Wealthy, poor governments must unite on new source of funding to fight climate change - 4 Dec 2010
Governments taking part in the current United Nations Framework Convention on Climate Change (UNFCCC) process have been making slow progress on finding ways to pay for a shift to a green economy that can also deal with the devastating effects of climate change.
In Cancun this week, much of the financing focus has been on the creation of a new global fund to address climate and how it will be managed.
While an agreement on how to make the fund operational is expected in Cancun, finding appropriate financing mechanisms for the fund – one acceptable to both rich and poor nations – is a key component of the talks that likely would help unlock the financing puzzle at the center of the negotiations.
Governments are considering proposals to raise revenue from the international shipping and aviation industry by either charging for emission permits or through levies on fuels,a currently unregulated sector. This approach can play a pivotal role in moving forward parts of the current talks deadlocked around how to pay for actions to fight climate change, WWF said.
“Negotiators must see this as a fair, doable opportunity for ready-made cash revenue that can generate guaranteed sums of public finance that in turn can be directed to climate adaptation and mitigation in developing countries,” said Gordon Shepherd, leader of WWF’s Global Climate Initiative. “Success in pursuing this approach would show that the UNFCCC process can cut through the gridlock of polarized positions and mistrust on how to fund global actions to fight climate change.”
“These are lean times, and this is an untapped revenue source – governments can turn political will to address a growing emission problem into cash by embracing this approach.”
An independent group of financial experts and senior officials, known as the UN Secretary General’s High Level Advisory Group (AGF), last month confirmed it was feasible to mobilize at least USD 100 billion to fund climate actions in developing countries.
The advisory group drew on proposals already being discussed by the International Maritime Organization and the UNFCCC aimed at avoiding placing an additional burden on developing countries while at the same time generating revenue from the global shipping and aviation sectors. The solution involves a rebate to developing countries reflecting their share of the goods shipped, to avoid a burden on them. The revenue attributed to developed countries will be channelled through a fund under the UNFCCC to support climate actions.
Already this week at the climate negotiations, some developing countries have criticized proposals to raise public money from the aviation and shipping industries, saying the so-called ‘Bunker’ financing plan – named after the shorthand for fuel used in the international transport industry - would restrict their economic growth.
In a paper released to delegates at the climate talks today, WWF said “one of the most promising innovative sources of public financing for adaptation and mitigation actions in developing countries is from measures to address emissions from international aviation and shipping.”
International aviation and shipping are large and fast-growing sources of emissions with no overall regulatory framework to control them, according to Financing from International Aviation and Shipping: Turning an Emissions Problem into a Revenue Opportunity.
“Policies to control them could pay a double dividend – reducing emissions but also unlocking major flows of climate finance.”