The report released recently by a U.N. advisory panel on climate change financing shows how challenging it will be for the international community to reach the USD100 billion-a-year climate financing target set under the Copenhagen Accord, two climate change experts observe.
“The AGF [U.N. High-Level Advisory Group on Climate Change Financing] sensibly supports using a mix of revenues to meet the goal rather than a single instrument. It places heavy emphasis on carbon pricing and carbon markets, supports new instruments like transport levies but is guarded on proposals for a global financial transaction tax, and it foreshadows continued reliance on contributions from national budgets,” Jonathan Pickering and Frank Jotzo write in the “Development Policy” blog.
Fotzo is the director of the Center for Climate Economics and Policy at the Australian National University’s Crawford School, while Pickering is a postgraduate student at ANU.
They explain: “It [the AGF report] shows just how difficult the task could be: if carbon pricing were to remain limited, then greater contributions from national budgets will be needed, but these can be fickle and it is difficult to verify that aid is not simply being diverted. And the alternative of financial transaction taxes, favored by many NGOs, clearly faces an uphill battle.”
On alternative financing measures, the two note that while the group’s report introduces several of these measures, it still places precedence on the role of direct contributions from donor governments.
“On-budget contributions are also notoriously fickle as they are largely at the discretion of the government of the day,” they say, on why hopes of having stable funding through donor-funded mechanisms are misplaced.
