Latest Copenhagen Draft Text: Update on Climate Finance

Submitted by Grant Boyle

The Chair of the Working Group on Longterm Cooperative Action released a draft text on the outcome of deliberations so far at Copenhagen.

So where do we stand on the question of developing country climate finance? As discussed in an earlier postingthis is an important question since it has implications for what opportunities Canadian ( and US) emitters will have to buy international credits for compliance under a future Canadian cap and trade scheme, not to mention any obligation that arises for the country as a whole to contribute to international public climate finance.

A few notable points:

Section 36 says: funding will support "enhanced action on mitigation, including REDD-plus, adaptation, technology transfer and capacity building for enhanced implementation of the Convention after 2012. So the general aim is to develop some type of fund with "specialized funding windows" for different needs.

The text leaves open the question of how funds will be raised but suggests a mix of public and market-based approaches with more emphasis on public funding. Section 38 of the text says "Private-sector financing and other innovative sources of funding shall complement the provision of financial resources". This is interesting since under Kyoto the big emphasis has been on carbon markets. Note, the CDM is a child of the Kyoto Protocol and not under discussion under this working group, but it is under discussion at Copenhagen under the Kyoto Protocol working group, which has its own new draft text . Also, for example, much of the discussion to date on financing REDD (mainly avoided tropical deforestation) includes both markets and public funds.

Section 39 says: "[Developed country Parties] [All Parties, except least developing countries,] shall beginning in 2013, provide resources based on a...scale of contributions to be adopted by the Conference of the Parties." Note the significantly different result depending on what bracketed text is agreed upon. The latter approach means developing countries like China, India, and Brazil would make contributions from 2013. It will be interesting to see where this one goes over the next days...