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Additional tools
Significant financial resources will be needed to help developing countries deal adequately with climate change, both to reduce greenhouse gas emissions and to adapt to the consequences of climate change. At the climate conferences in Copenhagen (2009) and Cancún (2010), the European Union and other developed countries pledged jointly to provide nearly US $30 billion in fast start finance over the years 2010-2012, and for the longer term, to mobilise US $100 billion a year by 2020.
The EU is delivering on its commitments
The EU and its Member States have committed to provide €7.2 billion in fast start finance over 2010-2012, almost one-third of the total pledged by developed countries. In 2010 and 2011 €4.68 billion in fast start finance has been mobilised and this money is being spent on concrete climate actions in developing countries.
Developed countries' longer-term pledge to provide climate finance totalling US $100 billion a year by 2020 is dependent on developing countries taking meaningful and transparent action to mitigate their emissions. The EU will contribute its fair share, in particular to support the least developed and most vulnerable countries. A path needs to be identified for scaling up global climate finance between 2013 and 2020.
Using varied sources of financing
While fast start finance is public sector money, longer term climate finance should be raised from a range of sources. These should include domestic contributions from developing countries (especially the private sector) as well as external support through public grants, loans by private and multilateral financial institutions, and the carbon market. Innovative sources of finance will also be needed, such as revenues from possible market-based instruments to address emissions from international aviation and maritime emissions or from other sectoral market-based mechanisms.
A High-level Advisory Group on Climate Change Financing was established to study the potential sources of revenue, including alternative sources of finance, towards meeting this goal. In November 2010, the Group presented its report to UN secretary-general Ban Ki-moon.
Green Climate Fund soon to go live
Most of the future climate funding will be channelled through the Green Climate Fund that was established in Cancún. A Transitional Committee is preparing the operationalisation and capitalisation of the fund. The EU wants the fund to start operations in 2012.