Europe’s finance stalemate threatens global climate deal | ActionAid UK

Europe’s finance stalemate threatens global climate deal

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Flooding in India

European ministers are failing to agree a finance plan to tackle climate change, threatening the global deal in Copenhagen, according to international development agency ActionAid.

UNDP and European Commission figures show that €135 billion (£118 billion) a year by 2020 is needed to tackle climate change in developing countries. ActionAid’s analysis shows that the EU should be providing more than €40 billion (£35 billion) a year to developing countries by 2020. Around half of that figure should go to helping people to adapt to the problem in countries most vulnerable to climate change.

“€135 billion a year is not going to fall out of the sky – it will require a combination of automatic mechanisms, including global carbon taxes, to raise the money,” said Tom Sharman, ActionAid’s Head of Climate Change (an ActionAid report about this can be downloaded at www.stampoutpoverty.org/?lid=10939).

There are currently several innovative proposals on financing in the draft text of the Copenhagen agreement: Norway’s proposal to auction pollution permits, Switzerland’s global carbon tax, an international air passenger levy backed by the Least Developed Countries and championed by Bangladesh, a tax on shipping and an international currency transaction tax.

Yet so far the EU has been unable to reach agreement among its member states to give solid support to any of these proposals. Tomorrow's meeting of EU finance ministers is unlikely to change that. Several member states are happy to postpone a decision, including Germany which has four state elections and a federal election later this year.

“Without new and additional money for adaptation, people being hit hardest by climate change – like the poorest smallholder farmers in the south – will be left on their own to face a problem they did nothing to create,” said Harjeet Singh, Policy Advisor in ActionAid’s Emergencies Team.

Time is running out for a decent global deal on climate change to be agreed by the end of the year. European Environment Commissioner Stavros Dimas has repeatedly said: "No money – no deal". If disaster is to be avoided in Copenhagen, then Europe must provide its fair share of the finance and back the best ideas.

UK media contact: Tony Durham, +44 (0)20 7561 7636, mobile +44 (0)7872 378251

Notes for editors:

1. Who should pay to tackle climate change in developing countries? An ActionAid rough guide can be downloaded at: http://www.actionaid.org/assets/pdf/Climate%20finance%20briefing%20in%20template%20May%202009%20FINAL.pdf

2. The 'Generation of financial resources' section is on page 44 of the draft negotiating text for the Copenhagen Agreement. It can be downloaded from:

3. An ActionAid-backed report, 'Assessing the alternatives: financing climate change mitigation and adaptation in developing countries' (Stamp Out Poverty, May 2009), which looks in detail at the merits of the various revenue-generating proposals, can be downloaded from:http://www.stampoutpoverty.org/?lid=10939

4. UNDP reference – adaptation number:

UNDP Human Development Report 2007/2008, page 194: "In total they amount to new additional adaptation finance of around US$86 billion a year by 2015 (table 4.3).": http://hdr.undp.org/en/media/HDR_20072008_EN_Complete.pdf

Exchange rate of US$ to € assumes €1=US$1.34528 and US$1=€0.74337. Numbers are rounded up to the nearest US$1 billion and €1 billion respectively. This exchange rate applies to all numbers in this paper.

5. EC references – mitigation number:

European Commission staff working document accompanying Communication ‘Towards a comprehensive climate change agreement in Copenhagen’ part 1, ‘costs associated with the resulting actions in the energy system and the industrial sectors’, page 74: http://ec.europa.eu/environment/climat/pdf/future_action/part1.pdf

European Commission staff working document accompanying Communication ‘Towards a comprehensive climate change agreement in Copenhagen’ part 1, ‘reductions in emissions from deforestation and forest degradation in development countries’, page 9: http://ec.europa.eu/environment/climat/pdf/future_action/part1.pdf

European Commission staff working document accompanying Communication ‘Towards a comprehensive climate change agreement in Copenhagen’ part 1, ‘mitigation action to reduce non-CO2 greenhouse gases in agriculture: nitrous oxide and methane’, page 86: http://ec.europa.eu/environment/climat/pdf/future_action/part1.pdf