Britain has attempted to supply an answer to a key question exercising all the participants at the Copenhagen climate conference: who will hold the purse-strings for the new Climate Fund?
The Fund will be a truly colossal pot of finance likely to be established by the meeting, out of which huge new sums of aid will be distributed to developing countries to help them counteract global warming.
Gordon Brown has already proposed that the fund should be disbursing $100bn a year by 2020, and the European Union finessed this proposal several weeks ago. The EU's suggestion is that it should be giving out €100bn by that date, half of it to come from public finance – meaning taxpayers' money from national treasuries – and half from the sale of carbon credits. The EU might eventually be paying about €12bn of this amount, with the UK paying perhaps €2bn.
But although the sums involved are a vital point – the developing countries are looking for about $400bn per annum, a wish unlikely to be fulfilled – the problem is how the money will be managed once it is available. Donor countries, largely the rich industrialised nations, want to have as much control over it as possible, and developing countries want direct access to the money, but these two aims are not necessarily compatible.
Yesterday, the British Government published a paper on the governance of the fund, suggesting a compromise that would bridge the gap between the two approaches. Under the British proposals, put forward jointly with Norway, Australia and Mexico, the fund would be run by a special board accountable to the annual climate conferences which – like Copenhagen – are held under the auspices of the UN's Framework Convention on Climate Change. There would be equal representation on the board from developed and developing countries.
In another development, the chief American negotiator at the conference, Todd Stern, said last night that the US would not fund China to help it cut its CO2 emissions. China was wealthy enough to fund its own efforts, he said, adding: "We would intend to direct public funds to the neediest countries."