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Finance central to UN climate talks, as UK calls for more pledges

Climate minister says other developed nations must match UK pledge to deliver $6 billion by 2015

(Picc: DECC)

(Picc: DECC)

By Ed King in Warsaw

UK climate and energy minister Greg Barker says more countries need to “step up to the plate” and make firm financial commitments at UN climate negotiations in Poland.

“We need other countries to match the ambition of the UK – not least if it’s going to be sustainable for the UK. Leadership is about moving the dial – it’s not about being singular,” he told reporters.

Highlighting the “genuine commercial opportunities” presented by low carbon energy investments, Barker added that the UK’s decision to commit $6 billion to its International Climate Fund from 2011-2016 would give the country a “clear and distinct competitive advantage”.

“Sooner or later the penny is going to drop with our competitors”, he added.

The comments came on the sidelines on what is proving to be an increasingly fractious and tough set of negotiations, framed by a perceived lack of financial support from rich nations.

It now appears increasingly unlikely that there will be any new movement on filling a UN-backed Green Climate Fund, which is set to become operational in 2014.

The Fund is part of wider efforts to generate $100 billion a year of climate-friendly investments for developing nations, but it is unclear where that money will come from.

A negotiating text from the Africa Group of countries called for $70bn a year to be provided by 2016, while the 48-strong Least Developed Countries suggested a midterm target of $60bn.

Efforts to push this issue at a meeting of the Commonwealth in Sri Lanka ended in a communique on a Green Capital Fund, calling on members to “explore the potential for simplified access arrangements for SIDS [Small Island Developing States] and LDCs”.

Lack of support

A report published on Monday by the London-based Overseas Development Institute (ODI) said climate finance pledged through multilateral climate funds fell by 71% in the last 12 months.

Ministers are scheduled to meet on Wednesday to discuss how funding levels can be boosted. Rich nations delivered around $30 billion between 2010-2012, but have failed to agree on how this could be sustained in the long term.

Finland’s Environment Minister Ville Niinistö told RTCC the country planned to increase its financial contributions by “approximately a third”, while Japan says it will increase its budget to $16bn, $13bn from public sources of finance.

The US, UK, Norway and Germany are also expected to make a new pledge on Wednesday relating to funding efforts to save forests.

The challenge posed by this funding gap was highlighted by leading climate change economist Lord Nicholas Stern, who told RTCC current estimates of what is needed to transform global energy systems are well beyond the $100 billion a year goal.

“What we’re talking about is the world investing something close to a trillion dollars a year around climate oriented investments,” he said.

“Estimates vary, but something approaching a trillion. More than half of that would have to be in emerging markets and economies.”

“The big majority will be private finance,” Stern added, but stressed this required a massive reduction in what he calls “government induced policy risk”.

Separately, a World Bank report published on Monday says the cost of natural disasters rose from $50 billion a year in the 1980s to $200 billion in the past decade.

Data from the reinsurance company, Munich Re, reveals total reported losses from disasters estimated at $3.8 trillion from 1980 to 2012, with 74% due to extreme-weather.

“Typhoon Haiyan, the most powerful typhoon ever to hit the Philippines, has brought into sharp focus how climate change is intensifying the severity of extreme weather events, which hurts the poor the most,” said Jim Yong Kim, World Bank Group President in a statement.

“While the immediate relief effort must be front and centre of our attention today, such tragic events show that the world can no longer afford to put off action to slow greenhouse emissions, and help countries prepare for a world of greater climate and disaster risks.”

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