Dominique Strauss-Kahn, head of the International Monetary Fund, said the organization is devising a ''green fund'' that would help rich nations meet their Copenhagen pledge to raise $US100 billion ($109 billion) a year by 2020 to tackle the effects of climate change.
The IMF would use its quotas, which reflect member countries' financial capacity and obligations, to fund projects in developing countries while the US, EU and Japan are still negotiating their individual contributions, Strauss-Kahn said.
''Launching such a scheme would entail a major political effort. But the potential pay-off is enormous - for Africa and the world,'' the IMF's managing director said in a speech at the university of Nairobi in Kenya today. ''Now is the time to put new ideas on the table.''
The fund would help African nations tackle the increase in drought, flooding, food shortages and disease that will likely be caused by climate change and may spur progress on negotiations towards a global agreement on curbing emissions. The IMF increased its quotas last year in order to add more than $US250 billion to global liquidity following a request from the Group of 20 leaders.
''Early progress with financing for climate action will help to unlock support from developing nations for an ambitious global deal on climate change,'' said Richard Gledhill, global leader of the climate change practice at PricewaterhouseCoopers LLP. ''The key challenge will be to structure commitments in such a way as to leverage investment from the private sector and from the carbon markets.''
The Intergovernmental Panel on Climate Change forecasts as many as 250 million Africans may be exposed to water shortages by 2020 and some countries may see harvests fall by 50 per cent.
On December 10, billionaire George Soros asked the richest nations to use $US100 billion of foreign-exchange reserves to finance emissions-reducing projects in poor countries.
The reserves would go into investments in rain forests, agriculture and land use that will lower carbon-dioxide emissions, the financier said during negotiations involving 192 nations in Copenhagen.
