International Climate Finance;Addressing needs, meeting targets

Gemma O’ReillyClimate Change Research Unit

June 30th, 2010

Outline:

Addressing Needs Estimates of need Copenhagen Accord targets Challenges Instruments and mechanisms Opportunities

Climate Finance is about Addressing Needs

Ultimate goal is to avoid dangerous human induced climate change. The Copenhagen Accord interprets this as the 2 degree upper limit

Developing Country Adaptation

Developing Country Mitigation

Developed Country Mitigation

People already on the brink of survival can ill afford the additional threat from climate change

We all have common but differentiated responsibility for mitigation…

Estimates of Needs Vary

UNFCCC Mitigation: $200-210bn in 2030 to reduce ems by 25% on 2000

levels. Mitigation (0.3-0.5%) of global GDP while global investment is

(1.1 - 1.7%) nAI: 46% or $92 – 97bn achieving 68% of the global mitigation. Adaptation: 10s -100s of billions. non-Annex I parties $28-67bn

by 2030. But UNDP estimated $86bn by 2015.

European Commission €100bn annually by 2020 required for CC action in developing

countries Includes DCs public spending, private finance and public

finance from developed countries

The Copenhagen Accord

Scaled up, new and additional, predictable and adequate funding as well as improved access

Developed countries: $30bn new and additional over 2010-2012 balanced between mitigation and adaptation

$100bn a year by 2020 goal, jointly mobilised, including public, private, bilateral and multilateral

A Copenhagen Green Climate Fund

A High Level Panel on sources of finance

Mobilising Finance Presents Challenges..

Irish GDP fell 7.1% from 2008 to 2009*

Unemployment May 2008, 5.5% : May 2010, 13.7%

Government budget deficits and high debt levels

International Banking crisis etc.

AND... Difficulties in delivering money effectively to developing

countries Issues over control of money; Who decides what climate

finance should be spent on? Who monitors results?*Based on quarterly figures, CSO (2010)

Different types of financial instruments will be required

UN Secretary General Advisory Group on Finance “private sector investments .. constitute the largest share of

investments and financial flows (86%) Official Development Assistance (ODA) funds are currently

less than 1% of investment globally, but a larger share...in LDCs (6%)

Price on Capacity??

? Finance

Price on impacts??

? Finance

Price on Carbon √

Private Finance

Opportunities exist in this transformation…

New substantial markets for Climate solutions!

New technologies needed at home and abroad

New management and communication solutions

New education requirements

Other benefits to be achieved..

Technology Leap-frog!

+ Economic stimulus of new investment

Other benefits…?