Climate - what money is used?

The developing countries' promise of $ 100 billion a year from 2020 for climate action will not be possible to achieve with just government subsidies. An important debate in the future is about what incentives and conditions are reasonable for mobilizing the private sector. That is the opinion of Jan Cedergren, board member of the Green Climate Fund.

At the climate summit in Copenhagen in 2009, the developed countries promised $ 100 billion per year from 2020 for climate measures in the developing countries. This was confirmed at recent climate meetings in Mexico and South Africa. The money would come "from a variety of sources" and be largely channeled through a new fund, the Green Climate Fund. The sources could be donations, loans and grants from the private sector.

The grants would be new and additional (new and additional). Developing countries were afraid that the money would otherwise be taken from poverty reduction (ODA). There are two problems with this. First, there is no agreed definition of what is meant by "new and additional". Secondly, it is obvious that climate measures in developing countries should often be integrated into the countries' development planning and thus should be seen as part of the country's development measures. The EU's view that funding can meet several objectives is therefore not unreasonable. In addition, the deteriorating economic situation in the developed world means that it is not realistic at present to expect major government grants in addition to development aid budgets.

The goal of $ 100 billion per year from 2020 will not be possible to achieve with government subsidies alone. The private sector must be mobilized and an important debate in the future is how this should be done. What instruments can be used, what conditions should be set, what incentives are reasonable? Many developing countries are skeptical of private sector participation, based on their own past experience.

Preparations to establish the Green Fund have now been ongoing for almost three years and it now looks like the fund can become "operational", ie be able to receive money and transfer money, after the summer of 2014. Several countries, including Sweden, have promised grants when then happens.

If the 2020 goal is to be achieved, the fund must be gradually built up over the remaining years.

The Green Climate Fund is a completely unique creation and the credibility of the developed countries is at stake in ensuring that the fund receives the resources promised.

Jan Cedergren

Board member of the Green Climate Fund

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