Sunday, September 6, 2009

The G20 and the Developing World Disagree on Proposed Climate Change Protocols

Later this month the G20 will be meeting in Pittsburgh and although the G20 largely supports an agreement to manage climate change, developing nations are concerned that these efforts will undermine their economic growth.

Although Europe is struggling, we are seeing signs that the world's economies are emerging from recession. Finance ministers and key central bank officials meeting in London over the past couple of days were expected to address stimulus spending and coordinate an orderly exit from the easing phase of the monetary cycle.

In ongoing meetings ahead of the G20 summit in Pittsburgh, emerging markets are also garnering considerable attention. One of the primary issues was the development of international approaches to assist poorer nations.

Prior to the meeting in London, a recent Bloomberg article reported that "Finance ministers from Europe’s largest economies said they are ready to hand the International Monetary Fund (IMF) more money than they previously pledged to assist poorer countries through the global financial crisis."

The Bloomberg article indicated that four days before the London meeting of G20 nations, the governments of the UK, Germany and France were urging the 27 member states of the European Union to provide $75 billion in addition to the $100 billion they have already committed. April's G20 summit in London pledged a total of $1.1 trillion to boost financing through the IMF and to encourage trade to combat recession

At the upcoming talks in Pittsburgh the G20 wants to improve the regulation of global finance, restore confidence in the financial industry and restrain pay bonuses. However, resistance from poorer nations threaten the agenda to manage climate change.

With Cop 15 only a few months away, international consensus is crucial for a post Kyoto agreement. Wealthier nations will have to continue to provide incentives for developing nations to participate as well as disincentives for non-cooperation.

Next: Curbing Banker's Bonuses and Climate Change
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