Interesting comment on the International Emissions Trading Association (IETA) green bond / carbon credits proposal from the Institute for Agriculture and Trade Policy (IATD).
IATD is concerned that the IETA proposal would transform global climate finance from what they call "a public fiduciary duty" of developed countries, to a new source of developing country debt to private creditors. Mind you this may happen anyway, given that Copenhagen Accord signatories are already saying the bulk of funding will have to come from the private sector - which will mean debt.
The paper paraphrases the IETA proposal as saying to developing countries: “This is the only way that you’ll get climate finance because OECD countries will never acknowledge a climate debt, much less pay it ...”
We would agree that the carbon credit aspects of the IETA proposal aren't the "only" way forward; on the other hand the IATD paper doesn't discuss just how a "climate justice" approach, given a dearth of public funds and entrenched interests in countries like the US, will succeed.
A climate bonds approach with guarantees provides an opportunity for developing countries to get energy infrastructure and other finance at developed country rates. That's better than where we are now.
