W. STERK, H.-J. LUHMANN, F. MERSMANN| HOW MUCH IS 100 BILLION US DOLLARS Table 4: Climate Finance Needs in Developing Countries Study Mitigation World Energy Outlook 2010 (energy investment based on Copenhagen pledges) Project Catalyst 2010(energy investment for cost-effective 450 ppm pathway) World Development Report 2010(synthesis of various other studies) Median Adaptation World Development Report 2010(synthesis of various other studies) Median Total investment Up to 400 billion in 2020 n. a. n. a. n. a. n. a. n. a. Incremental investment About 130 billion 290 billion p. a. by 2020 63-300 billion in 2020 265-565 billion in 2030 200 billion in 2020 4-105 billion in 2010-2015 15-100 billion in 2030 50 billion in 2020 Incremental cost n. a. 60 billion No figures for 2020 140-175 billion in 2030 n. a. n. a. n. a. The only interpretation of the developed countries’ commitment that is adequate to the problem at hand is therefore to see it as funding to cover incremental costs and leverage the needed additional investment of several hundred billion dollars per year. Thus, the 100 billion US dollars need to be counted on a net, not a gross basis. 4. Implications for Political Decision-Making Processes The sources assessed by the AGF differ regarding the political level – national or international – at which de­cisions are taken and funds flow into budgets. In what follows we detail the respective national and/or interna­tional processes related to each funding source. Auctioning of international emission allowances: The decision to auction international emission allowances, such as AAUs under the Kyoto Protocol, would be ta­ken at the international level. The costs would have to be borne by the governments of industrialised countries and revenues would accrue to the entity that auctions the allowances, most likely an international fund. Auctioning of national emission allowances: The deci­sion to auction emission allowances in a national ETS is taken by the respective national government. The costs would be borne by the installation operators concerned and the revenues would accrue to the national govern­ment. Levies on international offset mechanisms: These by de­finition are levied internationally. Under the CDM, 2 per cent of CERs are retained, that is, they are not issued to the project participants who finance the project. The CERs are monetised by the World Bank to finance the Kyoto Protocol’s Adaptation Fund. However, the World Bank only acts as trustee; funding decisions are made by the Adaptation Fund Board, which consists of 16 mem­bers elected by the Parties to the Kyoto Protocol. Taxes on international aviation and shipping: These could be organised nationally or internationally. While the decision to tax would be taken internationally, the revenues could accrue either to an international institu­tion or to the countries where fuels are sold, flights take off, tickets are sold and so on, depending on the design. The taxes would be paid by international aviation and shipping companies. Wires charges: The decision to levy a charge on elec­tricity production might be taken internationally but implementation would have to go through national governments. In theory, the revenue could accrue to in­9