Rethinking Bretton Woods | Mon, Jun 13, 2011
A new report by CIDSE "The FTT for People and the Planet: Financing Climate Justice," has been released.
More than a decade after the Millennium Declaration and the officially agreed Millennium Development Goals (MDGs), the world should have looked profoundly better for at least half of the women, men and children in the world living in extreme poverty. Unfortunately, a fatal combination of the lack of political commitment, a global economic downturn and, most crucially, climate change has endangered whatever little progress has been made to secure even the minimalist MDGs by 2015.
Recognising that climate change is not only an environmental injustice, but also a humanitarian and development emergency of global proportions, governments have sought ways to mitigate and adapt to the impact of climate change for over a decade. Finance, or rather the lack of it, has proven to be one of the tumbling blocks in these negotiations.
Nevertheless, the single biggest outcome of the December 2010 climate negotiations in Cancun was the creation of a new Green Climate Fund. The Fund is to receive and distribute up to US$100 billion a year from 2020. However, an estimate from the World Bank puts costs for adaption in the range of US$ 75-100 billion per year alone. NGOs point out that more than US$200 billion per year in public finance, new and additional to existing development aid targets, are needed to adequately finance adaptation and mitigation needs.
In the midst of an economic downturn in many OECD countries, the burning question is where this money will come from. Many see private finance as the only alternative. When fully transparent and properly regulated, private finance can indeed contribute to serving this need but its final objective remains maximising profit and not the common good. From a justice and development perspective there is an indisputable need for public money, which must be invested to serve the common good and hence pay a significant part of the climate change bill.