International climate finance George Woods, Climate Action Network Australia Sept …with thanks to Oxfam, WWF and CAN-I

What is climate finance about? In a nutshell: In order for developing countries to reduce greenhouse gas emissions from energy and deforestation, and in order for them to implement strategies to adapt to the impacts of climate change, large amounts of public funding must be made available from developed countries.

Why is it important? Developed countries are responsible for three quarters of historic GHG emissions Crucial mitigation action and life-saving adaptation action won’t happen without it A Copenhagen climate agreement won’t happen without it. Bali Action Plan (par 1 (e)) and UNFCCC (Art 4.3) demand it.

How much is needed? McKinsey report: to reach 450ppm, between US $ billion pa UNFCCC: US $92-97 billion pa. NGO treaty: at least US $160 billion per year for the period public. Oxfam report: at least $150 billion pa public

What sources of $$ are there? Auction or sale 10% of Assigned Amount Units (AAUs) Auctioning permits under an international aviation cap-and-trade emissions system; A levy on international shipping; A 2% levy on credits generated in emissions trading systems in developing countries

Where will it go? The NGO treaty recommends: –56 billion US$ per year for adaptation activities; –plus 7 billion US$ per year for a multilateral insurance mechanism; –42 billion US$ per year for REDD; and –55 billion US$ for mitigation and technology diffusion per year.

Put it in context Total GDP of Annex 1 nations in 2007 amounted to $40 trillion Around $4 trillion has been spent so far on the financial crisis Americans spend $15 billion a year on St. Valentine’s Day and another $3.2 billion on St. Patrick’s Day Developed-country governments spent more than $4 trillion in the last year on bailouts of financial services companies In 2007 developed country governments spent $1.3 trillion on military expenditure.

Important features Must be additional to promised ODA (ie. Over and above the 0.7% GNI committed but not delivered) Must be centrally administered with strong developing country participation. Must be additional to “offset” spending Must be predictable, MRV-able Prioritise most vulnerable, most in need.

What must Aust. do? Australia’s share of the $160 billion proposed by the NGO treaty is about US$3.5 billion per year (0.5% of GDP). Must make and push for commitments well before Copenhagen. Must contribute to a deal on technology transfer Must agree to fund mitigation that IS NOT AN AUSTRALIAN OFFSET