Financing the Green Economy

ADDIS ABABA – At the climate-change summit in Copenhagen last December, political leaders expressed a strong will to urgently combat global warming. As we approach the next climate-change summit in Cancún, Mexico, this December, the international community must deliver concrete results and move forward to address the challenge.

Finance is a key ingredient of the global response to climate change. In this regard, at the Copenhagen summit developed countries committed themselves to the goal of jointly mobilizing $100 billion annually by 2020 to address the needs of developing countries.  These funds would be transferred to developing countries in the context of meaningful – and transparently implemented – mitigation measures taken on their behalf.

United Nations Secretary-General Ban Ki-moon’s High-level Advisory Group on Climate Finance (AGF), which we chaired, was established to identify practical proposals for how developed countries can mobilize this level of climate financing by 2020. The 21-member group included heads of state and ministers from both developed and developing countries, representatives from international organizations, experts on public finance and development, and leaders from the private sector.

Admittedly, the current global economic environment has placed public finances in many developed countries under extreme pressure. Nevertheless, the AGF’s report concludes that reaching the goal of raising $100 billion a year by 2020, while challenging, is feasible. It will require a mix of new public sources, a scaling-up of existing public sources, and increased private flows.