Authors: World Bank Group, in close partnership with the IMF, the OECD and the RDBs.

Date: October 6, 2011

(Full paper available here) 

What is it about? The report was prepared ahead of the G20 summit in Cannes, in 2011 - upon a request by G20 finance Ministers. It builds upon Ban Ki Moon’s high-level panel “AGF report”, published in 2010, on potential new sources of climate finance. The report namely looks at sources of finance that could also contribute to reduce global C02 emissions. Among the sources of climate finance identified, the report highlights the following:

1. by redirecting 20% of wasteful fossil fuel subsidies in annex II countries could raise around 10 billion dollars a year.
2. Carbon pricing policies in annex II countries could raise 250 billion dollars per year by 2020 (with a carbon price of 25 USD/ton CO2) and reduce emissions by 10% compared to 2020 projections. Redirecting 10% of it to climate finance could raise 25 billion USD per year.
3. Market-based instruments in international transport could raise 40 billion USD per year by 2020 and reduce emissions by 5%. After compensation of impacts on developing countries, 22 billion dollars per year could be allocated to climate finance.
4. Offset markets – depending on the level of mitigation ambition in countries – could raise 5 to 40 billion dollars each year by 2020.
5. Private flows of finance. The report estimates that the package of instruments identified above could leverage an additional 100-200 billion USD of international climate private finance and another 100-200 billion USD of private climate finance at domestic level.

Why we recommend this? The report can help inform negotiations under the UNFCCC on how to scale-up the mobilisation of public funds (incl. from innovative source) in the context of the 100 billion dollar commitment by 2020, partially also to trigger additional substantial private finance investments. It is particularly relevant to discussions under the ADP on pre-2020 ambition as most of the instruments proposed in the report help reduce GHG emissions as well as provide options to fund ambitious mitigation action in both developed and developing countries.