Friday, September 3, 2010

Most Agree on Need for Climate Finance, But from Where?

Since Copenhagen, there has been little constructive movement in negotiations regarding emission reductions by developed and developing nations. If anything, some developing economies are “backtracking” by demanding more “new” money while others are suggesting carbon reduction requirements only apply to developed nations, says US lead climate negotiator, John Pershing.

The tone of meetings in Geneva, Switzerland, this week has been of productivity on the climate finance front. To refresh, wealthy nations agreed in Copenhagen to fast-track $10B a year between 2010 and 2012. This appears to be “found” money already, but potentially not “new” since Japan had already committed $15B to the cause prior to Copenhagen. The bigger challenge and focus is on achieving $100B of climate aid annually by 2020. While a mix of private and public funding sources is expected, the method of accumulated such substantial amounts is very much in debate as is the identity of the administering body for the funds. Developing countries are adamantly opposed to the World Bank allocating the monies; rather, they support an entity such as the UNFCC.

Negotiators and pundits have suggested potential funding source such as a carbon tax, airplane fare levies and fees on carbon credit trading. Unfortunately, private investment in carbon reduction projects producing carbon credits declined 54% in 2009 because of uncertainty about the existence and value of carbon reductions post-Kyoto. Therefore, it will be difficult to agree on and identity financing sources, if carbon credit fees are utilized, without the specter of a ratifiable global carbon accord.

Other Carbon News:

· Infamous "skeptical environmentalist” Bjorn Lomborg alters his stance on climate change in a new book, suggesting climate change is “undoubtedly one of the chief concerns facing the world today" and a "challenge humanity must confront." Lomborg also supports substantial funds to secure climate solutions, including geo-engineering, as long as these funds are spent wisely.

· Senator Harry Reid (D) hopes to find some Republican votes for an energy bill after the November elections.

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