiations,” the Secretary-General said today. “I hope it will help them move forward.”
At the UN climate change conference in Copenhagen, Denmark, last December, developed nations pledged $30 billion of fast-track funding for developing countries through 2012 and committed to jointly raise $100 billion annually by 2020.
Co-chaired by Prime Ministers Meles Zenawi of Ethiopia and Jens Stoltenberg of Norway, the 21-member Advisory Group was set up by the Secretary-General in February.
“Without an agreement on finance we won't reach an agreement on climate,” Mr. Stoltenberg told today’s press conference.
Mr Meles said further progress would depend on the political will of leaders everywhere, but particularly in developed countries. “[The report] can be used to create an ambitious deal or a weak and miserly deal, or it can be left to languish in the desks of government bureaucrats,” he said.
The report stressed the importance of rapid and decisive actions. “Now is the time to take decisions,” it said, adding that mobilizing financing will require strong commitments to the goals set by nations to mitigate climate change and the introduction of new public instruments on carbon financing.
The careful and wise use of public funds, combined with private funds, can generate “truly transformational investments,” the Advisory Group found.
It also underscored that the prudent and results-based use of funds would greatly enhance the credibility of both developed and developing nations in raising and using resources.
According to WWF, the “conservative analysis” by the special High-level AGF sets the stage for a finance agreement to come out of the UN climate summit starting late this month in Cancun, Mexico.
“The Secretary General’s high level group has come up with the financial mechanisms, now we look to governments to come up with the political mechanisms to get the finance actually flowing,” said Gordon Shepherd, leader of WWF’s Global Climate Initiative.
Financing, agreed in principle under the Copenhagen Accord from the last UN climate summit, is needed to support action in developing countries to halt the destruction of tropical forests, speed the transition away from high-emission models of development, and to help vulnerable countries adapt to climate change impacts.
“These public funds are critical to speed up the development and implementation of new technologies, as well as for adaptation and resilience building, new energy efficient infrastructure, and for construction. It will also be used to leverage private sector finance which will contribute much of the investments needed in clean energy technologies,” said Shepherd.
“Our experience is that public investment and initiatives play key roles in mobilising and directing private investment.”
The AGF report gives strong support for financing from carbon pricing mechanisms, with one of the most promising sectors being international aviation and maritime transport, whose emissions are as yet unregulated. “We expect decisive action in Cancun to put this finance source on a fast track to implementation”, said Shepherd.
WWF claim other promising sources were downplayed because of opposition from some individual group members, with the chief casualty being the financial transaction tax (FTT).
“Financial transaction taxes have been successfully implemented in more than a dozen countries and at this point we should be examining all potential sources of finance on their merits”, said Shepherd.
Although the assumptions used by the AGF to assess the scale of potential financing generated are extremely conservative, and some members placed undue emphasis on private sector investments in meeting the $100 billion per year financing milestone, the report provides a useful starting point for moving forward.
Parties in Cancun can build upon the AGF recommendation on the way to establishing a much needed new UN Climate Fund and could contribute to host country Mexico’s wish for progress on all elements of a “balanced” Cancun package.
However, Christian Aid warned the report relies too heavily on hopes that the market will help the world’s poorest people cope with global warming and get the clean energy they need.
However, the charity also praised suggestions that governments should tax the aviation and shipping industries as one way of raising the money needed – and urged governments to back other such innovative sources of public funds.
“So far, market responses to climate change have failed to meet the needs of the poorest people in developing countries, who are least responsible but worst affected by climate change,” said Sol Oyuela, Christian Aid’s Senior Adviser on Climate Change and Poverty.
“So it’s important that governments play a key role in funding and regulating climate action. Especially today, when many governments don’t have ambitious climate policies, it is crucial that most if not all the $100 billion comes from new sources of public funding, such as taxes on planes, ships and financial transactions. It’s time for governments to use their financial imaginations.”
Christian Aid believes that this is not just a question of who’s most able to protect the most vulnerable families, who lack spending power – it is also a matter of justice. The group says it is rich countries which are overwhelmingly responsible for climate change and it is their governments which should now take responsibility for coming up with the $100 billion.
Oyuela added: “We know that the financial crisis has put huge pressure on public funds around the world difficult but the effects of climate change are so devastating for poor countries – we are talking about worsening poverty, hunger, conflict and disease – that we cannot ignore their desperate need.”
“We would also like to see the UK government give serious backing to the Advisory Group’s suggestion for a tax on aviation and shipping. Such a tax would have a double benefit: it would put downward pressure on emissions from planes and ships while also raising some of the billions which people living in poverty urgently need.
“Christian Aid has one other message for the UK government: every penny of the money that we contribute towards the $100 billion should be clearly additional to the funds we already spend on international development.
“Climate funding is a matter of justice, not charity. The men, women and children who currently benefit from UK aid spending should not be forced to pay our contribution towards global climate funds, which is what will happen if ministers raid the aid budget to pay for climate change.”
Meme Mine, Canada around 1 year, 6 months ago