financing

UN Secretary-General Ban Ki-Moon announced plans today to create a powerful new climate change entity that will help mobilize billions of dollars to help the poorest nations battle climate change.

In December, wealthy countries agreed to provide $30 billion in "fast-start" financing from 2010 to 2012 as part of the Copenhagen Accord, struck in the eleventh hour of the Denmark talks. They also agreed to a goal of ramping up that sum to $100 billion by 2020.

So far, none of the fast cash has been disbursed and country-level pledges remain vague.

As the Copenhagen climate summit approaches, international consensus is building for a short-term financing deal under which wealthy nations would contribute $10 billion a year for the next three years to "kick-start" climate financing for poorer countries.

Today, the White House gave that plan and the summit itself a much-needed shot of adrenaline.

In an official statement, the White House announced that President Obama supports the "kick-start" plan and has decided to shift his appearance at the Copenhagen talks from Dec. 9 to Dec. 18, to be there during the summit's crucial final days.

One year on from the financial meltdown and a few days out from an international climate summit where financing for technology and adaptation will be major issues, the headlines are still full of news about bank bailouts, questionable banking practices and tight lending.

Even if the Copenhagen climate talks end with an eleventh-hour agreement on emissions, there's still the banking problem.

The Climate Group, an international coalition of governments and businesses, has been working for the past year on solutions to both in the form of the Climate Principles, a set of voluntary standards that binds participating banks to sustainable business practices, sustainable lending practices and environmental responsibility.

Technological developments often are seen as the surest way to reduce society’s dependence on fossil fuels, but one young startup hopes to spur change with an innovative business model.

If successful, Metrus Energy's model could usher in a wave of investment in energy efficiency projects.

The idea is to enter into long-term contracts with commercial, industrial, and institutional facilities in which Metrus pays the upfront costs of installing energy efficiency measures, such as high-efficiency lighting or building energy management systems, and then shares the resulting savings from lower energy bills.

“We set the fee below what the customer is currently paying the electric utility,” said Bob Hinkle, chief executive of the San Francisco startup. “So the customer gets savings from the start.”

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• Justin Moresco's blog
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The world’s richest countries have agreed for some time that they must cover the costs of climate mitigation and adaptation for the poorest nations. But as the latest round of UN climate talks ends this week in Bonn, Germany, it is still unclear how industrialized nations will finance these strategies.

Yvo de Boer, head of the UN Climate Change Secretariat, has called the financing issue one of the hardest nuts to crack, and for good reason.

According to an EU report last March, global investment to fight and deal with climate change in the developing world will need to reach about $90 billion per year by 2020.

To date, however, wealthy countries have failed to make good on promises made at the UNFCCC's 2001 Morocco summit to provide the 49 least developed countries (LDCs) $2 billion for immediate adaptation. So far, only $200 million has been contributed and few projects have been implemented as a result.

"The LDCs are demanding that the rich countries pledge up to $2 billion over the next five years in order to fulfill the promise they made eight years ago," said Saleemul Huq, senior fellow in the Climate Change Group at the International Institute for Environment and Development.