Cancun, Mexico 6 Dec. 2010 - There is an urgent need to scale up the levels of both public and private financing to halt the devastating effects of climate change and to enable the required shifts to low-carbon economies in developing countries, international organisations warned today.
Leaders from the finance industry, the UNEP Finance Initiative and WWF joined forces today to call for scaled up public finance and building up the financial mechanism under the UNFCCC to leverage much greater amounts of private finance to meet climate change mitigation goals.
The united call comes as negotiators from almost 200 nations are meeting in Cancun as part of the UN's Framework Convention on Climate Change.
Last month 259 global investors representing USD15 trillion in investments issued a statement on climate change urging international action.
At a joint event today in Cancun the organisations will present a shared vision for financing action on climate change. This vision includes the following:
- In developing countries both private and public financing needs to be scaled up: in a climate change mitigation context, international public financing is particularly needed to leverage private finance through de-risking instruments such as guarantees, first loss equity vehicles and hedging instruments; secondly, public finance is needed to build developing country capacity and create the policy frameworks needed to accelerate private sector shifts to the low carbon economy.
- Scaled up public finance is essential, but on its own not sufficient, to enable shifts to low-carbon economies in developing countries. As well, action will be needed to accelerate readiness, capacity and create the policy and regulatory conditions in developing countries.
- There is considerable experience with public finance mechanisms to mobilize and channel private finance into the green economy and low carbon development.
- In the tight current budgetary situation of many countries not all of the public finance will be able to be sourced from domestic budgets. Innovative sources of public finance are needed to reach the scale of resources required.
Yolanda Kakabadse, President of WWF International, said:
"The negotiations are at a crucial stage with ministers arriving to support negotiators and sort through the different options on the table. It is essential that negotiators move decisively to strengthen the financial mechanism of the UNFCCC, and establish a robust process under the AWG LCA negotiating body to identify innovative sources of scaled up public finance."
"One area where progress can be made on both mitigation and finance is by addressing emissions from the maritime and aviation industries. The time is right to break the deadlock on this crucial area and move towards implementation."
"Public funds are critical to speed up the development of new technologies, as well as for adaptation, resilience building, and preparedness and capacity building measures. Public funds are also critical in leveraging private sector finance which needs to contribute the great majority of the investments needed in clean energy technologies. Our experience is that public investment and initiatives play key roles in leveraging and directing private investment."
Mark Fulton, Co-chair of the UNEP Finance Initiative Climate Change Working Group and global head of Climate Change Investment Research at Deutsche Bank Asset Management said:
"Private finance for low-carbon endeavors in developing countries can and will only flow at the needed scale, if firstly, the risk-return profile of such investments is competitive with that of conventional investments and, secondly, if domestic policy frameworks on the ground display transparency, longevity and certainty. Public finance from international sources will be needed to manage risks for investors and create the capacity in developing countries to attract and channel private finance into the green, low carbon economy."
NOTES TO EDITORS:
[1] The joint UNEP FI, WWF and IIGCC side event - Financing real transformation? Designing an effective financial mechanism under the Convention - will take place this evening (Monday 6 December) 20.15 - 21.45 in Room Jaguar, Cancunmesse.
The speakers include: Yolanda Kakabadse (President, WWF International); Dean Cooper (Head of Energy Finance, UNEP); Ole Beier Sorensen (Chairman of IIGCC, Chief of Research and Strategy, ATP); Mark Fulton (global head of Climate Change Investment Research at Deutsche Bank Asset Management); and Leif Ervik (Director General, Ministry of Finance, Norway)
For more information please contact:
Mr. Remco Fischer, UNEP Finance Initiative; Email: remco.fischer@unep.org;
Tel. number: +41 76 506 3059
Ms Ashwini Prabha, WWF International; Email: aprabha@wwfint.org;
Tel. Number: +41 79 874 1682
