EU reveals financing proposal for Copenhagen summit

www.environmental-finance.com
10 September

The EU is willing to pay an annual contribution of up to €15 billion ($22 billion) by 2020 to help developing countries fight climate change, according to a European Commission proposal. The paper published today states that by 2020, developing countries will need around €100 billion a year for climate change adaptation and mitigation measures. Much of the funding will come from domestic sources and an expanded international carbon market, said the Commission.

It estimated that an international carbon market could raise up to €38 billion a year for developing countries by 2020 if developed countries accept a 30% emission reduction target and advanced developing countries introduce a sectoral crediting mechanism, rather than the Clean Development Mechanism, for rewarding projects that reduce emissions.

In addition, international public financing of €22-50 billion a year will be needed, said the Commission. It proposed that industrialised nations and "economically more advanced developing countries" should contribute in line with their responsibility for emissions and ability to pay. This would mean an EU contribution of €2-15 billion a year by 2020 – or up to 30% of the global total.

The paper also called for €5-7 billion in public money a year between 2010 and 2012 to help developing countries tackle urgent climate change adaptation and for creating the necessary institutions and infrastructure. The EU would contribute €500 million-2.1 billion a year. The proposal forms part of the bloc's negotiating position for international talks on a post-2012 climate deal, intended to be agreed in Copenhagen this December. A lack of progress on financial support for developing countries has so far stalled the talks.

Commission president Jose Manuel Barroso said: "The sums involved are potentially significant, both ambitious and fair. I am determined that Europe will continue to provide a lead, but developed and economically advanced developing countries must also make a contribution."

A spokeswoman for the UK Department for Energy and Climate Change (DECC) said it "welcomed the Commission's constructive contribution on how the world puts in place the finance that's needed to tackle climate change… the UK stands firm to the commitment to contribute our fair share".

Environmentalists were less enthusiastic about the proposals. Greenpeace said the proposed figures were "desperately inadequate". "With this money on the table we will hopefully break the deadlock in negotiations for a new climate deal in Copenhagen," said Joris den Blanken, Greenpeace EU climate and energy policy director. But he accused the EU of "trying to get away with leaving a tip, rather than paying its share of the bill to protect the planet's climate".

Greenpeace called on industrialised countries to pledge at least €110 billion annually and for the EU to commit €35 billion. The proposal will now be examined by the European Parliament and EU member states.