Cap-and-trade can finance climate adaptation

OTTAWA (Dec. 4) As Canadian negotiators make their way to historic climate talks in Copenhagen, a new report by Oxfam and the Pembina Institute makes the case for helping poor countries adapt to climate change, and suggests using a cap-and-trade system to pay for it.

'Financing to help developing countries protect themselves from the violent weather, droughts, floods and shortened growing seasons that come with climate change is a make-or-break issue in Copenhagen, said Mark Fried, policy coordinator at Oxfam Canada.

The Pembina/Oxfam report, 'The Case for Helping Poor Countries Adapt to Climate Change, estimates Canada's fair share at $1 billion to $5 billion each year, over and above Official Development Assistance, to cover its fair share.

The report shows Canada could raise this money by auctioning off less than 10 per cent of the total value of emissions allowances under a cap-and-trade system.

"Auctioning is the fairest and most efficient way to distribute allowances in a cap-and-trade system," said Clare Demerse, associate director of the climate change program at the Pembina Institute. Auctioning at least a fraction of the allowances is part of cap-and-trade proposals or systems in the U.S., the EU, Australia, the Western Climate Initiative and the Regional Greenhouse Gas Initiative.

"Rather than giving this value to industry, auctioning creates a new source of revenue that the government can use for public purposes. Canada's future cap-and-trade system should set aside some of that revenue to fund Canada's fair share of the support that poorer countries need to adapt to climate change."

People living in poverty in developing countries are least responsible for the climate crisis, yet they're suffering its most severe effects. Forty-eight of the 49 poorest countries have drawn up national adaptation plans that identify priority actions, including building flood-proof infrastructure, adopting drought-resistant farming techniques and strengthening disaster preparedness.

'Let's make no mistake: our pollution is destroying the lives and livelihoods of the world's most vulnerable people, Fried said. 'Last year, Canada's support for climate adaptation came right out of the aid budget. This report shows how we can do our part to save lives threatened by climate change without undermining our investment in fighting poverty.