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FUNDING SCHEME FOR THE BALI ACTION PLAN

This proposal outlines a funding scheme to finance climate adaptation measures globally, emphasizing the taxation of CO2 emissions and establishment of national and multilateral funds. It aims to address the uneven distribution of adaptation capacity across nations and ensure financial support for vulnerable countries. Implementation involves levy collection by individual countries and private sector involvement. Key questions revolve around integrating the scheme into negotiations, garnering support, and allocating funds effectively.

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FUNDING SCHEME FOR THE BALI ACTION PLAN

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  1. FUNDING SCHEME FOR THE BALI ACTION PLAN A Swiss proposal for global solidarity in financing Adaptation • PLAN OF THE PRESENTATION • SITUATION • OBJECTIVES AND PRINCIPLES • FUNDING SCHEME • IMPLEMENTATION AND GOVERNANCE • ADDITIONAL WORK

  2. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • SITUATION Climate change (CC) consequences already visible (AR4) Adaptation to the adverse effects of CC taking place now must be addressed Financing Adaptation will require USD 10-40 bn per year (WB) Adaptation Fund expected to provide USD 300-450 million until 2012 Adaptation capacity unevenly distributed across and within countries A FUNDING SCHEME IS PROPOSED

  3. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • OBJECTIVES AND PRINCIPLES To levy the necessary funding for Adaptation by taxing CO2 emissions To tax emissions in all the countries above a « basic need oriented threshold » To establish a National CC Fund (NCCF) in each country To establish a Multilateral Adaptation Fund (MAF) Principle of common but differentiated responsibilites Polluter pays principle Principle of subsidiarity

  4. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • FUNDING SCHEME This scheme is an illustration of one possibility of the concept : Tax rate : USD 2 per ton of CO2 emissions Threshold : yearly emissions up to 1.5 ton of CO2eq per capita The higher the income per capita, the higher the share of revenues to the MAF The lower the income per capita, the higher the share of revenues to the NCCF MAF to have a risk prevention pillar and a risk insurance pillar MAF funds to be distributed to medium and low income countries

  5. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • NATIONAL CLIMATE CHANGE FUNDS (NCCF) Each country will autonomously operate its own NCCF NCCF ressources are allocated according to the priorities set by the country Disaster risk reduction programmes under NCCF can be co-financed by MAF

  6. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • MAF – PREVENTION PILLAR Objective: provide incentives and support for the integration of Adaptation policies as an integral part of national and sectoral plans. • MAF – INSURANCE PILLAR Objective: preserving/restoring public goods in case of severe weather events related to climate change.

  7. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • IMPLEMENTATION AND GOVERNANCE Collection of the levy defined by each country, building on its taxation system Scheme reduces the risk of moral hazard (prevention and insurance linked) Allow countries to prepare legislation and fiscal reforms Involve actors from the private sector (insurance pillar especially)

  8. FUNDING SCHEME FOR THE BALI ACTION PLAN • A Swiss proposal for global solidarity in financing Adaptation • ADDITIONAL WORK How to best integrate the proposed scheme into the negociation process ? How to attract sufficient support to justify a comprehensive assessment ? How to allocate the MAF ressources to the beneficiaries (indicators) ? ...

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