Finance Disagreements Loom Over Copenhagen Summit

Maldives coastal erosionCopenhagen, Denmark - As international delegates arrive at the United Nations climate summit today, developing-country negotiators are waiting for the industrialized world to clarify how much money will be on the table. 

European Union leaders stated in October that the world's wealthy countries should provide €100 billion ($150 billion) each year by 2020 to help poorer countries transition to a low-carbon development path and adapt to the damages of climate change.

European, U.S., and Japanese negotiators are divided, however, on whether the money will come from new or existing aid budgets.

"The question is: should double-counting be allowed or not," said Saleemul Huq, a senior fellow with the International Institute for Environment and Development.

An EU negotiating text obtained by The Guardian this week reveals that the European Union plans to oppose any requirements that climate funds be additional to or separate from current development aid.

Developing-country leaders and United Nations officials are insisting that climate funds be additional to existing aid deals. If not, they say, health, environment, and security programs that are already under-financed may be compromised.

"There are real concerns that we might miss Millennium Development Goals because of the climate change agenda," said Roberto Bertollini, environment and health policy coordinator with the World Health Organization.

The European countries that support a separate climate fund, such as Denmark, the Netherlands, Norway, and Sweden, regularly meet the international target of 0.7 percent of gross domestic product committed to official development assistance.

Countries that struggle to meet their development-aid targets would prefer that aid programs be repackaged into new climate funds. France and Germany, for instance, committed less than 0.4 percent of their GDP to development aid in 2007, and both want existing aid to be allocated to climate.

Last month, United Kingdom Prime Minister Gordon Brown proposed a "Copenhagen launch fund" that would run from 2010-2012 and accumulate $22 billion by 2013. The funding would be split evenly between mitigation and adaptation activities. He did not state whether the funding would be additional to existing aid.

"The British contribution to the $10 billion figure would be roughly about £800 million [$1.3 billion] - for which we've already budgeted," Brown said at the Commonwealth heads of government meeting in Trinidad and Tobago.

The United States has included $1.2 billion of international climate aid in its 2010 budget. Legislation passed by the U.S. House of Representatives and currently being debated in the Senate would raise funds for international climate aid from the sale of emission permits as part of a cap-and-trade system.

John Kerry, chairman of the Senate Foreign Relations Committee, requested that President Barack Obama's administration increase funding for mitigation and adaptation aid in the 2011 budget.

"I urge you to include $3 billion in international climate finance in the fiscal year 2011 budget to support our short-term climate finance obligations and create the necessary glide path to enable our federal agencies to fully and effectively utilize the increased resources Congress will make available to them through climate change legislation," Kerry wrote on Tuesday in a letter to Secretary of State Hilary Clinton. 

Negotiators offered various proposals to raise new funds at the U.N. summit in Poznań, Poland last year. A Norwegian plan to generate revenue from auctioning national cap-and-trade permits received general support from industrialized nations. The negotiating bloc of least-developed countries suggested that airlines place a flat tax of $10-$15 on all international tickets. Mexico proposed a "World Climate Change Fund" that would collect money based on each country's unique situation of greenhouse gas emissions and economic growth.

Public and private funds have provided some $8 billion annually in recent years for developing countries to form low-carbon economies and $1 billion annually for adaptation programs. Estimates of how much money developing countries will need range from $140 billion to $675 billion each year for mitigation and $30 billion to $90 billion each year for adaptation, according to the World Bank.

Ben Block is a staff writer with the Worldwatch Institute. He can be reached at bblock@worldwatch.org.

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