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Money from richer countries may be the key to Copenhagen talks, Danish minister says

NEW YORK -- Developed countries must be able to deliver new and innovative financing alternatives for adaptation and greenhouse gas mitigation to the developing world if there's any hope that the conclusion of international climate change negotiations in Copenhagen this year will succeed, Denmark's climate and energy minister said yesterday.

Chatting with reporters during a break from her visit to New York for meetings with U.S. and U.N. leaders, Connie Hedegaard, Denmark's minister for climate and energy, said the key to a successful outcome at Copenhagen is to bridge the gap between the developed and developing world. That means committing to new financing structures to entice developing countries to make their own contributions.

"We must have truly additional financing on the table very soon," Hedegaard said.

Options could include a tax on bunker fuel, or even a global $2 tax on CO2 emissions, as was recently proposed by Switzerland. But Hedegard said that while she is cognizant of the reluctance of the public in rich countries to commit more money to something in the midst of a global financial crisis, financing for Third World adaptation could be the impetus for a breakthrough at the final round of the U.N. climate talks.

The Danish government estimates that the developing world will need tens of billions of dollars each year in additional aid to help shore up agriculture sectors, improve water access, and strengthen infrastructure in poor countries to help improve their resilience to climate change.

"Politically, it must be additional, and that could be a game changer," she said.

Hedegaard said a deal at Copenhagen that diverts resources to energy efficiency and renewable energy technologies could also be "the one thing that could help us to solve the economic crisis." She cited her own country as an example of this, as more people today are employed in Denmark's wind power industry than in the coal-fired power industry.

Deadline 'is very tight' for new commitments

She also suggested that the window of opportunity for achieving a successor to the Kyoto Protocol agreement in Copenhagen is much narrower than people realize. Though most assume that the international community has seven months left from now to early December, when nations convene at Copenhagen, to cut a deal, Hedegaard suggested that landing an agreement depends heavily on the outcome of the G-20 talks, major economies meetings hosted by the United States, and a global leaders summit on climate change scheduled to take place in September at U.N. Headquarters in New York.

"The next two to four months will be the crucial months," said Hedegaard. "In that sense, the deadline, the timetable, is very, very tight."

In her discussion with the press and Columbia University professor Jeffrey Sachs, a renowned development activist and head of Columbia's Earth Institute, Hedegaard echoed the general sentiment surrounding the talks that much hinges on what actions the United States will take in the next few months and what type of proposals and commitments the Obama administration can deliver to the Copenhagen talks.

But she said other major economies, including Australia, Canada, Japan and the European Union, must also be prepared to make their own commitments, in particular to adopt targets for greenhouse gas reductions for the near term and long term. Several advanced nations are apparently postponing their own previously planned implementation of cap-and-trade regimes or other climate change policies, causing observers to conclude that many governments are backsliding just as the United States is enhancing its engagement.

"Other major economies among the developed world must deliver, not just the U.S.," Hedegaard said. She chided other governments that may use the difficulties the United States is facing in its own domestic climate debate as an excuse for not moving forward with their own policies.

Much will also depend on the bilateral engagement between the United States and China, Hedegaard said.

China 'will have to deviate from business as usual'

Lately, Chinese officials have been adopting extreme positions in their public comments on the climate change negotiations. The government has recently said that it shouldn't be held accountable for the greenhouse gas emissions resulting from its production of goods for export, suggesting that major import markets like the United States and Europe should bear the burden of that carbon dioxide output. Most recently, the country called on advanced nations to cut their emissions by 40 percent from 1990 levels by 2020, a level far beyond what any developed nation is prepared to accept.

But Hedegaard insisted that "China would have to deviate from business as usual," especially with regard to the benefit it gets from the Clean Development Mechanism (CDM), the system of international offset credit trading created by the Kyoto agreement.

Hedegaard said that E.U. nations want a complete overhaul of the CDM to ensure that Africa and the least-developed nations benefit the most. The vast majority of CDM projects today are found in China, India, Brazil and Mexico, nations that refuse to adopt limitations on their greenhouse gas output.

Both Hedegaard and Sachs said they expect a tough road ahead to the Copenhagen talks. Still, the Danish climate and energy minister refused to speculate on what the mood of the talks would become should the United States fail to adopt climate change legislation in time.

"One way or another, I'm confident that the U.S. administration will take care that they'll be able to deliver," Hedegaard said.

Sachs, a close observer of the domestic climate debate, voiced less optimism. He said it is likely that U.S. negotiators will at a minimum promise to get their government to commit to a 15 percent reduction in greenhouse gases by 2020, probably using 2005 as a benchmark. But he also thinks the Obama administration could very well arrive at the negotiations empty-handed.

"I think there's a good chance that they can go to Copenhagen without such an agreement," said Sachs.

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