WASHINGTON - A
new report on climate change financing options released today by a U.N.
Advisory Group unwisely emphasizes carbon markets and other private finance
options, while irresponsibly advocating an increased role for multilateral
development banks (MDBs). Despite concluding that public sources of climate
finance are available and promising, the report’s findings downplay the
role that public finance can and must play in helping developing countries deal
with climate change.

The
U.N. Secretary General’s High-level Advisory Group on Climate Change
Financing (AGF) issued its report today ahead of the annual U.N. climate summit
in Cancún that begins November 29. The report outlines a number of public and
private options to raise money to help developing countries adapt to the
impacts of climate change and reduce greenhouse gas emissions. 

“The AGF recommendations are unfortunately based on
unduly optimistic econometric projections and a blind faith in the capacity of
highly volatile and unreliable carbon price signals to induce long-term investments
in low carbon energy production and manufacturing,” said Steve Suppan of
the Institute for Agriculture and Trade Policy. “A better start on
climate finance would be for developed countries to make good on their $30
billion pledge for immediate funding to allow developing countries to adapt
agricultural production and water management systems to the imminent ravages of
climate change.”

“It was inappropriate for the AGF Report
to make reference to the role of multilateral development banks. MDBs
are not a source of climate finance, but are used as a channel. And they are
not acceptable even as a channel. MDBs are a part of the climate problem, not
the solution. The World Bank and other MDBs are far, far more adept at causing
climate pollution than in helping countries to mitigate or adapt to it. Using
MDBs as a channel would also mean climate finance in the form of loans or
other debt-creating instruments,” said Lidy Nacpill of Jubilee South
– Asia/Pacific Movement on Debt and Development.

“Adaptation funding, in
particular, is compensation for damages done by developed countries and should
only be given in grants. It is untenable that the AGF suggests otherwise. The
enormous costs of dealing with climate change must not add to the already heavy
debt burdens experienced by many developing countries,” added Nacpil.

“The
AGF report—as limited in scope and conservative in its estimates as it
is—still shows that there are numerous viable options to generate public
finance for climate change,” said Ilana Solomon of ActionAid USA.
“Developed countries have no excuse for inaction. The options are there.
They must work through the U.N. Framework Convention on Climate Change to come
to agreement on a combination of public sources to generate the desperately
needed resources to help developing countries confront climate change."

“The AGF acknowledges that meeting the needs of developing
countries will take a ‘systemic approach’ to financing climate
adaptation and mitigation,” noted Janet Redman, co-director of the
Sustainable Energy and Economy Network at the Institute for Policy Studies.
“Options like a financial transaction tax meet the mark: stabilizing the
economy by curbing dangerous speculation and raising hundreds of billions of
dollars each year for global public goods like combating climate change. The AGF is
undercutting its own mission by underestimating the revenue generated by a
feasible and popular source of public finance."

The groups expressed concern that the AGF was guided by a
pledge developed countries made in Copenhagen to mobilize $100 billion per year
by 2020 in public and private finance—a pledge which falls short of
reasonable estimates of climate financing.

“$100 billion is an arbitrary, political figure that
is based neither on need nor on equity. If the U.S. government rapidly
mobilized trillions to bail out Wall Street, why cannot at least equal effort
be put toward bailing out the planet from a climate crisis that rich countries
caused?” said Karen Orenstein of Friends of the Earth U.S.

In October, at the global climate talks in Tianjin, more
than 25 civil society organizations sent a letter to
the co-chairs of the AGF outlining their recommendations for climate finance.

ActionAid USA, Friends of
the Earth U.S., Institute for Agriculture and Trade Policy, Institute for
Policy Studies, Jubilee South – Asia/Pacific Movement on Debt and Development.