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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.