Debating climate finance in Tianjin
IATP President Jim Harkness and Senior Program Officer Shefali Sharma are in Tianjin, China this week monitoring the ongoing global climate talks that will serve as the final prelude to COP16 in Cancún later this year.
In a side event held today, entitled “Carbon markets: A reliable and practical source of climate finance?” IATP hosted a panel to discuss public finance mechanisms, market and environmental integrity in carbon trading, and consequences for sustainable agriculture. A press conference will be held on Thursday.
IATP's Senior Policy Analyst Steve Suppan has also written a new paper addressing the U.N. Secretary-General's High-Level Advisory Group on Climate Finance (AGF), entitled "Trusting in Dark (Carbon) Markets?" Read the press release below:
Climate finance can’t afford carbon marketsInfluence of market speculators too risky for the future of the planet
TIANJIN, CHINA – A high-level advisory group to the United Nations will outline its draft proposals this week for financing efforts to combat global climate change. Carbon emissions markets are expected to be central in their recommendations. But carbon market prices would likely be too volatile to provide a reliable source of finance, and other options should be considered, according to a new analysis released today by the U.S.-based Institute for Agriculture and Trade Policy (IATP).
The United Nations Secretary-General’s High-level Advisory Group on Climate Finance (AGF) will present key elements of a draft report on October 7 at the U.N. global climate talks in Tianjin. The AGF will present a final report in Cancun, Mexico at the next Conference of the Parties (COP 16) meeting in early December.
The IATP paper, “Trusting in Dark (Carbon) Markets” by Steve Suppan, warns that carbon markets are vulnerable to excessive speculation by big financial firms. Those same firms wreaked havoc on agriculture markets in 2007-08, contributing to a sharp rise in global food prices and an increase in global hunger.
“The big financial players are lobbying governments to scale up the trading of carbon,” said Suppan. “But there is no independent evidence to show that carbon market price signals spur industry to make long-term investments in greenhouse gas–reducing technology. These big players are also lobbying for regulatory exemptions that would promote the carbon price volatility that delays or even drives away these investments.”
IATP President Jim Harkness and Senior Program Officer Shefali Sharma are in Tianjin to monitor the U.N. climate negotiations. IATP co-hosted an October 5 side event in Tianjin on climate finance proposals.
“Agriculture, particularly in developing countries, is the sector most vulnerable to the effects of climate change and badly needs transparent and predictable climate finance,” said Harkness. “A transition toward more sustainable practices will make agriculture, and livelihoods dependent on it, more resilient to climate change, reduce greenhouse gas emissions and strengthen global food security. We need to consider alternative climate finance proposals to make this happen.”
IATP has authored a series of papers on climate change, including “Speculating on Carbon,” “The New Climate Debt” and “Climate and Agriculture: A Just Response,” among others. For more, go to IATP’s climate and agriculture website.
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