From: Reuters
Published April 12, 2008 07:04 PM

Financing crucial to next climate change pact: U.N.

By Louise Egan

WASHINGTON (Reuters) - The global fight against climate change after the Kyoto pact expires will fail unless rich countries can come up with creative ways to finance clean development by poorer nations, a U.N. official said on Saturday.

"We are not going to see that major developing country engagement unless significant financial resources and technology flows begin to be mobilized," Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), said in a media briefing.

De Boer and Katherine Sierra, World Bank Vice President for Sustainable Development, said they were studying a long list of financing schemes and proposals and were hopeful of meeting an end-2009 deadline.

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But they were acutely aware of critics who have expressed fears the World Bank will "hijack" billions of dollars of development aid to tackle climate change.

"The overriding concern of developing countries is economic growth and poverty eradication and you cannot expect developing countries to engage on the question of climate change and harm those overriding objectives," De Boer said.

"At the heart of this is intelligent financial engineering," he said.

World Bank President Robert Zoellick said in a speech on Thursday that "addressing climate change won't work if it is simply seen as a rich man's club."

The first formal talks to draw up a replacement to the Kyoto climate change pact, which ends in 2012, took place in Bangkok earlier this month with plans for another seven rounds of negotiations culminating in Copenhagen at the end of 2009.

U.N. climate experts want the new treaty to go beyond Kyoto by getting all countries to agree to curbs on emissions of the greenhouse gases that are fueling global warming.

Under Kyoto, only 37 rich nations are bound to cut emissions by an average of five percent from 1990 levels by 2012.

But developing countries want firm commitments of aid to meet the new targets that will eventually be set out.

The international carbon market is one source of funding but it is not enough, said De Boer who said he was very interested in a German proposal to auction emission rights and use the proceeds for international aid.

"That is a very interesting way of mobilizing new financial resources that are not related to official development assistance," he said.

The World Bank is developing a new strategy on climate change that includes embedding climate change into its existing programs to help countries boost their economies and combat poverty, said Sierra.

She said the bank would meet with donors over the next several days to discuss its proposals, including a $5-10 billion Clean Technology Fund, a $500 million "adaptation" fund and possibly a third fund dealing with forestry.

Zoellick said the needs of developing nations in climate change will be the subject of a Sunday meeting of World Bank officials and ministers from rich and poor countries.

(Reporting by Louise Egan, Editing by Chizu Nomiyama)

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