Carbon penalties said route to $100 billion aid

OSLO Sun Oct 10, 2010 9:44am EDT

OSLO (Reuters) - More penalties on greenhouse gas emissions could help raise $100 billion a year from 2020 to enable poor nations to slow global warming, despite austerity in many rich countries, Norway's prime minister said.

Jens Stoltenberg, who will co-chair a U.N. advisory group about climate financing in Addis Ababa on Tuesday, said raising $100 billion a year was "feasible" but one of the hardest issues in talks on a new U.N. climate deal.

Rich nations agreed at December's U.N. summit in Copenhagen to give poor countries an annual $10 billion in aid for 2010-12, rising to $100 billion from 2020, to help them curb emissions and cope with the impacts of global warming, such as floods, heat waves or rising seas. But they did not say how.

Possible sources of the new cash include new national taxes, carbon trading, higher prices on plane tickets or shipping fuels, Stoltenberg said in an advance interview for the Reuters Global Climate and Alternative Energy Summit from October 11-13.

"I believe that carbon pricing might be ... one of the main ways to achieve the $100 billion," he said.

Stoltenberg's group of experts, co-chaired by Ethiopian Prime Minister Meles Zenawi, is due to report to U.N. Secretary-General Ban Ki-moon before the next annual U.N. climate talks in Cancun, Mexico, from November 29-December 10.

Stoltenberg said placing a price on emissions would help push down pollution, promote development of cleaner technologies and raise government revenues.

"There are many different ways ... of developing carbon pricing," he said, listing national or international taxes, emissions trading or auctioning of emissions allowances.

PLANES, SHIPS

"Issues not decided upon but which we are discussing are for instance the question of can we include international aviation, international shipping into carbon pricing?" he said.

All rich nations except the United States are members of the U.N.'s Kyoto Protocol, which obliges average cuts in greenhouse gas emissions of 5.2 percent below 1990 levels by 2008-12. Kyoto only includes aviation and shipping on domestic routes.

Stoltenberg said the group would come up with advice but stop short of an exact formula for raising $100 billion a year.

"We will not be able to present something that is completely finished: 'This is how we raise $100 billion'. That is not the mandate of the terms of reference either," he said.

He said it was possible to raise the cash, mixing public and private sources, despite austerity that is forcing deep budget cuts in many developed nations.

"One of the great challenges we are facing is to find a balance between private and public funds," he said.

"I think that one of the conclusions we will agree on is that it is feasible but very challenging to be able to mobilize $100 billion," he said, adding it was "perhaps the most challenging issue within very challenging negotiations."

A final round of U.N. preparatory talks for Cancun ended on Saturday in Tianjin, China, marred by disputes between China and the United States, the top emitters, but with some progress on issues including finance and green technology transfers.

Stoltenberg also said the U.N. advisory group might look at ways to increase aid toward $100 billion in 2020 from 2012. Analysts say some sources, such as U.N. trading mechanisms, are likely to be easier to tap than global shipping or aviation.

"One of the issues, which is not in our terms of reference but which we might look into, is the question of the ramp up. What to do between 2012 and 2020?" he said.

(Editing by Janet Lawrence)

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