EU sets out €15bn climate aid plan

The European Union is to offer a modest €15bn a year to help poor countries cope with the effects of climate change, setting the stage for a fight before an international conference in Copenhagen in December.

Rich and poor nations have traded recriminations over the central question of how much money developed wealthier countries should contribute to developing poorer ones nations such as China and India to help them adapt to and limit global warming.

The European Commission figures emerged as European ministers raised concerns about climate talks progress.

David Miliband, UK foreign secretary, warned there was a "real danger" that the Copenhagen talks would "not reach a positive outcome". He added: "There is an equal danger that in the run-up to Copenhagen people don't wake up to the danger of failure until it's too late."

Connie Hedegaard, the Danish minister hosting the Copenhagen conference, said in Aberdeen that the negotiations were "definitely moving too slow".

She added that although there had been some significant political progress, such as the commitment by Japan's new government to cut emissions by 25 per cent from 1990 levels by 2020, that was not being matched in the formal negotiations.

"People are ducking themselves down and arguing still the same way they have been for three or five or seven or 10 years," she said, although she added that she had high hopes for a UN climate change summit in New York and the Pittsburgh G20 meeting, both this month, to push the process forward.

The Commission's proposal, overseen by Stavros Dimas, the European environment commissioner aims to break an impasse between developed and developing countries. It pegs developing countries' total climate change needs at about €100bn per year by 2020. Up to half of that would be covered by governments, according to the proposal, with EU member states covering up to 30 per cent, or €15bn, and the US contributing up to 24 per cent, or €12bn. The EU hopes the other half would be covered by the private sector.

But the EU offer falls short of what developing countries have said is needed. Chinese scientists, for example, have put the cost of reducing China's emissions as likely to reach $438bn annually within 20 years.

The Commission declined to comment. People involved in the discussions warned that the draft could change.

Tosi Mpanu-Mpanu, senior climate negotiator for the Democratic Republic of the Congo, said the range of the Commission's proposal was so broad that it was difficult to judge, but called the top-end figure for public funding, some €50bn, "a good start".

The commission argues that much of the shortfall be made up by the private sector through emissions trading schemes, which encourage private-sector companies to invest in green technologies in the developing world. It estimates as much as €38bn per year could flow to developing countries from an international carbon market by 2020. "The international carbon market, if designed properly, will create an increasing financial flow to developing countries and could potentially deliver as much as €38bnper year in 2020," the proposal states.

One point of contention in the proposal is language suggesting that the EU could use development aid promised for poor countries as part of its climate-change contribution.

That possibility has stirred opposition from aid and environmental groups, which otherwise praised the Commission for putting an offer on the table after months of delay.

Elise Ford, head of Oxfam International's Brussels office, said the proposal would "in effect rob tomorrow's hospitals and schools in developing countries to pay for them to tackle climate change now".

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