Climate finance of $150bn needed to limit climate change

Pledges made by Europe, China and US to cut carbon emissions and move to more sustainable energy sources are and an “important step forward” but a more comprehensive effort is needed to prevent catastrophic climate change, according to the Potsdam Institute for Climate Impact Research.

A study from the institute argues that climate finance can cover investment gaps and alleviate distributional tensions. In order to keep global warming below the internationally agreed 2C threshold, the research found that financial support of $100-150 billion (£64-96bn) is needed each year by 2030 could achieve efficiency and cover the total investment in low carbon technologies needed in developing countries to meet the target.

Additionally, the money from fiscal revenues from instruments such as carbon taxes could also be used to cover clean energy investment gaps, it adds.

“The pledges made so far lead to earlier emission peaking in many countries, with 1-1.5 degree Celsius less total warming than without these policies, bit not sufficient to meet the 2 degree Celsius target,” explained Massimo Tavoni, who coordinated the project.

“Reducing emissions while limiting costs requires a significant contribution from developing countries. This could create unfair distribution of costs. Compensatory measures could address these.”

The research comes as world leaders have concluded UN climate talks in Lima, Peru, with a draft proposal for an agreement. Next year in Paris it is hoped that a new universal treaty on climate change will be adopted. However, the latest study highlights the challenges still ahead.

Elmar Kriegler, senior scientists at the Potsdam Institute for Climate Impact Research and co-leader of the study, commented, “In our 2 degree scenarios, global emissions peak at around 2020. This is in clear contrast to our other scenarios projecting forward the pledges currently discussed by major economies. They lead to a peaking of global emissions around or after 2040.”

He continued, “A large part of the emission reductions, if to be realised at lowest cost, would come from emerging economies such as China or India. The implication is clear. Id a future climate agreement aims to tap into these abatement potentials, it would likely need to include mechanisms to compensate developing countries for part of their abatement effort.”

Photo: odonata98 via Flickr 

Further reading:

France pledges $1bn to Green Climate Fund

Climate adaption budgets could reverse poverty progress

UN climate summit: wealthy nations urged to donate to Green Climate Fund

COP19: China urges progress on 2020 climate finance targets

UN Green Climate Fund ready to mobilise finance