World in Transition: Climate Change as a Security Risk - WBGU

208 10 Recommendations for action
10.3.4
Securing the financing of the initiatives
The mitigation of environmentally induced security
risks not only requires resolute political action
by the relevant national and international actors, but
also adequate financial resources to implement the
required measures. Funding is needed, first and foremost,
for strategies to mitigate security risks arising
in the context of ongoing climate change. In addition
to climate-related strategies, funding must also be
mobilized for the international community’s general
conflict prevention activities in order to ensure that
Initiatives 1 and 2 can be implemented effectively on
a sound financial basis (Table 10.3-2).
The wide range of fields of action identified and
the various policies required make it clear that very
substantial funding is needed in order to respond
effectively to climate-induced security risks. Admittedly,
there are no precise estimates of the funding
required for the individual initiatives (further
research is needed here; see Chapter 9), but it is plausible
to assume that cumulatively and adjusted for
inflation, several million millions (10 12 ) euros will be
required to 2100. Existing funding mechanisms such
as the GEF, which finances mitigation and adaptation
strategies in developing countries, are quite
inadequate, given the scale of the challenges. The gap
between the funding requirement and the financial
resources available now and in the near future must
be closed at national and international level through
transfer payments and the restructuring of existing
budgets.
WBGU has made recommendations on existing
and new mechanisms to fund investment in mitigation
and adaptation in many of its previous reports.
These mechanisms are summarized below, assigned
to the various initiatives according to their practicability,
and supplemented with appropriate instruments
to fund international cooperation and conflict
prevention activities.
10.3.4.1
Avoiding dangerous climate change
If a climate policy were agreed and implemented
worldwide that limited the rise in globally averaged
near-surface air temperature to 2 °C relative to the
pre-industrial value, the associated mitigation costs
would entail a reduction of annual global GDP by
around 1.5 per cent against the reference case during
the next one hundred years (WBGU’s calculations
based on various scenarios; WBGU, 2003). These
costs are still far lower than the costs of climate damage
resulting from inaction (WBGU, 2007). Climate
protection is therefore worthwhile from a macroeconomic
perspective, although the costs of climateinduced
security risks are not yet included explicitly
and in full in the damage assessments. As the costs
of the relevant measures arise today but the benefits
are not felt for several decades, there is no guarantee
– despite the obvious advantages of mitigation strategies
– that the necessary investments will be made
promptly or, indeed, at all. International coordination
is therefore required in order to ensure that adequate
financial resources are available for the requisite
investment in mitigation programmes.
Transforming energy systems worldwide
There are currently no sufficiently precise estimates
which show how the required funding can be satisfactorily
estimated. One thing is certain, however: the
transformation of energy systems worldwide should
be a key funding priority, as reflected in Initiatives
4 and 5. This transformation is especially relevant in
the developing countries, where almost 1.6 thousand
million people currently have no access to electricity
(IEA, 2002). Sustainable energy systems would
close this gap and would make a major contribution
not only to mitigating climate change but also to fostering
economic development and reducing poverty
(WBGU, 2005). This could also help reduce vulnerability
to the impacts of climate change and offer a preventive
response to climate-induced security risks.
In order to initiate the development and/or transformation
of energy systems in these relatively capital-poor
countries, however, financial assistance from
the international community is essential. Existing
funds, such as the World Bank Carbon Finance Unit
and the GEF (World Bank, 2005c; GEF, 2005), should
be strengthened with the injection of better and more
reliable funding. In the further development of the
Clean Development Mechanism, too, there should be
a greater focus on sustainable energy systems. Additional
sources of income can be harnessed though
new financing instruments such as the introduction
of emissions-dependent user charges for international
aviation and shipping (WBGU, 2002), unless
these emissions are already covered by other regulatory
schemes (e.g. a national levy on airline tickets;
inclusion of aviation in the EU Emission Trading
Scheme). In the longer term, a system of internationally
tradable quotas for renewable energies
can also generate revenue (WBGU, 2004). Financial
resources can also be mobilized by restructuring
existing budgets. For example, two-thirds of the
energy subsidies in the EU-15 (approx. € 22 thousand
million per annum) still go to support fossil fuel production
and consumption (WBGU, 2007). Just onesixth
of the EU’s energy subsidies currently goes to
support renewable energies (EEA, 2004). This situa-