Speech by Phil Woolas MP to the United Nations Environment Programme in Monaco - 22 February 2008
Thank you to my colleague Fernando Tudela. Thanks to the COP13, Bali and this Global Ministerial Environment Forum. They have provided the basis for this report back on much bolder examination of what is needed to provide the funding now for transformational investments that not only directly reduce carbon emissions but also accelerate new technologies, drive down costs, introduce policy changes, and demonstrate to our populations and governments that ‘low carbon’ and Andrea said this morning is not incompatible with high growth.
There is a need of course a need to fully mobilize international mechanisms as well as engaging both the public and private sector in order to address the challenges of climate change.
And much of our focus has been on the need to mobilize financial flows at the level of international framework and mechanisms. But these alone of course colleagues don’t offer the solution. The global financing debate for adaptation and mitigation needs to be strongly linked to national policy frameworks. The last two days Mr President have provided an excellent opportunity to deal with these in parallel.
We have attempted to summarize the key points from the Ministerial Roundtable today and yesterday. And we would of course welcome contributions from those in the round table on any points you feel we’ve not captured in this summary:
It was recognized that there have been positive developments in terms of significantly increasing investment into clean energy technology and rapid expansion of the carbon market, especially the CDM but at the same time it is evident that the markets are not yet able to mobilize the necessary resources to meet the challenge.
The Carbon Market clearly offers huge potential for mobilizing mitigation financing, but so far it was felt that this has only benefited industrialized counties and a relatively small number of the larger developing countries. It is also recognized that the carbon market alone does not offer the solution and that technological innovation and transfer outside of the carbon market need to be part of any solution.
Conducive policy and institutional frameworks are key to stimulating private sector investment both from national and international private entities and this includes having strong and stable institutions, correct incentives including conducive, long term and stable policies, effective regulatory frameworks, taxation – whether punitive or incentivizing – and correct market signals, including from for example public procurement. We also of course must have a robust carbon price.
While some countries may be able to create these conditions on their own the large part of developing countries will require dedicated support in the form of capacity building and technical assistance to public policy development and engaging the local private sector in carbon market activities. UNEP and other UN institutions can and do play a crucial role in this regard - provided the necessary funding is made available. Now it is important we felt in this process to recognize that there is no one-size-fits-all approach and support needs to be tailored to the specific national circumstances to be effective. For example Small Island Developing States and for example many Least Developed Countries do not have private companies that are large enough to contribute to large scale financing and therefore appropriate models need to be developed, which enable SME engagement in climate and clean energy development.
Now our discussion also showed that while this is a necessary first step for larger groups of countries to benefit from clean energy and carbon finance there is also a need to look at the architecture of the carbon market and CDM in order to ensure it more amenable to the conditions in most developing countries. This need not affect the successful market parts but could add other elements that would strengthen the focus on the local development benefits. And the importance of action at the local authority level and the role of civil society would here play a crucial role in ensuring that future benefits are in line with national development aims and distribute in more equitable ways.
In the area of adaptation is was evident that many countries are still in the process of examining key national vulnerabilities and identifying priority actions, so experience with adaptation finance is quite limited in our group. At the same time it was the consensus that it is crucial to make the adaptation fund operational - urgently. It was also emphasized that the proceeds from CDM do represent an important start for the Fund, but in order to meet the anticipated challenge there is an immediate need for industralised countries to make additional funds available.
The last two days have further stimulated important discussion on financing and climate change. We have a busy time ahead of us in reaching agreement on a post-2012 framework in Copenhagen. The financing element of this will be critical and I very much hope that our deliberations here can feed into the ongoing UNFCCC discussions and that of our Financing Ministers that has already been mentioned and help us reach the agreement that is so urgently needed. So that is the main summary and I hope that they help the debate.
Page published: 26 February 2008