President Obama made a historic commitment to international finance at the Copenhagen Climate Summit in December 2009. Can he deliver? The financial pledge the United States made in Copenhagen was key to winning support for the Copenhagen Accord, an agreement that the president negotiated and includes significant mitigation commitments by emerging economies.

“The United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries,"said U.S. Secretary of State Hillary Clinton during the Copenhagen Summit. "We expect this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance.”

Initially, administration officials and climate advocates believed a major source of U.S. contributions to the fund, which countries agreed to finance at the level of $100 billion a year by 2020, could come from domestic climate legislation. That opportunity ended with the Senate's inability to consider a climate and energy bill in 2010. Obama administration officials insist that new and innovative sources will be necessary to meet the president's pledge.

This page will stay up-to-date on key international climate finance topics including fast start funding, the High-Level Advisory Group on Climate Finance, and the most promising innovative finance mechanisms. It will also track the issue of finance across various fora including the UNFCCC, G20, G8, IMF, the World Bank, and bilateral negotiations.

Many experts believe that the Copenhagen negotiations highlighted the importance of climate finance in reaching a global deal. If substantial progress is to be made this year in Cancun, finance is certain to be at the heart of the negotiations.

Traditional Finance

Though the need is still much greater, the United States government has begun scaling up international climate finance. Climate funding for 2010 (disbursed through USAID, the Departments of State and the Treasury Department) will be three times higher than in FY 2009, rising from $315 million to $1.0 billion. The FY 2011 budget request includes $1.4 billion for these agencies--a 38% increase from the previous year.

Innovative Sources of Finance

Given the scale of the resources needed, all reasonable innovative finance mechanisms should be included in the discussion of options for mobilizing predictable public resources. Each revenue option brings with it certain political and technical challenges to implementation. It is possible that mechanisms that are difficult to implement in the U.S. may be well suited to other countries’ national circumstances. As discussions regarding long term finance take place in various fora this year, the most constructive position for the U.S. to take would be an open-minded approach that seeks to consider the wide-range of proposals that may provide a suitable way for all countries to raise the needed resources.