UN 'puts a price on carbon'

SOUTH Africa should be eligible to receive between $1billion (about R7billion) and $2billion in international climate finance annually by 2020, assuming commitments to mobilise at least $100billion (about R708billion) by 2020 are met, Minister in the Presidency Trevor Manuel says.

Opening the WWF South Africa's symposium on "Embracing Opportunity - Innovative finance for a low carbon economy" last week, Manuel said the one issue on which clear consensus emerged in the United Nations Advisory Group on Finance, is to "put a price on carbon", or greenhouse gas emissions.

Manuel last year served as co-chair of the United Nations Advisory Group on Finance.

Observing that South Africans tend to leave things to the last minute, Manuel expressed the hope that hosting the 17th Conference of the Parties in Durban this year would prompt all South Africans to wake up to climate change and the need to shift to a low carbon economy.

During the event, one of the breakaway groups raised intense debate on the timing for introducing a proposed carbon tax in SA, as well as the challenges of potential rebates or exemptions to avoid job losses.

Senior Treasury official Ismael Momoniat also expressed the need for decisive action, commenting that "tinkering in isolated pockets won't suffice".

He cautioned that advocacy for "innovative sources" or more extensive aid-type finance from developed countries may be unrealistic.

WWF South Africa, which convened the symposium with the National Business Initiative, discussed the sources of finance it is promoting in the lead-up to COP17, most immediately, a proposed international levy on maritime "bunker fuels", used for international trade and travel, which are not currently subject to national tax regimes.

Another potential source of finance, a portion of which could be channelled to the nascent Green Climate Fund, would be a Financial Transfers Tax.

"Even a tiny tax on speculation would not only generate the scale of public finance required for the low-carbon re-industrialisation required to avert runaway climate change, it would also serve to temper volatility," WWF Climate Change programme manager Richard Worthington said.

"Change requires breaking away from the current system, which can be supported by redirecting finance towards the productive economy."

Worthington proposed that instead of speaking of "innovative sources" we should perhaps talk about "corrective mechanisms".

He said in order to develop political commitment to solutions that can start now, financing green economies need to be high on the agenda at the G20 Summit in November ahead of the December climate change negotiations.