EU cuts funding plan for post-Kyoto climate deal

The European Union has scaled back plans to give billions of euros to poor countries to persuade them to help battle climate change, putting pressure on developing nations to raise their own contributions to a post-Kyoto agreement later this year.

Funding from rich nations to the developing world has emerged as the main stumbling block to progress in climate negotiations ahead of international talks in Copenhagen in December.

Ethiopia warned last week that Africa would veto any deal at Copenhagen that was not generous enough.

The 27-country EU is trying to find unity on its contribution to break the impasse. The bloc indicated last week that it might pay 13-24 billion euros annually to the developing world by 2020 to help with a total bill of around 100 billion euros (EURACTIV 08/09/09).

But that contribution was lowered earlier this week to 2-15 billion euros, according to a draft European Commission report obtained by Reuters on Tuesday. The numbers are due to be finalised by Thursday and could change again before then.

« We welcome the fact they’ve put concrete numbers on the table but the figures are too low, » said Greenpeace campaigner Joris den Blanken. « There’s no time for such political games, » he added. « We only have three weeks left of active negotiations. »

Much of the reduction in funding came after the EU changed its view of how emissions reductions from industry and power stations should be funded in the developing world.

Around 80-90% of those emissions cuts would be made via improvements in energy efficiency, which would pay for themselves and should therefore be financed by local businesses, the Commission report said.

But den Blanken disagreed, pointing to the EU’s own slow progress in stimulating investment in energy efficiency at home. « The fact is these measures cost money at the start and don’t pay back instantly, » he added.

The EU has been keen to prove to developing nations that it is sincere in its pledges of finance and recently suggested « fast-start financing » from 2010 as early proof it is ready to help.

Rich nations should mobilise 5-7 billion euros a year from 2010, and the EU could provide up to 2.1 billion euros of that, the report said.

It has also sought to ease the pressure on taxpayers in rich countries by suggesting that shipping and aviation could be tapped as a major source of funds for tackling climate change.

Shipping and aviation could be taxed via a levy on fuel or in carbon markets, with revenues from both sectors as high as 25 billion euros a year in 2020, if their emissions were capped at 30% below 2005 levels, it added.

Copenhagen talks in danger of failure

UK Foreign Secretary David Miliband said there was a real risk that talks in Denmark in December to agree a successor to the Kyoto Protocol will fail as politicians focus on the economic downturn rather than the longer-term threat of climate change.

« There is a real danger that the talks scheduled for December will not reach a positive outcome and there is an equal danger that in the run up to Copenhagen people don’t wake up to the danger of failure until it’s too late, » he told a news conference.

« There is no question that developed countries bear responsibility for the climate change that is already happening and that is going to happen for some decades hence, » said Ed Miliband, Britain’s energy and climate change minister, who spoke at the news conference alongside his brother David.

« But the other truth at the heart of these negotiations is that 90% of the growth in emissions will come from developing countries.

« Developing countries need to be part of the solution as well. Not emissions cuts at the moment, but they need to show how they will slow the growth of their emissions by 2020 in advance of cuts in emissions later. »

Prime Minister Gordon Brown has said the world should provide $100 billion per year by 2020 to help the poorest countries deal with the consequences of climate change.

(EURACTIV with Reuters.)