IMF money to fight?

Rich countries should pay poor countries $100 billion a year to fight climate change, using the foreign exchange reserves they have received from the International Monetary Fund (IMF), says US billionaire investor George Soros.

Speaking on the sidelines of the Dec 7-18 climate summit here, Soros said: 'The move will jumpstart investment in low carbon energy sources, reforestation efforts, rainforest protection, land use reform and adaptation programmes,'

The hedge fund guru said in a statement: 'Rich nations can provide the money by donating recently issued Special Drawing Rights (SDRs) of the IMF to a green fund. This is a win-win opportunity for developed and developing countries to work together. Since the funding is available now, it can have an immediate impact.'

The 186-nation IMF issued $283 billion in SDRs in September to boost liquidity as part of its efforts to tackle the global financial crisis. Over $150 billion went to the 15 biggest developed nations.

'This sits largely untouched in their reserve accounts, leaving a surplus that could be donated to the fund,' the statement said.

The idea was promptly welcomed by the Group of 77 countries. Lumumba Stanislaus Di-Aping of Sudan, the current G77 chair, wanted the US Congress to vote $200 billion of the SDR money so that developing countries could fight the climate change that was affecting them the worst, though the problem had been caused by industrialised nations.

The NGO community also welcomed the announcement. Greenpeace International Executive Director Kumi Naidoo said: 'Money is one of the keys to a good outcome in Copenhagen. It is needed to build trust to get a climate saving deal...

'We need at least $160 billion a year for the poorest countries to beat climate change, protect forests and save lives. George Soros has suggested one way to raise the cash required. Every world leader should study this proposal, but no matter what, industrialised countries must put the money on the table by the end of next week,' when the climate summit ends.

'Using IMF gold reserves as Soros suggests could work if it was combined with a levy on international aviation and shipping, and a small tax on financial transactions,' Naidoo added.

ActionAid's Climate Justice Coordinator Tom Sharman said: 'The $200 billion a year that developing countries need to tackle climate change effectively will not just fall out of the sky. That's why innovative ways to find the cash are so important.

'George Soros's proposal to use Special Drawing Rights to raise $100 billion is an exciting initiative that deserves further consideration alongside proposals to tax international aviation, shipping and financial transactions. '

Robert Bailey, Oxfam International's senior climate adviser, said: 'Finally someone is showing the kind of innovative thinking needed to make this deal worth its salt. Soros' proposal shows exactly the kind of ambition and urgency we need to see from rich country governments themselves. These kinds of long-term public resources are desperately needed so that poor countries can count on regular, and large payments to help them fight climate change.

'All we've heard from rich nations so far is vague and evasive whispers, when the fact of the matter is, there is still not a penny of long-term finance on the table to help poor countries cope with climate change.

'Poor countries will need at least 100 billion a year by 2020 to adapt to the ravages of climate change. With just one week to go, its time for governments to stop sidestepping climate finance and put their money where their mouth is.'