Paul Epstein: Building the Green Climate Fund

Dr. Paul Epstein sent me the following commentary on Cancun and financing the Green Climate Fund. Epstein is associate director of the Center for Health and the Global Environment at Harvard Medical School.

While many issues remain unresolved following the Cancun climate meeting, the delegates did agree upon a “Green Climate Fund.” Money is the critical, limiting factor for progress. But, left unresolved, is how to raise it.

Just as the Montreal Protocol required funds to come into force, a global fund for adaptation, mitigation and forest preservation is needed to bring all nations into today’s process. While most developing nations have contributed little to the climate “problem,” all nations can be part of the “solution,” given adequate funds for building resilience, maintaining forests, and purchasing and manufacturing climate-friendly technologies. The International Energy Agency estimates the $500 billion is needed per year for 20 years to achieve the clean energy transformation.

But, with so many Western nations reeling from deficits, the source of funding must be de-nationalized. In November, 2010 the UN High-level Advisory Group on Climate Change Financing looked at carbon and airline taxes, and a tax on financial transactions. A tax on currency transactions — the Tobin Tax — may have the highest yield. Wagers on foreign exchange differentials have ballooned from $18 billion/day in 1970 to $4 trillion each trading day today. (In 1971 President Nixon abandoned two of the Bretton Woods rules — letting exchange rates float and removing constraints on capital movement across borders. Thus began the modern era of deregulation, bringing the West to a precarious moment.)


A fraction of a penny taken off of each transaction would generate hundreds of billions of dollars “¦ and slow down the rapid, destabilizing, speculative transfers of capital across national borders (the original intent of Nobel-prize winning economist, James Tobin). This two-fer would also come from those most able to afford it — the swollen financial sector.

Won’t finance bloc such a move? There a precedent for enlightened self-interest on the part of finance. In the early ’90s the UK managed a transfer of funds from its financial sector into industry (by cutting interest rates).

A transfer of funds today from finance into the clean and green development would constitute a sound investment into our common future.

— Paul Epstein, M.D.

You can read some of Dr. Epstein’s prolific work on the subject of health impacts of climate change here, including his New England Journal of Medicine article, “Climate change and human health” and the exhaustive Climate Change Futures: Health, Ecological and Economic Dimensions.