EU says advanced developing countries have ample financial resources, refuses to provide climate change funds

  • Published on September 12th, 2009

The European Union has proposed a climate change funding of €2-15 billion every year for developing countries to help them make transition from fossil fuel based energy systems to clean energy based systems. However, EU does not see the advanced developing counties like India and China eligible for this financial help.


EU in its Global Finance Blueprint for Ambitious Action by Developing Nations paper stated that advanced developing countries should contribute to the climate adaptation fund instead of expecting funds for themselves. According to the paper, advanced developing countries posses ample financial resources to initiate and sustain emission reduction programs.

The Commission said that from 2013, it would depend on the carbon market to fund 40% of the money required for climate change mitigation and adaptation in developing nations. The emerging economies should be able to generate 20-40% of the proposed global fund, it said. The remaining—around $22-50 billion a year—will be paid for by the European Union and the rest of the developed nations.

Developing countries have been at loggerheads with the developed countries on the issue of funding for adaptation to clean fuel technologies. Decision to set up an adaptation fund for helping poor and developing countries was taken at the Bali climate conference in 2007. However, the developed countries are yet to act on their promises of aid as they find themselves constrained by the global economic crisis and objections by their own people.

The financial aspect pertaining to the next climate treaty is a crucial one. Advanced developing countries like India have stated their intentions not to agree to any mandatory emission reduction targets and by pulling the funding away the developed nations will be jeopardizing any chance to build a consensus on the next climate treaty. India enjoys the backing of a World Bank report which notes that mandatory emission reduction targets could potentially hamper India’s efforts to eradicate poverty.

The International Panel on Climate Change has recommended in one of its reports that the world needs to bring down its carbon emissions by 25-40 percent by 2020 from 1990 levels. Now, the European Union already has a 20 percent emission reduction set and is willing to extend that target to 30 percent if other countries agree to a 20 percent reduction goal. Other developed countries like United States, Japan and Australia have already made it clear that developing countries need to be part of the global effort to tackle rising carbon emissions.

Without international funding and solution to the intellectual rights issue related to the clean fuel technologies it is hard to see the developing countries agreeing to any emission reduction goals. And without a broad participation the next climate treaty could face the same fate as the Kyoto Protocol. Instead of putting forward targets for self funding the developed countries should allow the developing countries to prepare their own plans of action wherein they would work to reduce their industrial emissions and improve energy efficiency with some financial and technical help from the developed countries.

There is no doubt that all countries must come together and contribute as per their capacities to the fight against climate change. The developed countries must provide help to the developing countries but there should be accountability attached too. The funding must result in at least freezing of the growth of carbon emissions if not reduction by 2020. The developing countries, on the other hand, must look to create a better investment environment in order to encourage expansion of renewable energy infrastructure.

Asking the developing countries to set emission reduction goals could hamper the climate treaty negotiations, the solution to the problem is in finding a middle path so that the developing countries too become an active party to the climate treaty while having the rights and opportunities to grow and improve the living standards of their citizens.

Image: rockcohen (Creative Commons)

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.

About the Author

currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.