Monday, September 14, 2009

EU Proposal For Climate Financing For Developing Countries

Sep 10: The European Commission proposed a blueprint for scaling up international finance to help developing countries combat climate change. According to a release, the initiative aims to maximize the chances of concluding an ambitious global climate change agreement at the December U.N. climate conference in Copenhagen. By 2020 developing countries are likely to face annual costs of around €100 (US$146) billion to mitigate their greenhouse gas emissions and adapt to the impacts of climate change. Much of the finance needed will have to come from domestic sources and an expanded international carbon market, but international public financing of some €22-50 (US32-73) billion a year is also likely to be necessary. The Commission proposes that "industrialized nations and economically more advanced developing countries should provide this public financing in line with their responsibility for emissions and ability to pay." The Commission said this could mean a European Union (EU) contribution of some €2-15 (US$3-22) billion a year by 2020, assuming an ambitious agreement is reached in Copenhagen.

President Barroso said, "With less than 90 days before Copenhagen we need to make serious progress in these negotiations. That is why the Commission is putting the first meaningful proposal on the table on how we might finance the battle against climate change. The sums involved are potentially significant, both ambitious and fair. I am determined that Europe will continue to provide a lead but developed and economically advanced developing countries must also make a contribution."

Environment Commissioner Stavros Dimas said, "The European Union has led the way in committing to ambitious emission reductions and agreeing the measures to achieve them. We are well on track to achieve our Kyoto reduction target. Now we must break the impasse in the Copenhagen negotiations. That is why the Commission is putting forward a balanced blueprint for financing the necessary action by developing countries to limit their emissions growth as well as their adaptation to climate change. Our initiative reflects the strategic priority we attach to a strong Copenhagen agreement."

Negotiations to draw up a global climate change agreement to succeed the Kyoto Protocol are due to be concluded at the Copenhagen climate conference on December 7-18. In addition a major UN Climate Summit, with all countries invited is set for September 22. President Obama is scheduled to speak at the event [
See WIMS 9/11/09]. The EU is pushing for an ambitious and comprehensive deal that will prevent global warming from reaching the dangerous levels – more than 2°C above the pre-industrial temperature - projected by the scientific community.

The Commission said there are three main sources of finance to pay for the roughly €100 billion a year needed by developing countries by 2020 to mitigate their emissions and adapt to climate change -- Domestic public and private finance in developing countries could cover 20-40%; the international carbon market would provide around 40%; and international public finance could contribute to the remainder. The Commission said the more ambitious the carbon market is, the less need there will be for international finance from public sources. They indicated, "International public finance should be provided not only by industrialized countries but also by economically more advanced developing nations. Each country's contribution should be based on an agreed scale reflecting its responsibility for emissions and its ability to pay. Depending on the relative weighting given to these criteria, the EU’s contribution would be between 10 and 30% of the global total."

Access a release from the Commission with links to additional information (
click here). Access a speech by Commissioner Dimas (click here). Access a Q&A document on the proposal (click here). Access various Commission documents on the post-2012 global climate regime including several documents on the latest financing proposal (click here). Access a 21-page Commission staff working document with more details (click here).