How do you get countries to put money on the table for adapting to climate change when a second recession at home might be a real possibility? The question hung like a big grey cloud over the climate change talks that began in the German city of Bonn on 31 May.
"Times are harsh, especially in Europe," Yvo de Boer, the top UN climate change official, commented in a briefing ahead of the talks. "But US$10 billion a year for three years from all industrialized countries is not an impossible call; meeting this promise will establish greater trust between developing and developed nations."
Short-term funding of $30 billion to kick-start climate change adaptation and mitigation, and a long-term $100 billion a year by 2020 were pledged in the last round of climate change talks in Copenhagen in December 2009.
The other promise was to keep the global temperature increase below 2 degrees Celsius to avoid catastrophic impacts of climate change, such as the submergence of islands, which some small island countries fear could happen in the next few years.
Two NGOs suggested ways to help poor countries "without breaking the bank". Oxfam, the UK-based development agency, in a report marking the start of the talks, urged rich countries to view funds for climate change adaptation and mitigation as "an investment ... in a common future", and noted that "In the current economic climate the sums required appear daunting, but they are well within the realms of possibility."
Antonio Hill, senior policy advisor at Oxfam, suggested: "The best way to do this is to put together a package of innovative mechanisms that don't rely on contributions directly from rich country budgets."
Hill and Tom Picken, of Friends of the Earth, an international environmental network, suggested a financial transaction tax that could raise billions of dollars a year.
"Many countries and the G20 [group of industrialized countries] are considering a bank levy, [but] there is a real risk it will become an insurance fund to bail out the financial sector in future instead of providing climate and development with a secure source of funding, and better regulating the financial industry to prevent future collapse," Picken cautioned.
Oxfam proposed raising money from budgets for subsidising fossil fuels, or by auctioning emission allowances in domestic Emissions Trading Schemes (ETS), in which energy-intensive companies can buy and sell permits allowing them to emit carbon dioxide. The European Union has used ETS as its main mechanism for reducing emissions.
Countries could also raise money with bonds backed by Special Drawing Rights held by the International Monetary Fund. "The fight over the longer term for a safer climate will take generations," De Boer commented.
"As investments designed to reduce vulnerability (rather than boost productive capacity), there is a risk that adaptation expenditures may be first to face the axe when national budgets are trimmed," the Oxfam report warned.
"[Money] pledged for fast-start funding ... is expected to be largely overdue ODA [Official Development Assistance], hence not new and additional money at all," said Picken, noting a concern raised by other environmental NGOs.
"I think it is also important to ensure debates about climate finance are clearly framed around the issue of compensation rather than aid. Developed countries are trying to set a precedent that it is okay to count climate finance as ODA; although they share some goals, they must be contributions on top of each other," he said.
Tewolde Egziabher, head of Ethiopia's Environmental Protection Authority and effectively Minister of the Environment, was optimistic. "We have to keep at it because it affects all of us. We will have an agreement - if not in Mexico, then in Johannesburg next year [2011]."
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"Times are harsh, especially in Europe," Yvo de Boer, the top UN climate change official, commented in a briefing ahead of the talks. "But US$10 billion a year for three years from all industrialized countries is not an impossible call; meeting this promise will establish greater trust between developing and developed nations."
Short-term funding of $30 billion to kick-start climate change adaptation and mitigation, and a long-term $100 billion a year by 2020 were pledged in the last round of climate change talks in Copenhagen in December 2009.
The other promise was to keep the global temperature increase below 2 degrees Celsius to avoid catastrophic impacts of climate change, such as the submergence of islands, which some small island countries fear could happen in the next few years.
Two NGOs suggested ways to help poor countries "without breaking the bank". Oxfam, the UK-based development agency, in a report marking the start of the talks, urged rich countries to view funds for climate change adaptation and mitigation as "an investment ... in a common future", and noted that "In the current economic climate the sums required appear daunting, but they are well within the realms of possibility."
 In the current economic climate the sums required appear daunting, but they are well within the realms of possibility |
Hill and Tom Picken, of Friends of the Earth, an international environmental network, suggested a financial transaction tax that could raise billions of dollars a year.
"Many countries and the G20 [group of industrialized countries] are considering a bank levy, [but] there is a real risk it will become an insurance fund to bail out the financial sector in future instead of providing climate and development with a secure source of funding, and better regulating the financial industry to prevent future collapse," Picken cautioned.
Oxfam proposed raising money from budgets for subsidising fossil fuels, or by auctioning emission allowances in domestic Emissions Trading Schemes (ETS), in which energy-intensive companies can buy and sell permits allowing them to emit carbon dioxide. The European Union has used ETS as its main mechanism for reducing emissions.
Countries could also raise money with bonds backed by Special Drawing Rights held by the International Monetary Fund. "The fight over the longer term for a safer climate will take generations," De Boer commented.
"As investments designed to reduce vulnerability (rather than boost productive capacity), there is a risk that adaptation expenditures may be first to face the axe when national budgets are trimmed," the Oxfam report warned.
"[Money] pledged for fast-start funding ... is expected to be largely overdue ODA [Official Development Assistance], hence not new and additional money at all," said Picken, noting a concern raised by other environmental NGOs.
"I think it is also important to ensure debates about climate finance are clearly framed around the issue of compensation rather than aid. Developed countries are trying to set a precedent that it is okay to count climate finance as ODA; although they share some goals, they must be contributions on top of each other," he said.
Tewolde Egziabher, head of Ethiopia's Environmental Protection Authority and effectively Minister of the Environment, was optimistic. "We have to keep at it because it affects all of us. We will have an agreement - if not in Mexico, then in Johannesburg next year [2011]."
jk/he
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions
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