Presenting the proposal in Brussels, EU Environment Commissioner Stavros Dimas made clear that the bulk of funding for developing countries will need to come from the private sector and the carbon market.
"No money, no deal," said Dimas, adding that the Commission is well aware that the chances of reaching a global deal will largely depend on the countries' "common but differentiated responsibilities" to combat climate change.
According to the EU executive, action by the developed economies of the OECD will not suffice on its own, because emissions in the developing world are growing rapidly and threaten to outweigh their efforts.
The EU is therefore proposing that developing countries - including China and India but with the exception of Africa's least-developed countries - should slow their emission growth by 15-30% below business-as-usual levels by 2020.
Dimas is proposing that developing countries adopt far-reaching low carbon strategies, using domestic resources and regulation, which can mobilise and shift private sector investment towards cleaner technologies. Public funding will be provided by the international community to cover investments that cannot be financed with domestic resources, explains the Commission.
Towards an OECD-wide carbon market?
According to the Commission, developed countries must continue to take the lead and cut emissions by 30% to 1990 levels by 2020. With Australia and New Zealand adopting cap-and-trade systems and the US poised to design a similar domestic scheme, the EU is proposing to build an OECD-wide carbon market. Over time, the system could be expanded to developing countries. "We should go ahead with an agreement whether or not the US has a cap-and-trade in place by Copenhagen," said Dimas.