by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Trading Carbon : December - January 2011
That is not to say that governments and public funding are not necessary, they clearly are. The public sector must provide clear r ules and regulations, remove some of the risk to further entice private investment and be actively engaged in promoting innovation and finding ways to reduce entrance barriers and facilitate the leveraging of private funding. Q: What should be done to encourage the private sector to continue to be involved in activities that aim to tackle climate change? MW: The private sector will always engage to some degree in markets where opportunities can be seen. However, historically low carbon prices and the uncertainty around climate policy has decimated a significant amount of the investor appetite. Going forward, there needs to be clear and coherent policy at the domestic and international level. This policy needs to be long, loud and legal, and not subject to change and needs to create a market and drive demand for carbon and low-emissions goods. The future of the CDM must be clarified. There needs to be a real and effective co-ordination to have private and public funds work together and deliver outcomes. And, with respect to REDD, not only is global policy certainty required, but both MRV approaches and domestic systems of land and carbon tenure, benefit sharing and governance must be resolved. PD: A sound price of carbon and a reasonable assurance that its value will increase in the long term are essential to attract investors. So it is cr ucial to develop credit demand in the long term, not only from the EU but also from other national or regional cap- and-trade schemes. Shared and transparent MRV r ules would also help and increase confidence in the reality of emissions abatement. JH: Quite frankly, it's in the financial self interest of the S05 DURBAN ROUNDTABLE the $100 billion will have to come from mobilising private sources of finance. That's one reason why making progress on the UN agreement's market mechanisms, and sending a positive signal to the carbon markets, is so important. GP: Totally unrealistic. The only reason the developing countries want the money to come from public sources is so that they can exert control over the money and feed it through incredibly inefficient bureaucratic procedures, where much of the money is siphoned off along the way. Clearly there is a need for some public money to create frameworks to manage the process, build infrastr ucture etc, but the private sector will be more efficient at implementing projects and programmes and this will bring many benefits to the host countries. MW: The real challenge is not necessarily raising the funds, but actual effective deployment of the funds and ensuring that they neither compete nor fund the same programmes and outcomes. At present, we are seeing multiple developed country aid agencies funding the same capacity building programmes without any consideration to work already undertaken. BL: Wouldn't it be more efficient to strengthen the private sector's commitment by creating a sec ured framework for their investment? Existing project mechanisms, as long as they are improved and strengthened, are the basis for this framework. LA: How "fast-start finance" has been mobilised and distributed to date indicates how ironically "slow" such finance has been and how it has actually already "ended" before it's even "started"-- being recycled from ODA (Official Development Assistance) mostly. Even more than the question of $100 billion per year by 2020, where the money will come from after 2020 is another huge question mark. FL: Fortunately, there is a real interest in the private sector to get involved in these issues with or without direct government involvement. In Costa Rica, efforts are being led by Mercado de Valores de Costa Rica, a major private financial group, and the Asociacion Empresarial para el Desarrollo, a non-profit commerce association. Most businesses recognise the importance of the (climate change) issue and the consequences of failure. Smart businesses also recognise the huge opportunities open to those willing to lead. Dec 2011/Jan 2012 It's in the financial self-interest of the private sector to prepare for a low-carbon future Jennifer Haverkamp, Environmental Defense Fund