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Informal Thematic Debate of the General Assembly
Climate Change as a Global Challenge
31 July 2007, United Nations
The way forward: International Context for
a post-2012 agreement
Yvo de Boer
Executive Secretary
UNFCCC
Tackling climate change
• Major sustainable development issue
• Need for a global approach
• Need for a long-term policy
• Requires action on mitigation and adaptation
• Technology is at the core of the solution
Industrialized countries
• Minimizing costs to their economies
• Avoiding negative impacts on their competitiveness
• Ensuring adequate and comparable level of effort
amongst themselves
• Enhancing participation by developing countries in the
future regime
Developing countries
• Overriding concerns are poverty eradication and economic
growth
• Barriers to CC mitigation: lack of access to climate-friendly
technologies and investment
• Local environmental concerns and high energy costs lead to:
– attention to energy security and efficiency;
– interest in approaches that have local co-benefits.
Action on mitigation
• Mitigation in longer-term global framework is necessary to slow
the growth of global emissions: declining path after 2020
• Global emissions cuts of more than 50% by 2050 are needed
• Need to stop further growth in emissions in the coming 15 years
• It requires major restructuring of energy systems
Mitigation: Key elements
 Industrialized countries should continue to take the lead
 Further action by developing countries to limit the growth of
their emissions is required
– $20 trillion to be invested in energy-supply infrastructure by
2030, with half in developing countries (IEA)
– Challenge: to green energy investment
 Incentives have to be provided for further action in developing
countries, including through technology cooperation and access
to green investment
Funding and Investment needs in the energy sector
Investment in Energy Supply Infrastructure
(2005,Million US$)
Funding Sources
Flows
% Contribution to
the total
investment need
Bilateral Development Assistance
World Bank Group
EBRD
GEF
Asian Development Bank
Inter-American Development Bank
Total ( Bilateral + multilateral)
2132
2845
773
124
677
306
6806
0.27%
0.37%
0.10%
0.02%
0.09%
0.04%
0.88%
Total investment in ESI in 2005 *
776615
World bank Funding in Energy Sector
( 2005, Million US$)
Sector
Coal
Oil & Gas
Power
TOTAL
World Bank
234.00
562.00
2049.00
2845.00
Investment Need*
21653.85
315038.46
433692.31
770384.62
% Contribution
to the total
investment need
1.08%
0.18%
0.47%
0.37%
Public funding for energy supply infrastructure
accounts to about 1% of the investment needs.
 Public action must target private sector to leverage private
funding.
Challenge for post-2012 regime
… is to construct agreement that:
• Does not include hard emission reduction targets for developing
countries
• Provides incentives to developing countries to limit their emissions
growth
• Provides for a cleaner development path than business as usual
• Addresses competitiveness concerns
Political conditions for the future climate change regime
+
Investment opportunities
in developing countries
I
II
Reduced economic
growth
+
IV
III
Subsidization
Meaningful action by
developing countries
Key elements: Adaptation
• Move from damage prevention to damage minimization
• Efforts towards the MDGs frustrated by climate impacts
• Adaptation will be essential component of future agreement
Challenge: how to generate additional resource flows to
finance adaptation projects.
Technology
• Provides means for mitigation efforts and for adaptation
• Innovation and deployment of new technologies will be
largely driven by business in industrialized countries
Challenge is to put in place policy incentives for:
 diffusion of existing climate-friendly
technologies
 development of break-through technologies
 enhanced international technology cooperation
Role for market-based approach?
• Allows business to look for cheapest emission reductions globally
• Bridges the key components of climate change policy:
o Lowers the costs for industrialized countries of complying with
commitments
o Allows for attracting green technologies and investments to
developing countries, incentivizing further mitigation action
o Levies on transfers in the carbon market generate funding for
adaptation
Imperatives for post-2012 agreement
• North-North equity (in commitments)
• North-South equity
– in respecting responsibilities and capabilities
– in respecting economic growth
– providing appropriate incentives for developing
countries
• Addressing competitiveness concerns
Momentum is building up
Encouraging signals from the North:
• Agreement in the G8: -50% in 2050 and the need to act within a
multilateral UN forum
• EU: -20% emission reduction by 2020 compared to 1990 – to be
increased to 30% if other developed countries join
• Norway: -30% by 2020; by 2050 reduce 100% of emissions
• Japan: Cool Earth 50 proposal
• USA: California and other states; bills in the Senate/Congress (cap
and trade)
Action in the South:
• China: reduction in emission intensity of GDP; renewable energy
• India: national climate change plan, car emission standards
Challenge for the leaders
• Urgency to act now: cost of delay are high
• National action requires a global framework setting a longterm perspective
• An agreement for post-2012 is needed by 2009
• A new agreement will take about two years to negotiate and
two more years for countries to ratify
• Work has to start this year
• COP 13 in Bali in December: opportunity to act
Potential principles for post-2012 regime
1. Addressing climate change requires a long-term global response in line
with latest scientific findings and compatible with long-term investment
planning strategies of the business;
2. Industrialized countries must continue to take the lead and reduce their
emissions substantially given their historic responsibility and economic
capabilities;
3. The problem cannot be solved without further engagement of developing
countries;
4. But this requires incentives for developing countries to limit their
emissions and assistance to adapt to the impacts of climate change while
safeguarding socio-economic growth and poverty eradication, and for this;
5. Full flexibility in the carbon market should be allowed, to ensure the
most cost-effective implementation and to mobilize the resources needed to
provide the incentives to developing countries.