UN group sees potential funds for climate projects

UNITED NATIONS - A financing report by UN's High-Level Advisory Group on Climate Change Financing has summarized potential sources for the possibility of raising $100 billion a year to help developing countries to deal with the effects of climate change.

The goal of mobilizing $100 billion a year by 2020 came out of the agreement of the UN climate change conference in Copenhagen, Denmark, in December 2009.

Norwegian Prime Minister Jens Stoltenberg, who is co-chairman of the group, said that without agreement on financing, agreement on other issues will not be achieved. To raise the amount, he said, is "challenging but feasible".

"But the high degree on international coordination is a challenge. How to implement the burden of sharing between developed and developing countries will be challenging," he told China Daily on Nov 5.

The group recognized that key elements of financial flows will be mutually reinforcing. Careful and wise use of public funds in combination with private funds can generate transformational investments.

The report emphasized the importance of placing a carbon price in the range of $20-$25 per ton of CO2 equivalent in 2020 as a key element of reaching the $100 billion a year.

The group was set up by UN Secretary-General Ban Ki-moon in February for 10 months to identify new, innovative and additional sources of financing to meet the $100 billion goal.

"The Advisory Group has given us a path. It is now up to governments to consider the options and to act," Ban said at a press conference on Nov 5.

The 21 members of the group also include Zhu Guangyao, China's vice-finance minister; Chris Huhne, Britain's energy and climate secretary; Bharrat Jagdeo, president of Guyana; and Christine Lagarde, France’s minister of finance.

Stoltenberg said he has had very good cooperation with Zhu in the high-level group.

"China has been investing in renewable technologies – wind power, solar energy, and hydro power," he said.

"And it has invested a lot in more climate-friendly technologies. Now it is working on carbon capture and storage technology that we work together with China."

In early March, China formally agreed to join the Copenhagen accord – the international climate change agreement reached in Copenhagen last December. It pledged to reduce its carbon dioxide emission per unit of GDP by 40-45 percent by 2020 compared to 2005 levels.

The report will be presented and discussed at the UN climate change conference in Cancun, Mexico, later this month.

Stoltenberg said China is a key country in Cancun. "China, just by magnitude, is important."

"China is doing a lot on reducing CO2 emissions and the whole world is impressed by what we have seen," he said.

But the challenge for China and the rest of the world is "to promote economic growth to alleviate poverty", he said.

While China's economy is growing rapidly, it has also become the biggest emitter of greenhouse gases (GHG) in the world, he said.

Stoltenberg, however, praised China's willingness to make compromises during negotiations in Copenhagen. He thinks the "key cornerstone" for nations to reach an agreement in the Cancun conference is to make compromises.

"We will not be able to reach agreement without making compromises."

Since Copenhagen, there have been no high expectations for achieving a legally binding treaty to reduce GHG emissions. And this is not likely to be signed in Cancun.

Major impediments include a trust gap between developing and developed countries over finance and the carbon cuts on industrialized nations but not on developing ones.

"We will not have a comprehensive, legally binding agreement covering all the issues coming out of Cancun. But I hope we will have some kind of package where we can make some progress on some elements," said Stoltenberg, adding that findings in the climate change financing report could be some valuable input to it.