Africa has asked for less compensation toward renewable energy efforts as opposed to the $350 billion a year previously proposed. The head of the African group of nations at the UN Climate Change conference in Copenhagen suggested that $50 billion a year by 2015 and $100 billion by 2020 for developing countries would be sufficient. Ethiopian Prime Minister Meles Zenawi said control over the funds would lie with the countries receiving the capital infusion.
The G77 group of 130 countries, backed by the least developed countries and small island states, has long proposed that $400 billion a year, or 1% of rich countries’ GDP, would be the appropriate figure. Meles also proposed that 50% of the fund created should be allocated to vulnerable and poor countries as well as "regions such as Africa and small island states.”
Money is constantly allocated to African governments, but the problem is the exact allocation of the funds. Many projects are started, but unfinished. Whenever questioned, the funds that have been given seem to have disappeared without a trace.
Zenawi also suggested that a group of high level financiers investigate and provide ways within six months on possible innovative ways to raise money including information on the IMF special drawing rights proposed by the G77 and financier George Soros, a carbon tax, a “Tobin tax” on all financial transactions, and even taxes on flights and shipping.
Meles admitted that many Africans would not be happy: "I know my proposal will disappoint those Africans who … have asked for full compensation … for damage done to our development prospects. My proposal dramatically scales back our expectation of the level of funding in return for more reliable funding and a seat at the table in the management of such fund."
Economist Lord Nicholas Stern welcomed the proposal as "strong and reasonable" and "with the interests of developing countries at its heart". "The focus on new sources of finance provides confidence that new monies are genuinely new from the perspective of developing countries, and allows rich countries with very stressed public finances to explore new and internationally based sources of revenue."
Liz Gallagher, climate finance specialist at Cafod, said: "To slash the figure from $400bn to $100bn is a high-risk strategy – on the one hand Africa could be showing its willingness to compromise; but on the other it is placing its trust in the US and other developed countries to deliver. Whether this strategy is wise or naive remains to be seen."
Awudu Mbaya, president of the Pan-African Parliamentarians Network on Climate Change, said: "If Prime Minister Meles wants to sell out the lives and hopes of Africans for a pittance he is welcome to, but that is not Africa’s position".