Soros Claims to Have Solution to Climate Change Funding Gap

George Soros, the Hungarian-American billionaire known for his political activism and philanthropy, claims to have the answer to the disagreement over funding which threatens to wreck the chances of a global consensus on tackling climate change.

One of the key obstacles to success at the UN Climate Change Conference currently being held in Copenhagen, Denmark is the large gap between what developed countries believe they should contribute financially to the fight against climate change/global warming in the developing world and what developing countries believe the developed world should spend on that fight. According to Reuters the developing world is of the opinion that the wealthier nations should spend $300 billion on an annual basis to help reduce their emissions, a figure which represents at least one percent of the wealth generated in the developed world. However the countries who would be expected to find the $300 billion are reportedly only prepared to provide an amount closer to half that figure. Other sources are quoting figures vastly different to those quoted by Reuters, for example the Telegraph claims that China and 137 other emerging economies want as much as $600bn a year whilst the Associated Press is saying that the developed nations are offering just $10 billion a year to help developing countries overcome the effects of climate change/global warming. Whatever the exact cost may eventually be, and the U.N. apparently estimates that $10.5 trillion will be needed by 2030 in order to reduce carbon emissions, although it is not clear if that relates to just the developing world or all nations, George Soros, the Hungarian-born American businessman known for his currency speculation and investing, in addition to his political activities and philanthropy, is claiming that $100 billion can be generated immediately by utilizing assets held by the International Monetary Fund (IMF). Emphasizing that his is only a short-term fix Mr Soros has nevertheless implored the delegates from 192 countries gathered in Denmark to listen to his proposal for "bridging the gap" between the developed and developing nations that is in danger of making progress in Copenhagen if not impossible then certainly very difficult indeed. Mr Soros, founder and chairman of Soros Fund Management LLC and a visitor to the conference in Copenhagen on Thursday, has apparently spoken with officials from the Obama administration in the U.S. but has conceded that Washington is likely to be the place where his proposal flounders. He noted:

It is possible to substantially increase the amount available to fight global warming in the developing world. All that is lacking is the political will. Unfortunately the political will will be difficult to gather because of the mere fact that it requires congressional approval in the United States

It is reported that in addition a negotiator from the European Commission, the executive body for the European Union, has expressed doubts regarding Mr Soros' proposal. The plan put forward by Mr Soros involves the use of $100 billion in Special Drawing Rights, an international reserve asset created by the IMF in 1969 and intended for use at a time of financial difficulties, $200 billion in new Special Drawing Rights having been created in response to the recession from which the world may finally be recovering. Drawing on $100 billion of those Special Drawing Rights, the developed world would invest the money in the developing world, on projects to cut emissions. The developed nations would be responsible for the loan and the interest it would attract, IMF gold reserves acting as a guarantee if default occurred. However the intention would be for the loan and interest to be repaid from the profits generated by the projects in which the funds supplied by the IMF were invested. The hope would be for those profits to be made in the global carbon market. Ultimately the expectation is that the private sector will be the source of much of the funding needed to fight climate change/global warming, even if there seems to be little clarity at present on how private funds will be effectively applied to the problem. There has been early support from environmental groups for what Mr Soros, who intends investing $1 billion of his own money in what Reuters describes as "low-carbon assets", has proposed. It remains to be seen what level of support he attracts from other parties attempting to finalize some form of agreement on tackling climate change/global warming.