EU role in third world climate plans assessed

Commission calls for EU to exploit comparative advantages in assisting developing countries

The EU should use its comparative advantages in development cooperation to play a leading role assisting developing countries in meeting the challenge of climate change, the European Commission said in a working paper released yesterday. The paper says that work is already underway to "mainstream" climate change into EU development cooperation policies, for example by systematically screening projects to identify potential climate benefits. It argues that, despite developing countries' "high expectations" for financial assistance and technology transfer, the key role for public policy on investments should be to create an "enabling environment" for private sector investments. The analysis is backed up by statistics showing that domestic investment is the largest source of financial resources in all developing countries, of which 60-70% is private investment. Only in the poorest developing countries would official development assistance (ODA) play a large role. The EU has a "comparative advantage" in development assistance due to its current "strong role" and wide experience, the paper says, arguing that this should be used to support climate change initiatives. Specific recommendations include full involvement in defining how the Kyoto mechanisms of joint implementation and the clean development mechanism will work, noting that "reliable and predictable rules" for the instruments will be crucial. Aid could be used to assist countries in preparing for the two mechanisms, the paper says.

Follow Up:
European Commission, tel: +32 2 299 1111. References: "EC Economic and Development Cooperation: Responding to the New Challenges of Climate Change".

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