W. STERK, H.-J. LUHMANN, F. MERSMANN| HOW MUCH IS 100 BILLION US DOLLARS international sources because they can be better con­trolled by national administrations. Even within the EU, member states have so far rejected all suggestions to create new funding sources for the EU institutions that are independent of national processes. On the other hand, revenues that accrue at national lev­el are likely to be pocketed by finance ministers. Again the EU example is illustrative. In the current trading phase of the EU ETS, member states may auction up to 10 per cent of allowances and several member states, including Germany, are doing so. Thus, the EU is alrea­dy implementing one of the funding sources discussed by the AGF. However, most of these revenues accrue to the general national budgets of member states and only a minor share is used for climate purposes. Starting in 2013, most of the allowances in the EU ETS will be auctioned. However, member states rejected all sugges­tions to earmark a share of these revenues for climate finance. Instead, the EU directive only includes a non­binding suggestion to use at least half of the revenues for climate-related purposes. If revenues are collected internationally – for example, through international auctioning of allowances or the introduction of new mechanisms for international avi­ation and shipping – the climate regime could in prin­ciple be made self-financing. However, the difficulties encountered in introducing such mechanisms have in part been due precisely to the fact that these funding streams would not be under the control of national governments. 5. Conclusions Clear accounting rules for international climate finance are crucial both for the sake of transparency and for ge­nerating political trust between countries, as well as for making sure that financial flows are actually adequate to the task of achieving sufficiently strong emission reduc­tions and adaptation to the impacts of climate change. So far, financial resources provided by industrialised countries have been of a relatively limited volume and transparency has been lacking. Industrialised countries have pledged to mobilise 100 bil­lion US dollars by 2020. The AGF has assessed a variety of potential funding sources and concluded that achiev­ing this goal is challenging but feasible. However, it is not clear whether the 100 billion pledge relates to gross or net flows. The Copenhagen Accord and the Cancún Agreements leave this question open, and the AGF was also not able to decide in favour of one or the other interpretation. Looking at the AGF assessment it is noteworthy that the underlying assumptions are fairly conservative. The AGF focuses its analysis on a medium-range carbon pri­ce that is not in line with achieving the 2° C target and assumes that only relatively low shares of revenues from carbon markets could be dedicated to international cli­mate finance. If one assumes – perhaps hopefully – that emission caps will at some point be brought in line with the 2° C target and that revenues from international sources, in particular carbon-related sources in internati­onal transport, will be fully dedicated to climate finance, mobilising 100 billion US dollars does in fact appear to be eminently viable. International aviation and shipping alone could provide as much as half of this amount and only a relatively minor share of 7 per cent of the revenu­es of auctioning allow-ances in industrialised countries would be needed for the other half. What is more, this would amount not to a gross but to a net transfer of 100 billion US dollars. When looking at the climate-related financing needs of developing countries, counting only net transfers to­wards the 100 billion commitment does in fact appear to be the only interpretation adequate to the problem that must be solved. Studies by the OECD/IEA, the World Bank and others indicate that 100 billion is likely to be the order of magnitude of the incremental costs alone, while related incremental investments are likely to amount to several hundred billion per year and re­lated total investments are many multiples of 100 bil­lion. Counting the full volume of loans and private in­vestments towards the 100 billion commitment would therefore amount to substantially undersupplying actual financing needs. The sources assessed by the AGF differ regarding the political level – national or international – at which de­cisions are taken and funds flow into budgets. Govern­ments clearly prefer sources which they can keep un­der their full control. However, in order to maximise the reliability of funding it would seem advisable to make the climate regime self-financing by collecting revenues 11