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Nearly $1 billion a day to change the climate… the invisible vested elephant in the room

Posted By Joanne Nova On October 28, 2013 @ 3:20 pm In Global Warming | Comments Disabled

Elephant, Climate funding, Global Warming Finance.

Here’s a stark statistic that came out last week in a new report: The Climate Industry draws in nearly $1 billion dollars a day. But here’s an ominous combination:  …  it openly admits that taxpayer money is its “engine-room”. Reading between the lines below, this industry is almost completely dependent on domestic policies that funnel money from citizens to itself, and tilts the playing field — without those policies, it can’t attract much private money. That is, it can only get money at least partially by coercion, people won’t give it money purely voluntarily. These same groups want even more — they want the public to take the risks too. What could possibly go wrong?

Al Gore, said it himself: “Special interests control decisions too frequently.” [See the ABC]. So he must be concerned about the lobbying weight of a $360 billion dollar baby whose existence is contingent on government gravy? As if…

From: The Global Landscape of Climate Finance 2013 from the Climate Policy Initiative

“Landscape 2013 finds that global climate finance flows have plateaued at USD 359 billion, or around USD 1 billion per day – far below even the most conservative estimates of investment needs.

OK, so in greenspeak, it’s only a billion dollars a day, and that’s not nearly large enough!

“In 2012, annual global climate finance reached approximately USD 359 billion (range of 356-363 billion). The private sector continued to provide the lion’s share, contributing USD 224 billion, or 62% of the total. The public sector contributed USD 135 billion (range of 132-139), or around 38% of global climate finance.

The public sector provides 38% of “climate finance”, but note, if it disappeared, the sector would shrink by more than 38%, because some of the private money would disappear too. This, below, is their nice way of saying they feed off taxpayer subsidies.

“Landscape 2013 confirms that public policies, resources, and money are the ‘engine room’ of the climate finance system, and can alter the balance between risk and return in ways that drive the supply and demand for finance. Private capital flows into climate investments when public incentives

and money make them commercially attractive by taking-off risk and reducing incremental costs. While many countries have policy frameworks that provide such incentives, significant capacity and incentive gaps remain.

The first thing on their list is to ensure the gravy keeps flowing from taxpayers…

“We offer the following findings as action points for policymakers:
“1. Develop well-articulated domestic enabling environments to encourage further private investment.

Point 2: Citizens need to take more risk, because the private sector realizes how fickle this all is. Private money doesn’t want to go to Uganda.

“Recognize that private actors prefer familiar policy environments where the perception of risk is lower.

“…the 24% of climate finance that flowed between countries in 2012 was dominated by mostly  publicly funded North-South flows. Of private flows, the vast proportion was invested in  developed countries…

Point 3: What’s a new “risk mechanism”? Is that a way of disguising real risks, or a new way of shifting risk from investors to the taxpayer? (If I invent Climate-Blackjack, is that another new risk management tool?)

“There is potential for government-backed sponsors to scale up the provision of new and improved risk mechanisms. Landscape 2013 highlights the potential of government-backed sponsors such as DFIs, a coalition of like-minded governments and potentially, the Green Climate Fund (GCF), in scaling up provision of new and improved risk instruments.

OK. I scoff, but most of the people working in this — the accountants, marketers, lawyers, the odd engineer– are doing a hard day’s work. But in the end, together, this generates the most highly leveraged kind of lobbying machine. Without government policies hoping to change the weather, the industry collapses. That is not like big-oil. If the government stopped subsidizing car manufacturers, people would just import cars from overseas. If the government made the outrageous move of banning all new fossil-fuel cars, everyone would just keep driving their old one. Modern cars don’t need government subsidies to work, and big-oil doesn’t need government policies to sell oil — but windmills and solar panels certainly do.

Elephant original Wikimedia: Hansm

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