London, 1 September 2011

A White Paper published today by Bloomberg New Energy Finance argues that a single Green Climate Fund will not succeed in routing $100bn per annum of funding from the developed to the developing world to combat climate change, as demanded by commitments made in Copenhagen and reinforced in last year’s Cancún negotiations.

The report, entitled ‘Towards a Green Climate Finance Framework’, argues that what is needed instead is a set of instruments to provide a range of different forms of support including soft loans, grants to cover the extra cost of clean solutions, and skills-building. Each instrument would be offered by any number of public and private institutions in competition with each other, which would keep costs down and provide for good governance and transparency. The bulk of the required finance would be provided by the private sector directly to individual projects, rather than as government-to-government transfers.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, said: “The current UNFCCC negotiations over the creation of the Green Climate Fund are heading down a dead end. The Transitional Committee charged with the design of the fund is dominated by figures from government with no private sector experience. They are looking to create yet another multilateral institution for managing pools of public money but even if they succeed in creating a fund, there is no earthly way developed world governments will resource it to the tune of $100bn per annum. We need a far more nuanced approach, one which works with the grain of the capital markets, not against it, and one which is designed from the start to reach the required scale.”

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A copy of the White Paper is downloadable from www.bnef.com