An important thread of the climate negotiations underway in Cancun, Mexico is finance: how to mobilize and then distribute financial support for developing countries’ efforts to reduce greenhouse gas emissions and help people adapt to the climate changes we can’t avoid.
So, how much funding will be needed?
At the Copenhagen talks a year ago, countries pledged $30 billion on a “fast track” from 2010 to 2012, and agreed to a total of $100 billion in public and private financing for climate-related investment by 2020.
It sounds like a tall order, but it is essential to putting developing nations on a path to low-carbon economic growth, and increase their abilities to fight off impacts of climate change. Some funding has already begun to flow. In 2010, the European Union spent $2.4 billion on fast-start financing for the forest-focused REDD program, emissions reductions, and climate-adaptation measures.
And a report from the UN Secretary-General’s High-level Advisory Group on Climate Change Financing indicates that it is feasible to reach the $100 billion goal with a smart combination of policy and funding instruments, and incentives for private investment, including through strategic use of carbon markets.
The Nature Conservancy is calling upon countries to uphold their financial pledges made in Copenhagen, where all major emitters also pledged to make significant emissions cuts for the first time.
The United States has begun to fulfill its commitments to provide fast-start finance for protecting forests in developing countries (REDD+), adaptation, and clean energy. The U.S. should continue to move forward to implement these commitments.
A potential successful outcome from the Cancun talks would be establishment of an international climate fund as the cornerstone for a robust and flexible finance system that will allow for both public and private funding sources. The Conservancy supports progress on finance as part of a balanced package that addresses all issues concurrently, including: mitigation, MRV (Measurement, Reporting & Verification), REDD+, adaptation, and technology.
Determining the path forward for climate finance would be a significant accomplishment for the Cancun negotiators, as they would be creating a blueprint for the financial architecture – or formal structure – for international climate decision-making to move ahead. Finance experts say a key step in the process involves designing how a climate fund would operate.
In the meantime, generating adequate and predictable financing is urgently needed for tackling climate change challenges on the ground – to reduce emissions and deal with impacts. The sharing of successful financial models can build confidence and trust between parties to move forward here in Cancun and advance the process towards a legally binding agreement in the near future. For example, existing tools, such as national trust funds, can channel new financing to guarantee an immediate, effective, and ongoing distribution of funds.
Host country Mexico has been leading the way for several years in establishing financing models, such as economic incentives for owners or managers of natural areas to protect their natural resources that others benefit from. The early successes of this kind of financing in Mexico shows that once the money and incentives become available, people around the world can greatly improve their abilities to adapt to climate change.
Ariane Steinsmeier is senior policy advisor for European climate finance at The Nature Conservancy Europe
Trackback from your site.