FT Energy Source Copenhagen catch-up: Soros’ $100bn plan, divisions between developing countries and EU members

How to find $100bn

Thursday’s main event was a proposal from billionaire financier George Soros that would give poor countries access to a $100bn loan to tackle the effects of climate change, writes Fiona Harvey in the FT. On the face of it, this proposal could break the impasse between rich and poor countries on financing. Poor countries want rich countries to guarantee $100bn per year in financing by 2020. But rich countries have not agreed anything like that sum, and the talks are stalled on this issue. Soros’ idea is to use an obscure financial instrument known as special drawing rights (SDRs) – a type of basket currency used as an accounting unit as the IMF, and generally held by countries as part of their reserves.  Some poor countries and green groups welcomed the idea enthusiastically, but the EU’s lead negotiator was sceptical. The idea will not be decided on at Copenhagen, but may form part of future discussions.

Developing countries begin to differ

Divisions between developed and developing countries remained, and some cracks also appeared between developing countries. One strand of the discussions has had to be suspended because of complains from Tuvalu. http://blogs.ft.com/energy-source/wp-admin/post.php?action=edit&post=35461The small Pacific island is concerned that without a legally binding agreement treaty emerging from these talks, its future will be in danger. China opposed Tuvalu, one of the first times in these talks that two nations, both classed as developing, have had an open argument. The issue remains to be resolved, and negotiations are carrying on on other tracks. The Indian Express said it ‘set off troubling ripples for India‘, but said assurances from the 43-member Association of Small Island States that  downplayed the divisions on Radio Australia.

Obama links climate change and food security

Not at at the UN meeting, but also in Copenhagen, Barack Obama accepted his Nobel Peace Prize with a speech mentioning climate change – though environment news website Grist accused him of “lumping it in with a laundry list of “soft” issues like economic security, food security, and education.” Grist noted however that he appeared to take aim at Sarah Palin’s controversial Washington Post editorial by saying the science is settled. Environmental groups suggested he earn his prize by taking a strong stand at Copenhagen, reports Bloomberg.

Going postal: Another global sector pledge

Much of the world’s postal industry has joined the shipping and airline industries in promising sector-wide emissions reductions.  The idea of an industry approach to emissions pre-dates the Kyoto Protocol, Fiona Harvey explains in the FT, but isn’t yet included in official talks. The attraction for businesses is that they avoid ‘carbon leakage’, in which companies operating in countries with stricter emissions laws lose business to foreign rivals who pay less under their own countries’ rules. But environmentalists caution it doesn’t work for every industry.

Europe (not quite) in disarray

The focus may be mostly on the US, China, and the tussle over financing for developing countries, but The New York Times reports that the European Union, which likes to see itself as a leader in climate change commitments, is still deciding how to share the cost of helping developing countries among its members.  Despite those differences, the bloc can still make an overall commitment and work out the details later. The topic is being discussed in Brussels on Friday. But the bigger decision, to be taken near the end of Copenhagen meeting, is which of the two emissions reductions goals already given: 20 per cent by 2020, or 30 per cent. As usual the richer EU members favour deeper cuts, while others argue that the commitments from other countries – namely the US – do not warrant the 30 per cent target.


- UN negotiators are preparing a $25bn proposal to save tropical forests (Bloomberg)

- Medvedev to attend conference (Argus)

- Interactive: Who’s who at the climate talks, and what do they want? (NY Times)