Deficit Finance for Climate Fund?

Deficit Finance for Climate Fund?
(Madan Menon Thottasseri)

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The Sudanese diplomat Di Aping , Chairing G 77 backed an innovative idea proposed by the American billionaire George Soros and financier for industrialised nations to free up unused Special Drawing Rights (SDRs) - foreign exchange reserves issued by the International Monetary Fund to held poorer countries to cope with global warming.

The billionaire remarked that the $10 billion a year proposed by rich nations to help the poor adapt to climate change is not sufficient and the gap between what’s offered and what’s needed could wreck the Copenhagen climate conference.

Soros, himself worth an estimated $11 billion, wants to create a $100 billion fund to invest in and finance re-forestation and agriculture projects and says it could help break a financing blockage in Copenhagen negotiations - although he doubted that the United States would want to get involved.

Picking up on the idea, Mr Di Aping immediately doubled it to $200 billion and said that the question should be asked of the US Congress: "You approve billions of dollars in defence budgets: why can't you approve $200 billion to save the world?"

The investor-philanthropist Sores, one in a line of international notables visiting the 192-nation meeting, told reporters he had developed a partial solution suggested shifting of some International Monetary Fund resources from providing liquidity to stressed global financial system to a new mission of financing projects in developing countries for clean energy and adapting to climate change.

But he acknowledged a roadblock in Washington. According to him it is possible to substantially increase the amount available to fight global warming in the developing world. There lacking of political will. Unfortunately it is difficult to gather the Political will because of the mere fact that it requires congressional approval in the United States. Obama administration officials are aware of the hassles of getting congressional approval .The international financier dropped in on the two-week conference on its fourth day, as rich and poor nations pressed on behind closed doors and in open forums to bridge wide differences and reach agreements on how to combat global warming.

Just a weeks time to fine tune deliberations and arrive at consensus on all issues for nations to sign in the finale of the Copenhagen climate summit on Dec. 18.

The US refusal to ratify the Kyoto Protocol, which obliged developed nations to cut CO2 emissions by 5 per cent on 1990 levels by 2012, the Copenhagen conference has twin-track negotiations on reaching a fresh successor accord to Kyoto and a separate pact to which the United States would also sign up. Delegates from developed and emerging economies are against sticking with the Kyoto Protocol if the United States is not involved and the summit should focus its attention on an entirely new treaty.

Developing nations would resist such a proposal and reacted angrily to a "Danish text" which effectively took such a line. No choice so as to receive the vast sums for mitigating the effects of global warming. The EU's chief climate negotiator, Anders Turesson, complained today that the slow pace in the formal plenary session of the conference was preventing progress elsewhere, including in the negotiating track with the Americans are most closely involved.

The plenary session has been tied up over calls from developing nations for a much more ambitious target on limiting global warming.

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