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$100bn of what?

Published 17th December 2009 - 4 comments - 777 views -

At Copenhagen, the US, Ethiopia and European Union, including France, Germany and the UK, coalesce around a climate finance package of $100bn.

Think it’s definitely good news that discussions on climate cash have finally got moving after two long years of delay but this needs to be the start of the conversation – not the end. Is $100bn enough? A very important issue is that the money must come from public sources - not be subject to the whims of the markets - and it must not be diverted from existing aid promises.  Poor countries will still need to build schools and hospitals – as well as flood defences.

Category: UN Climate Change Conference 2009, | Tags: copenhagen, money, poor countries,



Comments

Eamonn Fitzgerald on 17th December 2009:

“Is $100bn enough?” Well, why not $500bn, or $900bn, then, Angela? By the way, who’s going to pay this $100bn? You, me? Or the people of Greece or the people of Ireland, now that their countries are bankrupt? Maybe the people of Detroit, where the unemployment rate is 50 percent, will pay it. The money must come from “public sources”, you say. But how does the money get into “public sources”? From blogs or from my monthly taxes?

Angela Corbalan on 17th December 2009:

Eamonn,

There are 3 main sources of reliable climate finance under discussion in Copenhagen:

1. Addressing emissions from international aviation and shipping (“bunkers”). A levy or tax on aviation and shipping fuel or the earmarking of revenues raised by auctioning emissions allowances in a new emission trading scheme for aviation and shipping. Up to $30bn per year could be raised in this way.

2. Earmarking revenues from domestic emissions trading schemes (ETS) such as the region wide European Emissions Trading Scheme. Many rich countries will soon benefit from a new source of finance as emission allowances are auctioned to polluting industries in domestic cap and trade schemes. The EU ETS, for example, is expected to generate up to $75bn (€50bn) per year in this way by 2020. 

3. Selling, auctioning or levying a percentage of international emission allowances. Assigned Amount Units (AAUs) are currently given away to countries for free under the Kyoto Protocol. The sale, auction or levy of a percentage of AAUs – as proposed by Norway – could raise up to $200bn per year, guaranteeing sufficient sums will flow to poor countries outside of annual national budgetary decisions.

Eamonn Fitzgerald on 17th December 2009:

Ah, I see. But you might like to read the 9 December statement issued by Europol saying that bogus trading at the EU’s Emission Trading Scheme (ETS) has exceeded €5 billion over the past 18 months alone. Europol says that in some EU countries, up to 90 percent of the entire market volume is fraudulent.

For most people this will cast further doubt over the effectiveness of carbon trading as a way to curb emissions. Europol says the fraud was first suspected late last year, when the volume of trades in European Unit Allowances (EUA), the carbon credits that companies in EU countries buy to offset their greenhouse gas output, mysteriously jumped.

In the EU, caps are placed on the total amount of carbon dioxide that may be emitted. Companies that pollute more than their allotted share, such as steel plants, power plants, cement-makers, and other big industries, are required to buy carbon credits from those companies that do not exceed their allotted share, to keep the total output below the prescribed cap.

In the latest scam, criminals open a carbon trading account on one of six recognized European carbon markets, in the name of a newly registered company. They then buy tax-free carbon credits in another country, transfer those credits into their account, and then sell them to a carbon broker in yet another country. The gangsters collect VAT (which varies from between 15 to 25 percent depending on the EU country) on each transaction, but never pay the VAT to any European tax agency. The company and its owners vanish before tax authorities realize they are owed large amounts of VAT.

And this, Angela, is the system you trust?

I suggest you read the Europol statement: http://www.europol.europa.eu/index.asp?page=news&news=pr091209.htm

Andrey on 08th February 2010:

Interestingly and from whom as a result these taxes will deduct, who will close a chain. But public sources - the correct decision ourselves spoil and to pay.If I have correctly understood about what you.

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