A new global financial architecture would be an important part of the global climate change deal intended to replace the Kyoto Protocol post 2012, and the World Wide Fund for Nature (WWF) has suggested that this system would need to generate at least $160-billion a year.

As the high-profile Group of Eight (G8) summit in Italy proceeded, the WWF asked developed countries to put forward the financial commitment of $160-billion a year for emission cuts and adaptation to climate impacts in the developing world, from 2013 to 2018.

The G8 and the Group of Five (G5), including South Africa, China, India, Brazil and Mexico, met on Thursday at the summit, to seek common ground on global warming and international trade, with the poorer countries looking for concessions.

Newswire Reuters reported that US President Barack Obama was scheduled to chair climate discussions, but hopes of agreeing ambitious goals faded after China and India rejected demands to halve their greenhouse gas emissions by 2050.

The G8, however, had already agreed, on Wednesday, to try and keep the global temperature increase below 2 ºC. WWF commended this agreement, but however, stated that “without a clear path for emission reductions, the 2 ºC statement will just join a long list of broken promises”.

Prior to the G8 meeting, local WWF climate change programme manager Richard Worthington emphasised that “fair and democratic governance of the funds [$160-billion suggested by the WWF] - in other words allowing the developing countries to design their response from the bottom up, not as a result of conditionalities from the financial support” would also be vital.

The WWF suggested United Nations Framework Convention on Climate Change (UNFCCC) governance of climate funds, and emphasised that the World Bank not be involved, to ensure developing countries played a meaningful role.

At the Bonn UNFCCC meeting in June, South African negotiators had agreed, in principle, to taking mitigation actions, but with the proviso that finance and technological support be extended by rich countries. Those targets and reductions would then be measured, reported and verified.

There was concern that there was, to date, no real financial package on the table.

The required package would be a financial architecture that would allow developing countries to do things like building dykes or fortifications to hold back the rising sea levels that were anticipated as a result of global warming, as well as make investments in low-carbon technologies and so on.

The Global Climate Network (GCN) in a ‘Breakthrough on technology’ report released on Wednesday, stated that finance goes hand in hand with technology development and transfer.

GCN participants in the study, from both developed and developing countries, identified the lack of access to finance, both private and public, as a barrier to technology development and deployment.

Most low-carbon technologies required high up-front investment and could be more costly to deploy than carbon-intensive alternatives.

“Therefore, while the focus on finance in the negotiations has been on either establishing carbon markets or on new funding mechanisms, other, often government-led, financing initiatives may be necessary,” said the GCN.

Although in the longer term, the private sector would be the major source of low-carbon finance, government money is needed early on to make new technologies cheaper and less risky, the organisation added in the report.