Cost Of Climate Change, Offers To Pay

PlanetARk 3 Dec 09;

Sharing the cost of fighting climate change is one of the main sticking points to agree a global warming deal in Copenhagen this month.

The cost is totaled as the combined bill from cutting greenhouse gas emissions and preparing for unavoidable changes including droughts, floods and rising seas, called mitigation and adaptation.

Following are cost estimates, offers to pay, and proposed schemes.

COST ESTIMATES

1. Economic cost

* up to 5.5 percent lower global GDP in 2050 - IPCC

* to limit warming to 2-2.8 degrees Celsius

* 1-5 percent of GDP - review by Grantham Research Institute

2. Extra investment

- MITIGATION, GLOBAL

* $430 bln/ year by 2020 - IEA

* falls to $95 bln/ year after efficiency savings -IEA

* 530-810 bln euros/ year 2020-2030 - McKinsey

* $197 bln in developing countries by 2020 - IEA

- ADAPTATION IN DEVELOPING COUNTRIES

* $75-100 billion/ year from 2010-2050 - World Bank

* $7 billion/ year in agriculture alone - IFPRI

3. Funds needed by developing countries

* 100 billion euros ($150.6 billion)/ year by 2020 - EU

* $140 billion/ year by 2020 - Greenpeace

* $50 bln/ year by 2015 - Nick Stern

MONEY ON TABLE

1. Carbon markets

* Kyoto's clean development mechanism spurs trade in offsets

* CDM deployed $6.5 billion to developing countries in 2008

2. Global "green" stimulus, under economic recovery plans

* $177 billion for clean energy - New Energy Finance

* $513 billion for energy, grids, rail, water, waste - HSBC

3. World Bank climate investment funds

* pledges of over $6.1 billion from rich countries

4. Global adaptation fund

* raised from a 2 percent levy on the global carbon market

* valued at 89 million euros ($134.1 million) so far

5. Norwegian funds to slow deforestation

* up to 3 billion crowns ($543 million)/ year

* committed 700 million crowns to an Amazon fund

6. U.S. budget for "international programmes"

* $1.2 billion in 2010, including $275 mln for rainforests

7. Germany carbon allowance sales

* 120 million euros/ year for developing nations

PROPOSED SCHEMES

1. Fast-track funds under U.N. climate process

* Up to $10 bln/ year from 2010-2012 for developing nations

2. Mexican proposal for long-term funds, under U.N. process

* fund raised from all nations

* based on greenhouse gas emissions and ability to pay

* Could initially raise $10 billion per year

3. Norwegian proposal for long-term funds, U.N. process

* apply carbon quotas to rich nations, in tonnes of CO2

* force them to pay for 2 percent of those allowances

* Could raise $15-25 billion per year

4. Carbon markets

* up to 38 bln euros/ year for developing nations by 2020-EU

5. Climate bonds

* investors buy climate bonds

* rich nations guarantee yields and principle on maturity

* could front-load climate cash to spend now