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Kepa Solaun , Professor of Economics of Natural Resources at the University of Navarra, partner - director of Factor CO2

Money against climate change

Sun, 26 Jun 2011 14:16:39 +0000 Published in Expansion (Madrid)

I am writing these lines from South Africa, where the Climate Investment Funds Partnership Forum is taking place. For the uninitiated, this is a joint initiative by several multilateral funds to channel a little over $6 billion to help developing countries address climate change development .

This figure is just the beginning. As agreed at the Copenhagen Summit in 2009, the annual contribution of developed countries to the so-called "Green Fund", aimed at addressing the impacts of climate change, starts at 10 billion per year from 2010 and will reach at least 100 billion per year by 2020. In recent years, we have become accustomed to working with such enormous figures that almost nothing scares us anymore. Nevertheless, it is worth taking a few minutes to reflect on what money can and cannot do in this field (and in this world!).

The first thing someone might think, not without reason, is that there is something bitter in this "donation". Weren't we going to tackle greenhouse gas emissions by flying the flag of the Kyoto protocol and managing to avoid their effects? Here is very bad news: regardless of what we do to curb the impact of human activity on global warming, much of the effects of climate change are inevitable and are already happening.

Natural disasters

Natural catastrophes and anthropogenic losses cost society a total of 62 billion dollars in 2009, according to data of the reinsurer Swiss Re. More than half of this economic impact is related to the action of extreme weather events generated by so-called "secondary perils" of climatic impacts: river floods, flash floods, storm surges, hail storms, etc. Approximately 30% of insured damages in the last 30 years have been caused by catastrophes of subject natural catastrophes with a total value of US$ 10 billion.

In this sense, it would seem fairer to speak of "compensation" rather than "donation". The logic behind this contribution is that most of the emissions come (for the time being) from developed countries, while the developing countries development are the ones that will suffer most from the consequences. According to the Climate Risk Index prepared by Germanwatch, the vast majority of the countries most vulnerable to climate change are in fact developing countries development, with Bangladesh, Myanmar, Honduras and Nicaragua standing out.

If the theory sounds good, the practical problem is, however, enormous. It is a matter of putting instruments in place to urgently seek utility for an amount that in 2020 will have a magnitude equivalent to the current global contribution to the Official financial aid at development. In other words, it is necessary to find instruments, interlocutors and channels, identify and define projects and, above all, finance them. All this must be done in record time.

The only realistic way forward is through rapid private sector intervention. Investments must be made in areas as diverse as infrastructure, energy, preventive medicine and Building. We may have to get used to hearing that money for poor countries stays with companies in rich countries. The alternative, a disinterested, non-earmarked donation that leaves it up to each government to allocate the funds to management , seems, regardless of whoever it may concern, much less effective.

We should not, therefore, be scandalized by talk of climate change as a business opportunity for certain sectors. Especially in a country like Spain, with a business fabric that is highly prepared in areas such as energy, distribution networks, infrastructure, construction and tourism.

order This week, the United Nations Environment Program (UNEP) published a web site report in which it called on the private sector to become more involved in the fight against climate change and pointed out that this field will provide an opportunity for business growth. Combating global warming is not only vital for the planet, but can also be vital for business. Given the state of affairs, perhaps they can make a virtue out of necessity.