A Global Financial Architecture for Climate ChangeThe impact of climate change will be disastrous for both developed and developing
countries, as well as the global ecology and economy. But the most disruptive impacts
can still be mitigated if urgent action is taken to ensure a peak in greenhouse gas emissions
and then a decline in global emissions before 2015. Although emissions are rising
in some developing countries, industrialised countries have a higher historical responsibility
for accumulated emissions. In addition, the fossil fuel resource-intense economic growth
that has been the basis of these emissions provides them with a higher capacity to act.
A Global Financial Architecture for Climate Change (Global Financial Architecture)
is needed to shift public and private finance and investment flows towards decoupling
economic growth from increasing greenhouse gas emissions to a low carbon and
climate resilient future (including both adaptation and compensation). The UNFCCC
secretariat’s Investment and Financial Flows report (2007) estimates that $133 billion
a year in additional investment in developing countries will be needed in 2030 to
increase climate resilience and contribute to their low carbon economic development.
It should be noted that this estimate is based upon an unacceptably high stabilisation level of
500 ppm CO2-eq 1 (and not taking into account the need for increased energy access
in developing countries). To have a 50 % probability of staying within a 2°C temperature
increase, CO2 concentrations should at least stay below 450 ppm CO2-eq 2. More
ambitious action is therefore required that will be reflected in a higher overall cost. Failure to
do this would lead to damage costing much more – at least 5% and perhaps more than
20 % of global GDP.