WIREDGOV

Ministers from over 40 countries gathered in Geneva last week (2 and 3^rd September 2010) for informal talks to build trust and consensus on key elements in the climate finance debate, ahead of December’s UN summit in Cancún.

The Swiss hosts were eager to stress from the outset that the meeting’s purpose was to facilitate dialogue on finance outside the deadlocked UN negotiations, rather than come up with any concrete decisions. Environment Minister, Moris Leuenberger proclaimed the meeting "a success because new ideas were discussed here and the ministers present worked together in an atmosphere of mutual trust."

Among the topics discussed, a certain amount of common ground was unveiled on several noteworthy issues, including: setting up a climate fund, proposed last year at Copenhagen, to manage long-term financial flows; and the importance of engaging the private sector in emissions reduction initiatives in the developing world. With hopes for forging a comprehensive global climate treaty this year all but vanished, clear policy signals from national governments were deemed absolutely critical to incentivising large-scale private sector investment in clean energy projects and other low-carbon solutions.

Yet, disagreement remained over the proportion of public-versus-private contributions to long term climate funding and the role of carbon markets, with many participants doubting the ability of carbon markets to provide adequate funds or deliver mitigation objectives – particular in energy efficiency and land transport. Others warned that the rapid expansion of carbon trading risked creating ‘a new financial bubble'.

The Swiss Government launched a new website designed to track pledges made by developed countries as part of their collective commitment under the Copenhagen Accord to provide US $30 billion in ‘fast start’ funding until 2013. The initiative is intended to increase transparency around finance flows, amid accusations that Japan, the US and others have rebranded aid pledged prior to COP15 as new money.

The Global Climate Network will soon be publishing a study identifying the medium-term clean energy financing needs of major developing countries, including India, China and South Africa, and how the funding gap might be filled. In particular, it will put forward recommendations for using limited amounts of public funding to reduce investment risks and help leverage private sector capital for clean energy projects.

For further information on this study, please contact d.nash@ippr.org