CLIMATE:

U.N. gets rolling on Copenhagen Accord, forms finance panel

Correction appended

UNITED NATIONS -- The United Nations moved today to implement a key component of the Copenhagen Accord, announcing the launch of a high-level panel to design and oversee a $100 billion annual fund for climate mitigation and adaptation financing in poor countries.

The Advisory Group on Climate Change Financing must design a mechanism to channel cash from developed nations to projects aimed at protecting agriculture and infrastructure from rising seas and weather extremes. The group will also propose strategies for boosting renewable energy and clean technology investments in poor nations in an effort to move stalled international negotiations forward.

U.N. Secretary-General Ban Ki-moon told reporters the new body "will look at how to jump-start the mobilization of new and innovative resources to reach $100 billion annually by 2020." Two prime ministers -- Great Britain's Gordon Brown and Ethiopia's Meles Zenawi -- will lead the panel, whose representation will be divided equally between developed and developing nations' governments.

"Funding would include both public and private sources," Ban said.

There was no mention made at today's briefing of an additional $30 billion for an annual financing facility that wealthy nations agreed to set up at last December's climate talks in Copenhagen. Though the Copenhagen Accord that was agreed to at the eleventh hour of international negotiations last year lacks details, it does commit developed-nation parties to achieving $30 billion a year in mitigation and adaptation financing over the next three years, growing to $100 billion per year by 2020.

Ban said the advisory group will include other heads of state, high-ranking government ministers, central bank administrators, and public finance and development experts. A full list of the high-level panel's membership is forthcoming, he said.

The panel's schedule reflects the slow pace of climate talks. Preliminary results of the group's negotiations are not expected until May or June at the earliest, to be discussed at the regular meetings of the U.N. Framework Convention on Climate Change. The goal is to have a final plan in place by the December 2010 meeting of the Conference of Parties in Cancun, Mexico.

"I will ensure that the results of the group's work are communicated to the UNFCCC Conference of Parties, with the full expectation that the advisory group's work will help build momentum toward the successful negotiation of a comprehensive climate change agreement," Ban said.

Though officials and top negotiators say they are still aiming to craft a new treaty to replace the Kyoto Protocol by the end of the year, most traders in carbon emissions allowances and offsets do not expect that to occur.

Prospects hinge on whether U.S. EPA imposes greenhouse gas emissions regulations or Congress approves a climate bill. Carbon market lobbyists in Washington say privately that they do not expect a bill to pass until 2011 at the earliest.

Carbon market analysts also report that offset project investors active in the United Nations' Clean Development Mechanism (CDM) -- the main vehicle for mitigation financing and technology transfers in the developing world -- are now pulling back or refraining from launching new initiatives.

Though governments and companies in Europe are still purchasing the CDM offset credits, investors fear the entire scheme will cease to exist once the Kyoto Protocol treaty expires at the end of 2012, rendering the credits worthless.

Aside from the CDM and the pending $30 billion to $100 billion a year in annual funding, the only other major international source for mitigation and adaptation project finance is the Global Environment Facility.

The bank's four-year, $3.13 billion account typically devotes just a fraction of its resources to climate change-specific projects. GEF administrators say the fund will run dry by June, and no new resources have been committed for its replenishment.

Correction: The Global Environment Facility is not a part of the World Bank, as stated in previous versions. Its four-year fund is estimated to be worth $3.13 billion.

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