November 5, 2010 / 3:33 PM / 7 years ago

Factbox: U.N. climate study shows ways to raise $100 billion

(Reuters) - Following are findings on Friday by a group of advisers to the United Nations on possible ways to raise $100 billion a year from 2020 to help developing countries combat climate change.

The group, co-chaired by Norwegian Prime Minister Jens Stoltenberg and Ethiopian Prime Minister Meles Zenawi, said the goal was “challenging but feasible.” Stoltenberg handed the report to U.N. Secretary-General Ban Ki-moon.

The group examined sources for new money after world leaders agreed at the 2009 Copenhagen summit to provide poor nations with $100 billion a year from 2020 to help them cut greenhouse gases and adapt to impacts of climate change.

The findings, about sources ranging from carbon pricing to aviation, were little changed from a previous draft.

Figures for 2020 (billions of dollars, except carbon price which is in dollars per tonne of carbon dioxide):

Carbon price Low/15 Medium/25 High/50

Auctions of emissions allowances 2-8 8-38 14-70

Offset levies 0-1 1-5 3-15

International transport:

- Maritime 2-6 4-9 8-19

- Aviation 1-2 2-3 3-6

Other carbon-related revenue

- Carbon tax about 10 for every dollar a tonne

- Wires charge on energy generation

5 for a charge of $0.0004/kWh, or per

dollar/tonne of CO2 equivalent - Removal of fossil fuel subsidies 3-8 - Redirection of fossil royalties about 10

Financial transaction taxes 2-27

Direct budget contributions proposals ranged up to 400

Development bank instruments for each 10 in capital

replenishment, about 30-40 billion in gross

lending, corresponding to about 11 in net flows

Carbon market offsets 8-12 Gross 38-50; 150

net 8-14

Private finance with medium carbon price, 200

in gross flows and 20-24 in net

flows

KEY ASSUMPTIONS:

AUCTIONS:

Refers to the AAU (assigned amount units) and ETS (emissions trading scheme) and assumes a total carbon market of 15 billion tonnes by 2020. It assumes that between 2 and 10 percent of the total market size is auctioned and earmarked for international climate finance. A carbon price of $25 a tonne equates to a market of $375 billion; 2-10 percent auctioning provides a total $8-38 billion.

OFFSET LEVIES:

Assumes a levy of 2-10 percent on offset market transactions. Offset market is assumed at 1.5 to 2 billion tonnes, or $37.5 to $50 billion at a carbon price of $25 a tonne. A levy of 2-10 percent of $37.5-$50 billion is $1-5 billion.

INTERNATIONAL TRANSPORT:

Maritime assumes 0.9 to 1 billion tonnes of emissions, priced at $25 per tonne, equivalent to $22.5 to $25 billion. Subtracting developing country share of 30 percent and estimating that 25-50 percent of the rest can be used for climate finance leads to estimate of $4-9 billion.

Aviation assumes total passenger and freight emissions in 2020 of 800 million tonnes of which 250 million are covered, excluding developing nations share and flights within the European Union. A total revenue pool on 250 million tonnes at a carbon price of $25 a tonne equates to $6 billion. Assuming 25-50 percent of these revenues can be earmarked for climate finance means $2-3 billion.

OTHER CARBON:

A $1 tax on 11-13 billion tonnes of energy-related emissions translates into roughly $10 billion of revenues

Wires charge assumes power sector emissions priced at $1 a tonne tax on carbon dioxide on 4.7 billion tonnes of power-generated emissions in OECD countries, giving total of about $5 billion of revenues.

Fossil fuels subsidies are estimated at up to $8 billion for industrialised nations within the Group of 20.

Redirection of fossil royalties. Estimated at billions to tens of billions of dollars

FINANCIAL TRANSACTION TAXES (TOBIN TAX):

Assumes $3 trillion per trading day, giving an annual total of about $756 trillion. Assumes a tax rate of 0.001-0.01 percent and a reduction in volume of 3-6 percent for a 0.001 percent tax, and 21-37 percent for a 0.01 percent tax rate which translates into revenues of $7-60 billion. Assumes 8.5 percent compensation for developing countries’ share of transactions and use of 25-50 percent of total revenues for climate change, or $2-27 billion.

DIRECT BUDGET CONTRIBUTIONS:

The report says that some members referred to proposals in U.N. talks for rich nations to provide 0.5 to 1.0 percent of gross domestic product to climate financing, or between $200 and $400 billion. It says others said contributions should be determined by national circumstances.

DEVELOPMENT BANK INSTRUMENTS:

Based on additional paid-in capital from developed countries only. For gross flows, leverage factor of $3-4 non-concessional lending per dollar of paid-in capital. For net flows, leverage factor is 1.1 per $1 of paid-in capital.

CARBON MARKET OFFSETS:

Assumes offset price of $25 per tonne on 1.5 to 2 billion tonnes of offset flows, demanding tight emissions caps. A net estimate of carbon market offset flows would be in the range of $8-14 billion per year, depending on transaction costs.

PRIVATE FINANCE: Up to $500 billion, generated with a leverage factor of 2-4 on public flows/carbon market offsets. A medium carbon price might result in approximately $150 billion gross flows and an estimated $15-18 billion net flows.

Compiled by Alister Doyle in Oslo, additional reporting by Gerard Wynn in London; editing by Mark Heinrich

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