(BN) World Should Triple Funding for Climate, Mexican


World Should Triple Funding for Climate, Mexican Official Says
2010-12-03 18:38:23.800 GMT

By Mathew Carr
Dec. 3 (Bloomberg) -- The world should triple the amount of
planned spending on climate programs this decade to bring
emerging countries into a global deal that sets proper prices
for energy and emissions, a Mexican finance official said.
Richer countries could provide $300 billion a year by 2020
for a new financing system, instead of the committed $100
billion, to accelerate investments that bypass fossils fuels.
Those include projects based on wind, biofuels, solar and
geothermal energy and increase efficiency, said Elias Freig,
coordinator for Mexico's Special CO2 Taskforce.
"Sound, sustainable, new, equitable and predictable
financial support for climate action in developing countries is
a top-tier priority" for United Nations talks this month, he
said today in an interview. Funding is "critical to rebuilding
trust at the UN climate negotiating table, and for solving the
climate change challenge and dilemma once and for all."
A United Nations panel recommending ways to finance aid for
fighting global warming said the goal to provide $100 billion
was "challenging but feasible," according to its Nov. 5
report. The panel, which includes billionaire George Soros, Sir
Nicholas Stern and Larry Summers, director of President Barack
Obama's National Economic Council, estimated that just selling
carbon emissions permits could generate $38 billion in 2020,
assuming a carbon price of $25 a ton.
A "high carbon price" of $50 a ton would produce $70
billion. Both scenarios assume 10 percent of allowances sold are
set aside for poorer nations. Imposing carbon taxes where
emissions trading isn't possible would help ensure consumers
make decisions that help protect the climate, Freig said. The
taxes could be neutral in poorer nations, with the revenue spent
to help pay for social programs, he said.
"The relative prices of energy sources are screwed up,"
said Theodore Panayotou, an adviser to the Mexican ministry and
an instructor in environmental economics at Harvard University
from 1986 through 2009. Fossil-fuel subsidies need to be
removed, he said yesterday in an interview. "Stop subsidizing
the bad."

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