(APW) Cancun Delegates Debate Climate Fund: Who Pays?



Cancun Delegates Debate Climate Fund: Who Pays?
2010-12-08 20:13:41.428 GMT

Cancun, Mexico (AP) -- Should airline passengers pay a
small tax to help out? How about global money dealers? Or
perhaps governments should take what they spend subsidizing
gasoline prices and put it toward the climate cause.
Delegates to the U.N. climate conference hope to agree in
its final days on setting up a new "green fund" to help poorer
countries grapple with global warming. Then the real arguments
will begin -- over where the cash will come from.
U.N. Secretary-General Ban Ki-moon stepped into the middle
of the debate earlier this year by enlisting a high-level group
of international political and financial leaders to offer
advice. Their ideas -- airline and foreign-exchange levies
among them -- were on Wednesday's conference agenda, in a
discussion led by the U.N. chief.
Addressing Tuesday's session, Ban noted the group found "it
is challenging but possible" to raise $100 billion a year by
2020, as promised by richer nations at last year's climate
conference in Copenhagen, Denmark.
This annual two-week meeting of parties to the 193-nation
U.N. climate treaty may also agree on ways to make it easier
for poorer nations to obtain patented green technology, and may
pin down further elements of a much-debated, complex plan to
compensate developing nations for protecting their
climate-friendly forests.
But once more, as at the Copenhagen summit, negotiators
won't produce a sweeping deal to succeed the relatively modest
Kyoto Protocol after 2012, one that would slash greenhouse
gases to curb climate change.
The U.S. has long refused to join Kyoto, which mandates
limited emissions reductions by richer nations, and whose
commitments expire in 2012. The U.S. complained the accord
would hurt its economy and should have mandated actions as well
by such emerging economies as China and India.
Meanwhile, carbon dioxide and other global warming
emissions from industry, vehicles and agriculture continue to
accumulate in the atmosphere.
The green fund would be considered a key success for
Cancun, but many details would remain to be worked out later,
and agreement here was far from assured.
The financing would help developing nations buy advanced
clean-energy technology to reduce their own emissions, and to
adapt to climate change, such as building seawalls against
rising seas, improving health programs to cope with new
diseases spread by warming and upgrading farming practices to
compensate for shifting rain patterns.
Among other unresolved issues, developing countries were
resisting efforts to give the World Bank a role in
administering the eventual fund. They view the World Bank as
too much under the control of richer nations and want the U.N.
itself to run the fund.
The World Bank "has long been imposing policy conditions
and programs on South countries and peoples," complained dozens
of international advocacy groups in an open letter to the
More central were lingering disputes over the size and
sources of the fund.
Behind closed doors, haggling over the text of proposed
Cancun decisions, delegates dueled over what developing nations
considered an inadequate goal -- the $100 billion a year by
They view such finance not as aid but as compensation for
the looming damage from two centuries of northern industrial
emissions, and propose that the richer countries commit 1.5
percent of their annual gross domestic product -- today roughly
$600 billion a year.
Northern delegations resisted such ambitious targets, and
also objected to language indicating most of the fund's money
should come from direct government contributions. They leaned
toward the conclusions of Ban's advisory group as the basis for
the inevitably intense funding debate following a Cancun
The group's final report last month said the greatest
contributions should come from private investment and from
"carbon pricing," either a direct tax broadly on emissions
tonnage from power plants and other industrial sources or a
system of auctioning off emissions allowances that could be
traded among industrial emitters.
Either route would make it economical for enterprises to
minimize emissions, and would produce revenue.
The United States has been a major holdout against such
carbon pricing plans, however, and the impending Republican
takeover of the U.S. House of Representatives all but
guarantees none will be enacted for at least two years.
The U.N. advisers also see possible revenue sources in a
tax or trading system for fuel emissions of international
airliners and merchant ships, or a fee on air tickets, with a
potential for $10 billion a year.
They also suggested a possible levy on foreign-exchange
transactions, producing possibly another $10 billion, and
removal of government subsidies of fossil fuels, with the money
redirected to a climate fund.
Fuel subsidies are believed to run into tens of billions of
dollars annually worldwide. The U.S. federal government gave
$72 billion in subsidies to the fossil fuel industry between
2002 and 2008, says a study by the Environmental Law

-0- Dec/08/2010 20:13 GMT