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EXCLUSIVE-EU cuts funding for post-Kyoto climate deal
* EU could pay 2-15 bln euros yearly to poor nations by 2020
* EU mulls early payment of up to 2.1 bln euros yearly
* Shipping, aviation might face 30 percent CO2 cut by 2020
By Pete Harrison
BRUSSELS, Sept 8 (Reuters) - The European Union has scaled back plans to give billions of euros to poor countries to persuade them to help battle climate change, a draft document shows.
Funding from rich nations to the developing world has emerged as the main stumbling block to progress in climate negotiations ahead of international talks in Copenhagen in December.
Ethiopia warned last week that Africa would veto any deal at Copenhagen that was not generous enough.
The 27-country EU is trying to find unity on its contribution to break the impasse.
"A deal on financing will be central to achieving an agreement at Copenhagen," said a draft European Commission report obtained by Reuters on Tuesday.
The bloc indicated last week that it might pay 13-24 billion euros ($19-35 billion) annually to the developing world by 2020 to help with a total bill of around 100 billion euros.
But that contribution was lowered earlier this week to 2-15 billion euros, according to the report entitled 'A European blueprint for the Copenhagen deal'.
"We welcome the fact they've put concrete numbers on the table, but the figures are too low," said Greenpeace campaigner Joris den Blanken.
"There's no time for such political games," he added. "We only have three weeks left of active negotiations." The numbers are not due to be finalised until Thursday.
Much of the reduction in funding came after the EU changed its view of how emissions reductions from industry and power stations should be funded in the developing world.
Around 80-90 percent of those emissions cuts would be made via improvements in energy efficiency, which would pay for themselves and should therefore be financed by local businesses, the Commission report said.
But den Blanken disagreed, pointing to the EU's own slow progress in stimulating investment in energy efficiency at home. "The fact is these measures cost money at the start and don't pay back instantly," he added.
The EU has been keen to prove to developing nations that it is sincere in its pledges of finance and recently suggested "fast-start financing" from 2010 as early proof it is ready to help.
"Funding should be mobilised in the short term to respond to urgent and identified needs for the most vulnerable developing nations," the report said.
Rich nations should mobilise 5-7 billion euros a year from 2010, and the EU could provide up to 2.1 billion euros of that, it added.
The EU has also sought to ease the pressure on the budgets of rich countries by suggesting that shipping and aviation could be tapped as a major source of funds for tackling climate change.
Shipping and aviation could be taxed via a levy on fuel or in carbon markets, with revenues from both sectors as high as 25 billion euros a year in 2020, if their emissions were capped at 30 percent below 2005 levels, it said. (Reporting by Pete Harrison; Editing by Anthony Barker)
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