Who pays for climate fund still up in the air

The formal approval of the Green Climate Fund (GCF) was a critical outcome of the UN climate change conference in Durban, according to Deutsche Bank Climate Change Advisors, but the lack of funding for the GCF remains a concern.

The GCF was originally put forward at the Copenhagen summit in December 2009 and was formally approved at the recent Durban meeting. It is a new mechanism to facilitate public and private financing of low carbon development and will be overseen by the United Nations.

However the Durban meeting did not address the critical point of how the facility would be funded, DBCCA points out in a paper titled, Durban Platform: Laying New Foundations.

“There was no mention of how the money – $100 billion a year by 2020 – will be raised for the GCF.

“It is however known that the fund may receive financial inputs from a variety of public, private and alternative sources.”

Mark Fulton, global head of climate change investment research and strategy with DBCCA in New York, says one of the key takeaways of the Durban talks was the acceptance of emerging and developing nations to the principle of greenhouse gas emission limits.

Sponsored Content

DBCCA says the commitment by developing nations at Durban is a big win for the US and other countries that argued developing economies should play an equal role in any climate mitigation action.

“There is now an irreversible shifting of geopolitical interests. The package shows that countries have not walked away from the climate change problem and global coordination to regulate carbon emissions remains intact. It also gives the EU more impetus to push for 30 per cent emission reduction target by 2020 compared to its current 20 per cent target.”

DBCCA says the critical policy milestone will be the US elections in November 2012, the result of which could help determine whether the US will change its historical course and adopt legally binding emission cuts in 2015.

Leave a Comment

Sort content by

The benefits of US regulatory reform

US regulatory reform, such as the SEC’s plan to restore the uptick rule and the Volcker rule to restrict proprietary trading, are a step in the right direction for those advocating transparency. Amanda White explores the story with the chief executive of Principal Global Investors, Jim McCaughan, and head of research, analysis and strategy at

CalPERS considers new asset class classification

CalPERS is considering doing away with traditional asset class classifications in favour of classifying assets according to fundamental characteristics in a bid to provide a better understanding of portfolio risks and performance drivers and so move to a more effective portfolio construction and risk management framework. Amanda White reports. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Risk parity becomes bittersweet flavour of the month (2)

  “Understanding a program’s results involves attributing relative performance to active management, identifying any tactical asset allocation decisions and assessing mechanical factors such as leverage costs. “For most investors implementation of a leveraged strategy would likely require the retention of a beta overlay manager to execute and maintain the desired leveraged systematic exposures or an

Selective opportunities in private markets: Wurts

Private market investors should focus on distressed debt and to a lesser extent secondaries, according to the annual private equity outlook by consultant Wurts Associates, which contrary to other industry observers believes value can be added through top down analysis of the sector. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Strategic implications drive climate change study

The 14 institutional investors participating in the climate change strategic asset allocation study, a collaborative between Mercer, Carbon Trust and the IFC, will all receive individual portfolio scenario analysis of how physical and policy climate change-related events could affect their portfolio at an asset allocation level. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

CalPERS sharpens risk, liability tools

After watching the simultaneous declines of its market value and funded status during the financial crisis, the $204.8 billion CalPERS will conduct a full review of the methodologies underpinning its asset liability management (ALM) process. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Previous