Finance questions raised in draft U.N. climate paper

Reuters News
Posted: Dec 03, 2011 6:13 AM
Finance questions raised in draft U.N. climate paper

By Agnieszka Flak and Jon Herskovitz

DURBAN (Reuters) - Taxes on financial transactions, part of a $100 billion fund for climate change projects, were not present in a draft document of a major working group released on Saturday, raising questions about how the fund's coffers will be filled.

The draft negotiating text is the first major paper produced from the U.N. talks among nearly 200 nations that started this week in the South African port city of Durban.

A foreign exchange transaction tax has been floated as a stable way to fill the fund by shifting some responsibility from governments, whose policies can change. The fund is intended to reach at least $100 billion a year by 2020 to help poor countries most affected by the warming planet.

Other proposals still on the table include shipping and aviation taxes.

"There is actually a real danger that the money is falling out of the text," said Tove Ryding, a climate campaigner for Greenpeace.

The draft negotiating text that applies to all parties in the U.N. talks lists options on various points that will be used for discussions when more senior envoys and ministers arrive next week. The talks are slated to end on December 9.

U.N. envoys called the text a "snapshot" of where the talks are after a week.

For example, the text lists three options for filling the $100 billion a year fund that range from going beyond the original goal more quickly to "(providing) ongoing support ... to address the urgent and immediate needs of developing countries that are particularly vulnerable," without mentioning a specific monetary goal.

"We have the most ambitious Durban outcomes and the poorest Durban outcomes in here," Ryding said.

The text is separate from the Kyoto Protocol, which includes emissions cuts that are binding on most advanced countries which have historically choked the atmosphere with the gases blamed for a warming planet, rising sea levels and amplifying severe weather patterns.

China, the world's largest CO2 emitter but not bound by Kyoto's obligations, helped revive the troubled talks by saying it could join a legally binding deal to cut its emissions of the heat-trapping gases.

"We do not rule out the possibility of legally binding. It is possible for us, but it depends on the negotiations," Su Wei, China's lead negotiator, said on Friday - speaking in English - at a media briefing on the sidelines of the two-week talks.

The European Union has said it will sign up to a second round of targets under the 1997 Kyoto Protocol, but only if all big emitters agree legally binding cuts that will start in 2020.

So far, China, India and the United States, the world's top three emitters, are not bound by Kyoto and have refused to commit themselves to legal targets, raising the prospect that no country will have binding targets to cut emissions after 2012.

(Additional reporting by Stian Reklev, Andrew Allan and Michael Szabo; editing by Tim Pearce)