- Will the US$30 billion Fast Start promise be kept?
- How will the Secretary General’s Advisory Group on Finance address the long term US$100 billion annual figure?
- Where next on design of the Green Fund?
How these questions will be answered matters a lot―as any delegate at last week’s negotiations in Tianjin would tell you. The answers―especially to question 1―will either build or destroy trust, an essential, but so-far elusive, ingredient to a successful outcome.
Look at the World Resources Institute (WRI) web site and a moderately encouraging picture on Fast Start emerges. Adding the pledges of all individual annex 1 countries and about US$27 billion of the US$30 billion global pledge for 2010-2012 seems to be in the bag, according to WRI. But pledges are the stuff of speeches. In the cold light of day they need to be translated into signed commitments for programs and then actually disbursed. That’s why a new semi-official monitoring system has been created. Led by the Dutch and eight other parties, countries are invited to post their commitments and cash flows on a web site. So far only eight Annex 1 countries have uploaded their detailed commitments, adding to only a small fraction of the US$30 billion. So it’s really important that others quickly follow. In Tianjin the Mexican COP presidency hosted a seminar for negotiators on Fast Start. We agreed that definitional issues are messy, that we will need to iterate toward an accurate picture, and that time is not on our side. I presented the World Bank Group’s understanding, and described our work with finance ministers.
Finance and economics ministers set taxes, sign the checks, and shape the economic directions of nations. Their engagement is obviously crucial in the battle against climate change. That’s why the World Bank Group invited Ministers attending our Annual Meetings two days ago to discuss the three questions above. It was at the Bali COP three years ago that Sri Mulyani Indrawati, then Minister of Finance for Indonesia invited ministers of economics and finance to address climate change.
This week’s was the 6th such “Bali Dialogue”. It was co-convened by World Bank Group president Zoellick and the finance minister Ernesto Cordero Arroyo of Mexico. The discussion was rich in ideas, and infused with a recognition that ministers of finance and economics may need to play a bigger role in helping to move forward negotiations, including design of the Green Fund, announced as part of the Copenhagen Accord. My subsequent meetings yesterday with groups of ministers from the Pacific Islands and the Caribbean, among others, confirmed this view.
I’m now on a flight to Addis Ababa for the final meeting of the UN Secretary General’s Advisory Group on Finance (AGF). The meeting will be hosted by Prime Minister Meles of Ethiopia, and co-chaired by PM Stoltenberg of Norway. The job of the AGF is to provide advice on how the US$100 billion might be raised. New public money won’t be easy in the current climate, but it will be needed. The best options are likely to be those where revenue base is linked to carbon emissions. There are lots of such instruments, including revenues from auctioning of emissions allowances, levies on carbon offsets, taxes on fuels for international shipping or air travel, carbon taxes, wires charges, revenues from eliminating energy subsidies and so on.
There’s a lot more to say on all this―including on carbon markets and private flows―but will leave that for another time. What chance for success? Hard to say, but the stakes are high, and there’s a lot to play for.
Read related post from The Brookings Institution: