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Major UN climate finance report released

Date
08 November 2010
Major UN climate finance report released

A major UN report on how to raise $100billion to finance climate action in developing countries was released in New York on Friday, November 5.

The High-level Advisory Group on Climate Change Financing (or ‘AGF’), was set up by UN Secretary General Ban Ki-moon at the start of the year. Members of the group include high profile and influential experts such as President Obama’s chief economic advisor, Larry Summers, and international philanthropist and investor, George Soros. The Prime Ministers of Norway and Ethiopia co-chaired the group. The report has been highly anticipated because of the group’s institutional and political influence. Although not a formal negotiating document, it will likely influence the critical and sensitive discussions on finance that will take place at this year’s UN climate conference in Cancun in December.

Agreeing how to fund the low-carbon development and adaptation to climate change in developing countries has been a perennial problem in the UN talks. Many developing countries have argued that rich countries should provide public financing equivalent to 1.5% of their GDP. Developed countries by contrast have argued that with the right incentives the private sector can provide the majority of the investment that is needed.

While the AGF report has avoided recommendations on how much funding should come from public and private sources, it has noted that the private sector will play a key role in mobilizing the $100 billion per annum by 2020. The report notes that with “wise use” of public funds in combination with private finance, “truly transformational investments” could be generated.

Damian Ryan, Senior Policy Manager at The Climate Group noted “The AGF report will hopefully act as a catalyst for advancing discussion on climate finance in the UNFCCC. While there are clearly still differences between developed and developing countries, it is encouraging to see the importance placed on market mechanisms in the report and the key role of the private sector in leveraging investment. Clearly there is still a lot of detail to fill in, but hopefully the report provides a sound basis for moving forward on the climate finance issue”.

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