Copenhagen Conundrum 5: Funding The Fight In Developing Countries

Posted on 16. Dec, 2009 by Ross in Climate Change, Europe, Government Policy, United Kingdom

The developing world holds developed countries responsible for the impending effects of climate change, given that industrial revolutions in the Western world and the subsequent economic activity is responsible for most of the world’s atmospheric carbon dioxide. The historic emissions from the USA alone amount to 30% of the world’s atmospheric carbon.

This had led to developing countries to demand that not only should the developed nations reduce their emissions drastically in line with what science expects is necessary to avoid the worst effects of climate change, but that the developed world should also help fund the developing countries’ own fight against climate change: both to help reduce the carbon intensity of economic growth and to adapt to the expect changes in the world’s climate.

The principles architects behind the push for a developing nations’ climate fund are in fact leaders from the developed world. UK Prime Minister Gordon Brown and French President Nicolas Sarkozy have long been campaigning for a massive $100 billion climate fund to help reduce carbon emissions and adapt to climate change in developing countries, knowing that the developing world would need to be involved in any long-term climate solution but that aid and incentives would have to be on the negotiating table for any commitment to be realised.

Unfortunately, contributions to the fund have proven to be slow in being realised, a small in magnitude by comparison to the intended target. In the first week of Copenhagen, EU officials pledged to contribute $3.5 billion annually - $2 billion of which from the UK. The USA has also said that it will contribute, although actual levels of commitment remain vague since it would need Senate approval.

The levels of funding was slammed by the G77 bloc, who saw the level of funds being offered as being ridiculously small compared to what they felt was both needed by developing countries and owed by developed countries for their historical emissions. There was also considerable concern that the money involved was being stripped from existing international development budgets and repackaged as climate funds instead.

However, two latest proposals seem to be gaining ground on both sides of the development fence. Norway and Mexico have tabled a plan which draws on a concoction of private and government funds which could funnel as much as $40bn a year to developing countries, whilst the British and French governments are suggesting a Tobin tax on financial market transactions - primarily on currency transactions - which could net around $30bn annually.

Standing in the way of such efforts as usual is the United States: not necessarily because its leader doesn’t agree, but that once again the real power lies with the Congress and Senate. Any measures outlined in Copenhagen which will impact on the US economy will have a near-impossible time being passed on Capitol Hill, and a high-profile global banking tax will be highly unpopular amongst American capitalists, bankers, corporations and the rich.

Initial US objections to the fund based on not wanting to give money to China have already been rebuked by the Chinese themselves, who have themselves bankrolled American debts over the past decade and simply said ‘we don’t want or need your money’ as their riposte.

There will be no deal in Copenhagen with significant funds being made available to developing countries. How those funds are generated, however, looks set to rumble on long into 2010.

Image of a beggar in Paris by Alex E. Proimos @ Flickr