The Sticking Point: U.N. Climate Delegates To Debate Financial Measures
ARI SHAPIRO, HOST:
One of the biggest sticking points in these climate talks has been money. The question is how much rich countries will pay poorer countries to develop in a clean way. Joining us now is Rachel Kyte. She is the special envoy for the World Bank on climate change. Welcome to the show.
RACHEL KYTE: Hi, Ari.
SHAPIRO: Explain why finance has been such a big sticking point in these talks.
KYTE: So at the backdrop to all of the climate negotiations is the concept that the impacts that we're feeling now and the damage that we've stored up in the future unless we mitigate the emissions which cause climate change have been caused by certain industrialized countries over the past decades. But the impacts are being felt by - in particular by the poorest and most vulnerable countries around the world.
SHAPIRO: So you're saying rich countries cause the problem; poor countries suffer from the problem.
KYTE: Exactly. And in fact, everybody suffers from the problem, but some people suffer more than others, and some people have less resources with which to be able to protect themselves, to adapt, to make themselves more resilient.
SHAPIRO: It seems obvious that poorer countries want as much money as they can get. Wealthier countries want to give as little as they can get away with. Does is ultimately work like a typical negotiation? You say 10. I say five. We settle on seven or eight. How exactly does it work?
KYTE: There is an incremental cost to growing greener sooner than perhaps would be possible if technology wasn't available to you or if you didn't have access to the right capital at the right cost.
SHAPIRO: You're saying you have to pay to switch from dirty energy to clean energy?
KYTE: Yeah. I mean, all the economics show that to wait and to delay will cost you more. So we really need to help countries that are maybe having, you know, huge development needs to get them to grow cleanly more quickly. And so I think developed countries are very sympathetic to that, and that's going to happen through private investment. But there is, for the least developed and for the most vulnerable, the need for transfers of finance to pay for costs of adaptation, in particular.
SHAPIRO: Does transfers of finance mean wealthy countries give money to poor countries? Is that what that term means?
KYTE: Yes. And so in addition to all of the development finance that already flows - you know, the overseas department assistance that the U.S. and everybody else is committed to - there's climate finance that needs to be given over and above that. And the formula was that $100 billion a year by 2020 should be transferred. We're halfway to 2020, and there's far more than half of the hundred-billion flowing. But often it's difficult to actually see the project, where that money is actually being used. And there's - in a context where there's not a lot of trust, it's easy to believe that that money isn't there.
SHAPIRO: One thing that I don't understand about this finance debate is that the vast majorities of countries here in Paris for the summit have already made their commitments of how they're going to shift to clean energy, from the highly developed countries and the wealthy ones to the underdeveloped, poor ones. If they've already made those commitments, well, then, what difference does the money debate happening here at the summit make?
KYTE: Well, I think it's a real issue for the most vulnerable because for them, they need to mitigate their emissions as they grow, but they emit very little. They need to become more resilient to withstand the shocks of climate that they face today, and that has a cost. And so one of the ideas that's actually been talked about here is a sort of global solidarity fund, where perhaps you either tax or you take a percentage of carbon taxes as they're being introduced around the world, or you find another way to sort of levy everybody so that there's a global fund that can pay for that.
But it's a political totem, in many ways, that the damage was caused in decades in the past and today by some countries, and it's being felt punitively now by others. And this is a down payment on a world that has to look very different.
SHAPIRO: People have described this debate over money as one of the biggest sticking points of this summit happening right now in Paris. Could you imagine it actually scuttling a deal? Could this be the reason that no deal is reached?
KYTE: When you talk to the delegates, there is a feeling that we've - that everybody knows that we've got to come out of here with a strong deal. Now, whether or not we're good enough diplomats to be able to fashion that is a different question. So I think that, yes, finance will be one of the last pieces of the puzzle to slot into place, but I am hopeful that it won't be the obstacle to it and the reason for a weaker deal. As I said, outside of the negotiating rooms, the, you know - billions and hundreds of billions of dollars that are now evidently flowing and are being pledged from big financial institutions in the way that they are going to manage their assets going forward - I mean, we really are at a turning point now, I think.
SHAPIRO: That's Rachel Kyte, the World Bank's special envoy for climate change. Thanks very much for talking with us.
KYTE: Thanks, Ari. Transcript provided by NPR, Copyright NPR.