Finance for the Paris Climate Compact

The policy brief addresses the 'predictability problem' of public climate finance, where funding is often subject to the political caprice of national budgeting processes. It proposes three plans to secure more reliable funding: 'Plan A' involves international levies on aviation and maritime emissions; 'Plan B' suggests earmarking domestic sources like financial transaction taxes or air passenger duties; and 'Plan C' proposes sub-national contributions from entities like California and Quebec. The author advocates for a 'Development Gold Standard' where governments set aside 2% of carbon instrument revenues for the most vulnerable countries, specifically targeting the under-funded Least Developed Country Fund (LDCF).

• Current multilateral climate finance for developing countries lacks predictability because it relies on national budgetary contributions, which are often subject to political instability and the 'domestic revenue problem' where internal needs take precedence over foreign ones.
• The most effective way to ensure funding predictability is to bypass national budgets entirely through international innovative finance, such as extending the CDM adaptation levy to other Kyoto Protocol mechanisms and new Paris Agreement market mechanisms, or implementing levies via the ICAO and IMO.
• National-level earmarking of domestic revenue is a viable alternative, as evidenced by the proposed EU Financial Transaction Tax (FTT), which is estimated to raise €37 billion per year, and the UK's use of the National Insurance scheme and Climate Change Levy.
• Sub-national governments, specifically in California and Quebec, could provide a 'historic game changer' by earmarking a share of their emission trading scheme auction proceeds for the Least Developed Country Fund (LDCF).
• The author proposes a voluntary 'Development Gold Standard' for climate finance, which would involve developed governments setting aside 2% of the revenue from carbon instruments, such as carbon taxes and emission trading schemes, for the most vulnerable countries.

APA

Müller, B. (2015). Finance for the Paris Climate Compact. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2015/06/CS-PB1-Finance-for-Paris-Climate-Compact-final.pdf

Chicago

Müller, Benito. Finance for the Paris Climate Compact. Climate Strategies, 2015. https://climatestrategies.org/wp-content/uploads/2015/06/CS-PB1-Finance-for-Paris-Climate-Compact-final.pdf.

Wikipedia

{{cite report |last1=Müller |first1=Benito |title=Finance for the Paris Climate Compact |publisher=Climate Strategies |date=June 2015 |url=https://climatestrategies.org/wp-content/uploads/2015/06/CS-PB1-Finance-for-Paris-Climate-Compact-final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mller2015finance, author = {Müller, Benito}, title = {{Finance for the Paris Climate Compact}}, institution = {Climate Strategies}, year = {2015}, month = jun, url = {https://climatestrategies.org/wp-content/uploads/2015/06/CS-PB1-Finance-for-Paris-Climate-Compact-final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }