17 September 2014: For climate protection, money is more important than targets.

Next week over a hundred world leaders, including Barack Obama and David Cameron, will meet at the UN headquarters in New York to discuss climate change. UN Secretary-General Ban Ki-moon has invited them to try to inject momentum into the UN Framework Convention on Climate Change (UNFCCC) negotiations. The UN negotiations focus on targets – how much and how fast countries should promise to reduce greenhouse gas emissions.

In my new CER paper International climate negotiations should focus on money not targets, I argue that without finance, targets can become fig-leaves to conceal lack of action. The 2009 Climate Summit in Copenhagen agreed a Green Climate Fund. This was supposed to receive $30 billion a year from developed countries, to be spent in developing countries dealing with the effects of a changing climate (“adaptation”) and reducing greenhouse gas emissions (“mitigation”). Five years later, the Fund is still not operational.

The best forum in which to make progress on climate finance is the G20, not the UNFCCC, which has 192 parties. G20 countries are responsible for over 80 per cent of global GDP and greenhouse gas emissions. In 2009 the G20 agreed to phase out inefficient fossil fuel subsidies. The International Monetary Fund (IMF) calculates that total subsidy given globally to fossil fuels in 2011 was $2.38 trillion. Ending this subsidy would reduce global carbon emissions by 14-15 per cent, and increase government revenues by 8 per cent. It would also be good economic and social policy because, as the IMF says in the press release launching this study:

  • “Subsidies can crowd out growth-enhancing public spending.”
  • “Subsidies diminish the competitiveness of the private sector over the longer term.”
  • “Energy subsidies divert public resources away from spending that is more pro-poor.” (See https://www.imf.org/external/np/sec/pr/2013/pr1393.htm)

I propose that the G20 nations should implement their 2009 agreement to phase out fossil fuel subsidies, and give much of the money instead to the Green Climate Fund.

The world’s glaciers are retreating more rapidly than international climate negotiations are advancing. Europe and North America have grown rich by burning fossil fuels. If we want the rest of the world to develop more cleanly, we have to share the cost.

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