Posted by Daniel Hall on December 7, 2007
Peter Spotts has a good article in today’s Christian Science Monitor that talks about the push in Bali to incorporate more funding for adaptation into the next global climate change agreement:
High in the Himalayas, Bhutan is scrambling to fend off the onrushing effects of climate change. Two dozen lakes swollen by glacial melting are in danger of bursting their earthen dams and sweeping through the mountain kingdom like an inland tsunami. …
To reduce the risk, the government has set up a flood-adaptation project, splitting the $6.9 million cost with the Global Environment Facility (GEF), which oversees two funds to help developing countries cope with global warming.
The country’s vulnerability – and the effort it’s making to reduce it – highlights one of the hot-button issues at UN-sponsored climate talks here in Bali: The burgeoning need to help developing countries adapt to global warming. Despite mechanisms such as the GEF, demand for adaptation assistance far outstrips the cash on hand to supply it. …
Currently, adaptation money comes from two global funds that rely on voluntary donations from wealthy nations, but falls far short of what is needed. Rich nations have pledged a combined $220.4 million, but as of September had delivered only $116.6 million – a “pathetic” amount, says Ms. Raworth, who puts the immediate needs among the poorest nations at $1 billion to $2 billion a year.
This sounds like a lot of money but is actually not that large when you think about the potential size of a global carbon market. For example, the article points out that the Lieberman-Warner bill now before the Senate would provide about this level of adaptation funding:
The US Senate took a step in that direction Wednesday, when the Environment and Public Works Committee finished its work on the Lieberman-Warner Act. In addition to setting up CO2 emissions targets and a carbon-trading system to help meet them, the bill would earmark $1 billion a year to help poor countries adapt to global warming. The money would come from government auctions of greenhouse-gas emission permits.
How much of the total permit market would $1 billion be? Well, U.S. CO2 emissions are around 6 billion metric tons per year. If permit prices were around $20 per metric ton — a not unreasonable guess based on modeling work of other similar bills by the EIA — and all permits were auctioned the government would raise more than $100 billion a year. I think the bill actually auctions around one-quarter of permits initially, so this might be more like $25 or $30 billion a year early on in the program. Either way, there is certainly a ready and sufficient source for adaption funding; the question then is whether wealthy countries are truly willing to write the checks.