Report by the high-level Advisory Group on Climate Change Finance shows that Political will can unlock $100 billion in climate finance

November 5th, 2010 by WWF

New York, USA: A high level analysis of climate finance submitted to the UN today has demonstrated that it is possible to raise at least US$100 billion a year from new sources of public funding to fight climate change by 2020. The conservative analysis by the special High-level Advisory Group on Climate Change Finance (AGF) sets the stage for a finance agreement at 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 governments must match these with political mechanisms that get the finance flowing,” said Keith Allott, Head of Climate Change for WWF-UK. “There’s huge potential in innovative sources such as international aviation, shipping and financial transaction taxes, but these cannot be realised without decisive political action. This report gives the UK Government – particularly David Cameron, George Osborne and Chris Huhne – an opportunity to champion these new sources of public climate funding on the world stage.”

New public financing, agreed in principle under the Copenhagen Accord from the last UN climate summit, will be vital in supporting developing countries to halt the destruction of forests, speed the transition to low carbon development, and to help vulnerable countries adapt to climate change impacts.

“Public funds will be critical if developing countries are to cope with the impacts of severe weather, such as the flooding in Pakistan this year, which is predicted to become more frequent as a result of climate change. Developing countries also need support to conserve forests, which are vital in helping to keep the climate stable” said Allott. “Private sector energy investments will play a major role in transforming energy use in developing countries but public investment is essential to shift private investment to low carbon technologies.”

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. “The UK Government must act fast and come out strongly in support of this option. We expect to see a push for decisive action on this in Cancun”, said Allott.

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 we hope the UK Government will continue to work with others to champion the potential of this promising funding source”, said Allott.

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 and carbon offsets 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.

Visit the WWF website for more information on financing for climate change and AGF.
The AGF was set up by United Nations Secretary-General Ban Ki-moon in February, Co-chaired by Prime Minister Stoltenberg from Norway, and Prime Minister Zenawi from Ethiopia, to explore innovative financing sources and mobilize the financing promised for climate change during the United Nations Climate Change Conference in Copenhagen last December.

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