LONDON (AlertNet) - The annual $100 billion rich countries have agreed to mobilise by 2020 to help developing nations address climate change is "a very modest sum", according to a top academic who is a member of a high-level panel that will work out how to raise the money.
The pledge "is a small sum in relation to the type of challenges we are talking about," Nicholas Stern, a professor at the London School of Economics, told a conference of development experts in London this week.
Stern cited an estimate from a recent paper that dealing with climate change could increase the cost of meeting the Millennium Development Goals in Africa by around 40 percent, equivalent to $28 billion a year for the next decade.
If that were scaled up to include the support developing countries need to limit growth in their carbon emissions and introduce renewable energy and green technologies, "you get into the few hundreds of billions (of dollars)", Stern said.
Nonetheless, the former World Bank chief economist - who worked with Ethiopian President Meles Zenawi to secure the financing commitment in a climate accord struck in Copenhagen in December - admitted to being "amazed" that developed nations were persuaded to sign up to the $100 billion figure.
The Copenhagen Accord is not legally binding, but over 100 countries have already said they are willing to "associate" with it.
The agreement also says developed countries will provide "new and additional resources" for climate change adaptation and mitigation approaching $30 billion for the period 2010-2012.
Climate activists are concerned that some of this money will come from existing development budgets, and will not be fresh cash.
In a January article published by the Guardian, a British government spokesman said short-term climate funding - for which Britain has pledged £1.5 billion - "was always intended to be part of ODA (official development assistance)". British Prime Minister Gordon Brown has said climate finance on top of ODA will be provided from 2013, he added.
On Thursday, Stern said there is no way of ensuring funding for climate change is not re-packaged development aid, but the risk will be reduced if - as planned - some of it comes from sources other than government budgets.
"Nobody can prove additionality," as funding beyond existing development aid is commonly called, he said. "But if you go for new sources of finance, there's a much better chance that it's additional."
INTEGRATION
The "High-level Advisory Group on Climate Change Financing", which has been set up by the U.N. Secretary-General and is co-chaired by the British and Ethiopian prime ministers, has been charged with exploring ways of raising the money promised by rich countries.
Stern said it will look at innovative methods including carbon taxes, auctioning emissions permits, and levies on financial transactions, air travel and shipping.
The group plans to hold its first meeting in London in late March and will submit its final report before U.N. climate talks that kick off in Mexico at the end of November.
How best to raise and distribute money to help poor countries tackle climate change is a hot topic which is a long way from being resolved. Many development experts feel a fresh approach is needed from the usual aid mechanisms - not least because they see it as form of compensation rather than charity.
Nancy Birdsall, president of the Washington-based Center for Global Development, proposed a mechanism based on responsibility for carbon emissions and vulnerability to climate change in which rich polluting nations would have a legal duty to contribute and poor countries would receive allocations according to their susceptibility to the impacts of global warming.
In a practical sense, however, separating climate funding and development aid could cause problems for those working on the ground. Differentiating a climate adaptation project from a development or mitigation activity could prove difficult when, as Stern says, "the best form of adaptation is development."
In an interview with AlertNet at the conference, Helen Clark, the head of the United Nations Development Programme, gave the example of helping a community restore its water catchment area. This could involve boosting water supplies in an area becoming drier because of climate change (adaptation); replanting forests that have been cut down (mitigation); and in the process boosting incomes and reducing the time people spend finding water (development).
"It's disastrous if climate adaptation, mitigation (and) environment issues are dealt with as though they are something separate from a national development plan," said Clark. "They have to be integrated into that plan and then you'll get the spill-over effects for development."
The experts gathered in London agreed that tackling climate change offers an opportunity to raise extra resources for development as long as the money is not spent separately.
"There should be new sources of funding - I hope there will be new sources of funding - but we're going to have to use them in a way that makes sure it's very much a part of development," Stern said.
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