London Should Be Green Clearinghouse, Minister Says

London should be the clearinghouse as private investors provide at least half the funding needed to fight global warming in developing nations, U.K. Climate Change Minister Greg Barker said.

“It’s likely that at least half, if not considerably more” of the $100 billion a year that will be required to fund cleaner sources of energy and adapt to climate change will come from private financing, Barker said today in an interview before his speech at the London Stock Exchange.

While more than 190 envoys failed at last year’s climate talks in Copenhagen to agree on a climate change treaty, developed countries committed to pay as much as $100 billion a year by 2020 in aid to poorer countries to help tackle global warming. Representatives of Morgan Stanley and Deutsche Bank AG are scheduled to speak at the London Stock Exchange today to guide discussions on how the government can help lower barriers to investing in clean technologies in developing nations.

The private sector will drive investments in clean-energy technologies, while there will be a “stronger role of public sector finance for adaptation measures such as flood defenses and other water-related projects, said Barker, a member of the Conservative Party. He previously worked in financial public relations, including a role as head of international investor relations at OAO Sibneft, the Russian oil producer sold by Roman Abramovich to OAO Gazprom for $13.1 billion in 2005.

‘Policy Framework Right’

“We need to make sure that we get the policy framework right in order to unlock large-scale private investment for clean technologies,” Justine Greening, economic secretary to the U.K. government’s treasury, said in an e-mailed statement.

About $1 trillion a year will be needed by 2030 to reduce global greenhouse gas emissions, according to the International Energy Agency. Investments in the clean-energy sector more than doubled to $162 billion in the four years through to 2009, according to the U.K. government.

“If we don’t put a solid financial architecture on climate change, we’re not going to solve this issue,” Yvo de Boer, a former UN climate chief, told reporters today at the London offices of KPMG International, where he now serves as an adviser on sustainability and climate change. “We need an architecture that makes it attractive for investors to be active.”

That financial mechanism needs to be agreed at UN climate talks this year, before being translated into a binding treaty at the end of 2011, he said.

“We need to encourage greater dialogue between policy makers in governments of developing nations and key capital market players,” Barker said. Developing nations need to show “strong governance and transparency” to help attract investment from the private sector, he said.

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