Dec 28, 2009
Climate Change - Who Pays the $100B Annual Tab?
Secretary of State Hillary Clinton spoke of the U.S. and other countries "mobilizing" $100 billion a year by 2020 to help poor nations deal with climate change. A large chunk of this money would likely come from companies in the developed world buying "carbon credits" to offset greenhouse-gas emissions from their own factories, said the administration official.
The purchase of the credits would fund activities that avoid carbon emissions in the developing world: preserving forest land in Brazil, say, or installing solar panels in villages in Africa. There would be some government money, which would go largely to projects unlikely to attract private capital. Among them, the administration official said: building dikes or storm-warning systems in low-lying, poor countries particularly threatened by a potential rise in sea levels triggered by climate change.
One hopeful sign in Copenhagen for people in the carbon-trading business is a potential agreement to allow the sale of carbon credits produced by saving forests. Trees consume carbon dioxide as they grow, and thus offset some of the world's greenhouse-gas emissions. The sale of carbon credits from preserving trees could generate about $5 billion by 2015, most of it from U.S. firms. Curbing deforestation, in turn, could generate another roughly $20 billion in annual investments in developing countries, for instance, in technologies to monitor tree growth and materials necessary to make the projects work.