Conclusions

The post-2012 climate change agreement cannot hope to leverage private-sector investment on the scale needed unless strong climate change targets are agreed by Annex I countries and commitments by developing countries to reduce emissions below the business-as-usual scenario. These commitments will be the key drivers for the private sector, which would also benefit from a long-term target for emissions reductions.

UNFCC Technology Fund EGTT/new technology and finance institutions

Capacity-building

UNFCC Technology Fund EGTT/new technology and finance institutions

Capacity-building

UN, international, regional and national organisations; NGOs

Scaled-up convention financial mechanism

UN, international, regional and national organisations; NGOs

Scaled-up convention financial mechanism

Note: EGTT = Expert Group on Technology Transfer, MDB = multilateral development banks, MRV = measurable, reportable and verifyable, NGOs = non-government organizations, PFAN = private financing advisory network, R&D = research and development, RDBs = regional development banks, REEE = Renewable Energy and Energy Efficiency Fund.

Figure 24.7 A potential model for an enhanced technology financing mechanism under the convention

Public financing will be crucial to achieving the objectives of the convention; however, there is a need to overhaul the financial mechanism of the convention and raise its prominence so that it can shape the overall financial landscape as it affects climate change.

It is difficult to escape the need for a large new specified fund for targeted investments in global climate change priorities. The UNFCCC (2008b) has surveyed the current proposals for new sources of finance and found that there are many options which could meet the needs for financing - but they will ultimately depend upon contributions from national budgets. Whether a new fund should be established under the convention, or housed within a Bretton Woods institution or the GEF, is a matter for judgement. However, creating a new fund of funds under the convention has the distinct advantage of creating certainty while maximizing the potential of existing financial institutions. This is crucial given the radical shifts in financing that is required. Research undertaken for the UNFCCC indicates that convention financing in the order of US$50 billion to $100 billion per annum would be ideal. Whether it is possible to negotiate as part of the Copenhagen agreement is to be seen.

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