Soros Proposes Way to Fund CO2 Cuts

By ALESSANDRO TORELLO
COPENHAGEN -- Financier George Soros proposed that rich nations tap into special currency reserves issued by the International Monetary Fund to finance developing nations' efforts to combat climate change.
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Making the proposal, Mr. Soros waded into the key dispute between rich and poor nations at the United Nations climate summit here.
Mr. Soros suggested that rich nations finance climate subsidies for developing nations by tapping into some of the $283 billion in special drawing rights that the IMF issued to respond to the global financial crisis earlier this year. More than $150 billion of those rights went to the 15 biggest developed economies, he said. Special drawing rights, or SDRs, are a form of composite currency issued by the IMF to its members.
"Rich countries could double available funding to combat climate change by donating recently issued special drawing rights to a new green fund," Mr. Soros said. "This fund would jump-start investment in low-carbon energy sources, reforestation efforts, rainforest protection, land-use reform, and adaptation programs."
Developing countries expressed support for the idea, while European Union negotiators responded with skepticism. The IMF declined to comment.
Mr. Soros is among a cadre of business and political figures in Copenhagen hoping to sway the bargaining among 190 nations over what should be done to cut the emissions linked to a trend of rising temperatures, and who should pay the price. The conference is scheduled to end Dec. 18 with a gathering of world leaders.
The U.N.'s chief climate negotiator said "some progress" is being made toward deals that leaders can consider next week. "There is real seriousness now to negotiate, good progress is being made in a number of areas, especially in the area of technology," said Yvo de Boer, the executive secretary of the U.N. Framework Convention on Climate Change.
Countries agreed that a new executive body should be set up and would be responsible "for accelerating action on technology development and transfer."
The transfer of technology to developing countries to help them limit their greenhouse-gas emissions is a delicate matter in the talks because of issues such as intellectual-property rights and patents. Technology transfer could be a profit opportunity for investors and companies with solar panels, wind turbines, carbon scrubbers and other technology.
Reuters
Financier George Soros announced a plan to generate an additional $100 billion for climate-change relief.
Mr. Soros said in October he would invest up to $1 billion in clean-energy technology, and announced the formation of a policy initiative to address global warming, which he would fund with $10 million a year over 10 years.
Without action to put limits on consumption of fossil fuels, however, some clean-energy bets may not pay out, because fuels such as coal and oil are cheap, abundant, and don't require expensive new technology.
Poor countries are calling on the U.S. and the European Union to subsidize investments in clean-energy technology.
Developing countries, backed by some nongovernmental organizations, embraced Mr. Soros's idea. "As we are sitting now, the IMF is sitting with more than $200 billion of SDRs that are not being used," said Lumumba Stanislaus Di-Aping, Sudan's ambassador to the U.N. and chairman of the Group of 77 developing nations, in a news conference Thursday. Issuing that money wouldn't create inflation, just "effective demand," he said.
EU representatives were cautious. "We have to be very careful in the way we use the special drawing rights. It is an instrument that can be used in very specific situations," said Artur Runge-Metzger, a lead EU negotiator. "There is no way we can just print money in order to make sure there is sufficient finance on the table."—Devon Maylie in London contributed to this article.
Write to Alessandro Torello at alessandro.torello@dowjones.com