Welcoming Gordon Brown’s speech on climate change today (26 June 2009), Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy at London School of Economics and Political Science, said: “This is a timely initiative by Gordon Brown to break the international deadlock over climate change, and he rightly identifies finance as the key stumbling block. Rich countries want to see commitments by developing countries to reduce greenhouse gas emissions and tackle climate change before offering financial support, but the developing countries want strong financial backing from the rich world before they make significant commitments.

“The Prime Minister’s speech identified the most important principles required to make progress on a deal over finance, particularly additionality, which means that developing countries receive funding from the rich countries, over and above existing commitments on development aid, to help them to adapt to the impacts of climate change. Rich countries must, of course, deliver on their existing commitments. However, there remains a potential tension in his speech between the core principle of additionality and his statement that “some climate finance can come from official development assistance”, up to 10 per cent.

“Based on estimates by the United Nations Development Programme, it seems likely that developing countries will need to receive US$100 billion a year by 2020 from the rich countries to help them adapt to the impacts of climate change. Achieving development goals in a more hostile climate will be more expensive.

“While private funding can make a significant contribution, through carbon markets, to developing countries for mitigation efforts to reduce emissions, substantial public funds will also be required, for instance, to promote the development and sharing of new technologies and to achieve the vitally important task of halting deforestation. Importantly, the Prime Minister’s speech emphasises that donor countries should provide financial support for mitigation actions set out in sustainable development plans by the developing countries. Both mitigation and development are integral to the development process and should be part of, not separate from, development plans. The financial support must recognise both the scale that is necessary and the fact that developing countries will shape their own plans.

“As the Prime Minister highlighted, the Copenhagen meeting is just 23 weeks away. It is vital to move forward now and the issue of finance is of the utmost importance.”

Notes for Editors

  1. The Grantham Research Institute on Climate Change and the Environment was launched at the London School of Economics and Political Science (LSE) in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment.
  2. The Centre for Climate Change Economics and Policy is hosted by the University of Leeds and LSE. It was officially launched at the University of Leeds on 27 January 2009. The Centre is funded by the UK Economic and Social Research Council and Munich Re.
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