Updated: UK sets out climate fund compromise

A group of four nations sought to quell the escalating row over climate funding at the Copenhagen Summit yesterday with the release of a new proposal that would ensure the transfer of funds to developing nations is overseen by the UN.

Britain, Australia, Mexico and Norway released a joint submission stating that "financing will need to be scaled up significantly and urgently, starting fast and rising over time".

Significantly, it proposed that the fund be run by an independent board which would be accountable to the UN. It also said that priority should be given to the most vulnerable countries and that at least half the sums raised should be earmarked for investment in climate adaptation measures.

Developing nations would prefer funding to be assigned by the UN and remain fiercely opposed to perceived US efforts to hand control of climate funding to the World Bank. At least part of the anger at the Danish Text leaked earlier this week was driven by the interpretation that it would lead to the World Bank – an institution largely seen as being controlled by rich nations – becoming increasingly involved in funding decisions.

However, the UK-backed proposal said that there was an "emerging consensus" that funding should be managed by a new board with equal representation from developed and developing economies.

The new funding proposal did not put any figures on the amount of funding to be provided, although the UK has said it wants to see a $10bn (£6bn) global fund set up immediately to support developing nations between 2012 and 2015.

"We need predictable long-term funding," Hanne Bjursrom, a Norwegian cabinet minister who heads the Norwegian delegation, told Reuters. "But this isn't a document that says 'this and this is how it should be done'."

However, the funding proposals were criticised by one of the world's leading investors, George Soros, who told the Associated Press that the limited scale of the funding being offered by rich nations "could actually wreck" the Copenhagen Summit.

He said that the $10bn a year proposal for the next three years being considered by rich nations is "not much, it's not sufficient".

He proposed today that the funding gap could be partially bridged by extending the International Monetary Fund's (IMF) responsibilities to cover the financing of clean energy projects in developing countries, although he acknowledged that changes to the IMF would face opposition from Congress.

In related news, Sweden today said it would provide €800m (£724m) to any new "fast-start" climate fund agreed at the Copenhagen talks. The move comes ahead of an expected announcement from the EU in which it will detail how much it will contribute to a new early stage fund, designed to provide poorer nations with support until further funding mechanisms are introduced from 2020.

The attempts to repair the damage done by the leaked Danish Text also continued yesterday with Denmark releasing a new draft text that is believed to contain a number of compromises.

According to Guardian reports, sources close to the Danish prime minister, Lars Løkke Rasmussen, suggested that the latest draft text pledges to work towards the continuation of the Kyoto Protocol and, in a response to criticism that it is undermining the UN talks, refers to the ongoing formal negotiations.