At the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Copenhagen last year, world leaders noted the Copenhagen Accord. The Accord agreed to collectively mobilise $100 billion a year by 2020.
The report outlines some of the feasible measures to generate the scale of finance needed to assist poorer countries. These include:
- Raising public revenue through a range of largely domestic or regional measures, e.g. carbon taxes or emissions trading auctions, driven by support for a credible carbon price. The report suggests this could raise $30 billion per year.
- Raising finance from schemes to tackle emissions in the international aviation and shipping sectors, whilst addressing the incidence on developing countries. The report suggests this could raise $10 billion per year.
- Using the multilateral and bilateral financial institutions to increase investments in low carbon infrastructure. The report suggests this could raise gross flows of $40 billion per year.
- Redirecting fossil fuel subsidies. The report suggests this could raise $10 billion per year.
- Through the role of carbon market finance. The report suggests scaled up markets could raise $30-50 billion per year.
- Through enabling a greater flow of private finance in low carbon investments, presenting opportunities for green growth in developing countries. The report suggests this could be in the region of $100-200 billion per year.
Chris Huhne, Secretary of State for the Department of Energy & Climate Change, said:
'’This report quite clearly sets out a system of climate financing and makes clear that concerted global action, and a carbon price of at least $25 if not more, are required to achieve the necessary transformation in the global economy.
'’We acknowledge this isn’t the end game and the real challenge lies ahead as developed and developing countries work together to ensure concrete proposals are delivered in time for the climate talks in Cancun this year and South Africa next year.’’
The AGF was established by UN Secretary General Ban Ki-moon to identify sound and feasible sources of climate finance.
Norwegian Prime Minister Jens Stoltenberg and Prime Minister Meles Zemawai of Ethiopia are co-chairs of the group. Other members include Chris Huhne, President Jagdeo of Guyana, French Minister of Finance Christine Lagarde, George Soros, Larry Summers and Nick Stern. With the exception of the co-chairs, all other members participate in their personal capacity.