Innovative financing the service climate (Policy Brief 252 - November 2011)
By 2020, nearly 100 billion dollars a year that developed countries have pledged to finance action against climate change in developing countries (DCs).
Given the current economic situation, they will nevertheless find it difficult to collect the money in their budgets: new sources of funding will be needed.
- Innovative financing in the service of climate
If revenue from the auction of emission allowances within the EU will be primarily used for national or European, a party may nevertheless be redirected to developing countries. Impose on international aviation and maritime sectors to pay the price of carbon will take several years but will provide revenue of tens of billions.
The tax on financial transactions, including foreign exchange transactions, could generate significant revenue. Beyond these resources, a large part of the solution will come from the complementarity between private and public funds. The Cancun agreement opens a new path by providing that promised 100 billion may come in part from the private sector - yet he will provide the latter with the right incentives. Public funds should promote private investment and seek to find the maximum leverage. Properly used, new sources of funding to the tune of 30 to 40 billion by 2020 would be enough then to keep the promise made at Cancún to developing countries.
Contents:
- In search of public funding
- Public funds to guide private investment to action against climate change
Authors: Johanne Buba and Anne Fichen, Sustainable Development Department , Mahdi Ben-Jelloul and Clément Schaff, Economy-Finance Department