Dizzying Array of Non-Market Climate Finance Is Messy, PwC Says

Developed nations are offering emerging countries a “dizzying” choice of non-carbon-market climate aid amid accusations they aren’t doing their fair share to halt global warming, said PricewaterhouseCoopers.

“Donor programs have been springing up left, right and center,” said Celine Herweijer, a director in PwC’s climate change team in London. “For developing nations, it can be quite dizzying. It’s a messy environment,” she said yesterday after returning from environment-protection negotiations in Durban, South Africa.

This month’s talks, planned to finish tomorrow, have a chance to improve the flow of direct funding from governments of developed nations to poorer countries and help increase payments from private sources, Herweijer said. Some developing nations are suspicious that leveraging private finance is a way for countries to reduce their public pledges, she said Dec. 3 in a website statement.

Climate envoys from almost 200 nations are putting together a Green Climate Fund that will help harmonize aid to developing nations, PwC said. Public climate flows reached $37 billion last year, more than estimates in previous years, the Organization for Economic Cooperation and Development said in a report on Dec. 1. Private flows were at least $80 billion.

Climate finance stems from about 40 nations listed as developed under the UN Framework Convention on Climate Change, as well as from about 25 public funds and about 15 development banks. Investment from the main UN carbon-offsetting market, the Clean Development Mechanism, dropped 80 percent in the past four years to $1.5 billion in 2010, World Bank data from June shows.

Stimulating Private Money

“Governments are beginning to use public money to stimulate private money, for example by cutting risk,” Herweijer said. Richer nations will need to work hard to win the trust of the poorer nations and make sure as little as possible taxpayer money is wasted at a time when governments are seeking overall spending cuts, she said.

U.S. Special Envoy on Climate Change Todd Stern said today it’s a “misconception” that the nation is seeking to delay the fight against global warming past 2020 and that he’s pushing for immediate action.

Speaking at the talks in Durban, Stern said the U.S. is confident the meeting will finish work on the Green Climate Fund that would channel as much as $100 billion a year in climate aid to developing nations.

The U.K. government said Dec. 6 it paid out two-thirds of its 1.5 billion pounds ($2.4 billion) of “fast-start” finance for climate protection and adaptation in developing nations promised for 2010 to 2012. The EU will spend 14 billion euros ($18.7 billion) in the seven years through 2020, it said yesterday.

U.K. Spend

Britain spent 487 million pounds this year, compared with 569 million pounds last year, according to a document on the website of the Department of Energy and Climate Change. It has budgeted 2.9 billion pounds through 2015.

One program includes putting together climate-change adaptation plans, which have been endorsed for Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan, Zambia, Grenada, Jamaica, St. Vincent and the Grenadines, St. Lucia and Samoa, according to the document.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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