AMSTERDAM (Reuters) - The debate on using public and private financing to fight climate change must be resolved for the Cancun climate summit to succeed where Copenhagen failed, U.N. climate chief Yvo de Boer warned on Wednesday.
World leaders meet in Cancun in Mexico at the end of the year to hammer out a legally binding climate agreement, after they failed to do so in Copenhagen last December.
The focus before that meeting should be on getting short-term financing moving through existing institutions and clarifying the mechanisms for long-term finance, de Boer said.
Developing countries also need to be confident that public money will go to their priorities, he added.
“If we can create some kind of supervisory mechanism, which maybe doesn’t manage all of the money, but does determine the criteria of what should and should not be considered as eligible for financial support, we will make major steps forward,” de Boer told Reuters in an interview on the sidelines of a conference.
How much will come from public money and the private sector has yet to be defined.
“The last thing we should do is create a firewall between public and private finance. We should be using public finance to change the investment parameters of the private sector,” de Boer said.
This could be done by using public money to finance new state-of-the-art technology and public-private partnerships to give business the investment security it would not have on its own, he said.
The Copenhagen summit yielded a non-binding political accord in its final hours that fell far short of the goal of reaching a legally binding agreement to replace the existing Kyoto Protocol and strengthens the fight against climate change.
De Boer said it was important to resolve the debate on finance ahead of the Cancun summit, as that would create more willingness to talk about the role of markets.
As part of a U.N. climate deal last year, rich nations agreed to provide $10 billion a year from 2010-12, with a goal of $100 billion a year from 2020, to help poor nations deal with climate change.
But the figure of $100 billion per year is not enough to tackle climate change, de Boer said.
According to the International Energy Agency, there will be a $20 trillion investment in the energy sector is needed over the next 20 years, which would push emissions up by 50 percent in the absence of clear sense of policy direction.
“The challenge is to use public finance to make sure that 20 trillion goes green and not brown. In that context, $100 billion a year is not enough,” de Boer said.
Earlier de Boer said the core of the financing problem was that the process was an inter-governmental one and did not involve dialogue with business.
“I do believe the process needs a good spanking. More meetings does not necessarily mean more success,” he said.
Reporting by Nina Chestney; Editing by Amanda Cooper
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