1. Dr Charlotte Streck 29 September 2008 Berlin
The International Climate Architecture and Financial Flows for Climate Change
Dr Charlotte Streck
29 September 2008
Berlin

2. Need for Funding

3. Mitigation: Transfer of Funds
ODA
Total OECD/ODA: average of 0.28% of GDP
GEF and other environmental funds
US$250m/year for energy efficiency, renewable energies, and sustainable transportation.
Carbon Markets
CDM: 2007: US$7.5bn (CDM primary market). Potential to grow substantially. Depends on intl demand.
Need for innovative, robust and scalable financial mechanisms

4. Adaptation: Transfer of Funds
1/CP.13: adequate, predictable, new & additional
Current funding based on a number of env trust funds targeting adaptation.
- LCF+SCCF: pledges of about US$265m - Adaptation Fund: US$100m-$500m per year - GEF: US$50m Funding requirements - UNFCCC: $28bn-$67bn by UNDP: $86bn by 2015
Given the cross-cutting nature of adaptation, fund model politically necessary but insufficient: real challenge is to mainstream adaptation into general dev policies.

5. Political Realities
Mitigation needs to happen in industrialized and developing countries. No choice.
Significant financial transfers have to support dev country action. Beyond current scale.
Adaptation finance need to be distinct from mitigation and development finance while the actual financing needs/activities often converge.
Technology transfer key.
Essential:
International instruments
Funding independent from budgetary cycles
Pricing of carbon (fungible markets, intl taxes)

6. Reforming the old… Live up to ODA commitments Reform of GEF
Reduce bureaucracy
Enhance PPPs
Link env objectives closer to SD challenges
Reform existing carbon markets
Reform CDM governance
Expand programmatic approaches
Define sectoral programmes for dev countries

7. …creating new mechanisms
Expand and create new carbon markets
Deepen Annex I commitments
Link carbon markets
Make units fully fungible
Use of proceeds from auctioning allowances
AAUs
EU/US or other emission trading systems
International taxes and levies on
AAU transfers
Fossil fuels (carbon tax / uniform global tax or domestic taxes)
Bunker fuels
Passenger flights (International Air Travel Adaptation Levy)

8. Conclusions & Summary

9. Conclusions Overcome ideological barriers and entrenched positions!
Review carefully which mechanism can supply what to whom.
Analysis of existing mechanism – review roles private and public sectors have to play/are best equipped to play
Move beyond the financing of ssc renewable energy projects. Create bold investment frameworks:
Clean Coal + Gas
REDD
Agriculture
Transport

10. More info Contacts: Charlotte Streck e-mail c.streck@climatefocus.com
Phone
Web-site