Copenhagen’s One Real Accomplishment: Getting Some Money Flowing

James Kanter, New York Times 20 Dec 09;

COPENHAGEN — The most tangible outcome of the climate agreement announced here Friday turned out to be cash.

The Copenhagen Accord set no goal for conclusion of a binding international treaty, leaving months, and perhaps years, of additional negotiations before it emerges in any internationally enforceable form.

But money in notable quantities should, in principle, start flowing next year.

The accord was “a big step forward” since talks on climate change in Bali, Indonesia, in 2007, when countries committed to control emissions but offered no financial support mechanisms, Ban Ki-moon, the U.N. secretary general, said in an interview Saturday.

“This time we have $100 billion a year,” Mr. Ban said, and “$100 billion a year is significant big money.”

To Kumi Naidoo, the executive director of Greenpeace, the environmental group, the funding pledge was one of the few “plus points” in an otherwise grossly inadequate document.

The accord calls for the establishment of the Copenhagen Green Climate Fund to support immediate action to help curb emissions and to help communities adapt to the effects of global warming.

An initial, fast-start fund worth $10 billion annually would operate from 2010 to 2012.

For long-term finance, developed countries agreed to support a goal of jointly mobilizing $100 billion a year by 2020 to address the needs of developing countries.

Mr. Naidoo said the long-term fund needed to be closer to $140 billion annually by 2020 to be truly effective.

But he said that the decision to raise and disburse hundreds of billions of dollars to help the most vulnerable nations showed that “the principle that poor countries with least responsibility for climate change need resources for adaptation has been recognized.”

Mr. Naidoo said some of the money should go to small island states like Tuvalu that are vulnerable to rising seas and need help in starting to move people to higher ground.

Mr. Naidoo said other candidates for such funding were low-lying coastal communities in countries like Bangladesh where levies are needed to channel seawater to keep it from contaminating sources of fresh water.

Mr. Ban said that he foresaw that the fund would oblige recipients to have reporting and verification systems, and that he envisaged a “comprehensive governance structure” to manage the aid disbursements.

“This is a new step toward the era of clean energy security and toward an era of green growth,” he said.

But Oxfam, the anti-poverty campaign group, immediately warned that the offers were full of “caveats and loopholes,” raising questions about whether the money would ever be disbursed in adequate amounts.

Robert Bailey, a senior spokesman for Oxfam International, said the amount of $100 billion was only half of what was needed.

Mr. Bailey also warned that rich-world governments could end up diverting money from important education and health care projects in poor countries to pay for new projects like flood defenses.

There were also concerns that governments would generate money for the fund on revenue raised from private-sector activities, like taxes on trading in greenhouse gas pollution allowances.

If that turns out to be the case, then forecasting the precise amount of aid flows could prove difficult, as the prices of allowances fluctuate, partly depending on how strongly governments enforce quotas, or caps.

“If the carbon markets are expected to provide any significant portion of that $100 billion, then developed countries will need to commit to cap emissions tightly to drive demand for allowances,” said Tom Brookes, the director at the European Climate Foundation, a research organization based in Brussels.

“But right now there are no caps in the accord,” said Mr. Brookes, referring to the outcome in Copenhagen.

The European Union has pledged $3.6 billion annually to the initial fast-start fund. Japan and the United States have made pledges to that fund, too.

But where large portions of the rest of the money will come from remains uncertain.

Announcing that the United States would contribute to the long-term $100 billion-a-year fund, Secretary of State Hillary Rodham Clinton insisted that those details could come later.

“There are a number of different ideas about how we can pursue the financing,” Mrs. Clinton said.

“The important point,” she said, was “not to talk about how we would fund money that we haven’t yet agreed to fund, but to make the agreement that that is what we’re going to do.”

On Saturday, Yvo de Boer, the head of the U.N. climate office, acknowledged that the accord did not specify how responsibility for the money would be divided up among industrialized countries.

“That means we have a lot of work to do on the road to Mexico,” he said, alluding to the next U.N. climate conference, which will be held nearly a year from now.