Ministers recognised the importance of both bilateral and multilateral funding for climate change, and debated two funding options: revenue raised through the auctioning of emission permits and an annual financial commitment to allocate money according to country-based emissions and economic strength assessments.
Nevertheless, commitments to concrete figures remained elusive and the matter was forwarded to economic and finance ministers. Decisions are not expected until the EU summit on 19-20 March.
Instead, the Environment Council fully endorsed a call by the European Commission for developing countries to reduce greenhouse gas emissions by 15-30% from their expected 2020 levels by the same date (EurActiv 29/01/09). It asked all developing countries to devise low-carbon development plans by 2012 and economically more advanced ones to develop cap-and-trade systems as soon as possible.
Many member states claim it is too early to sign up to any financial commitments, saying the EU should not lay its cards on the table just yet, government sources said.
"Even climate leaders like Sweden and the UK are seeking to keep any reference to specific numbers and commitments out of the environment ministers' declaration," Tom Sharman, ActionAid's head of climate change, lamented ahead of the Council meeting.
According to the Intergovernmental Panel on Climate Change (IPCC), total investment in climate change will have to reach €175 billion a year by 2020, excluding adaptation measures, if global warming is to be halted before its impact becomes irreversible.
The Commission's proposal endorsed the IPCC's assessment, saying more than half of it would have to go to developing countries, but failed to present any figures for the EU to commit to. The €175 billion figure was criticised by Greenpeace as "irrelevant". It sets no target for the EU as a bloc, but refers to the climate efforts of all nations and includes both public and private funding sources, the group said.
'No money, no deal'
Environment Commissioner Stavros Dimas made clear that financing emissions cuts in developing countries will be a deal-breaker in Copenhagen when he stated that there would be no deal without money. Environmental and development NGOs have been keen to stress this point.
"The question of finance will be a make-or-break issue for the Copenhagen agreement," WWF said in a statement issued ahead of the environment ministers' meeting. It suggested that the proposed 30% emission reduction targets by 2020 - compared to business-as-usual for developing countries - are adequate, but need to be supported by substantial funding from industrialised countries.
The NGO believes Europe should commit €35 billion per year to developing clean technologies and reducing deforestation in developing countries, in addition to the promised 0.7% of GDP for development aid. Moreover, it deplored the Commission's failure to address the potential for energy savings, calling for EU funding for technology development and research to be increased ten-fold by 2020 compared to current levels.
A statement by Greenpeace said EU support for developing countries' efforts is not about charity but a "repayment of historical debt". The organisation urged developed countries, including newly industrialised ones, to commit at least €40 billion annually by 2020 for clean energy in developing countries. A further annual €30 billion will be needed to halt deforestation and at least €40 billion to finance adaptation measures in poor countries, it said.
The Copenhagen agreement should consequently channel at least €110 billion annually by 2020 to assist developing countries, according to Greenpeace. It agreed with WWF that the EU should contribute its "fair share" of about €35 billion.
Oxfam warned the EU against "treating poor people's lives as a bargaining tool," urging governments to put money on the table.
