Due to the EU’s reaffirmation earlier this month to reduce CO2-emissions by 20% by 2020, on January 1, 2013, 10,000 E.U. power plants and energy-intensive factories will have to buy certificates for emissions of carbon dioxide.

It’s relevant to African countries in several ways, but particularly because it is likely that implementing this policy will generate extra resources for Africa to adapt to a changed climate and make progress towards the MDGs.

The policy creates a whole new stream of revenues for EU-governments and the tug-of war over how to use these revenues has already started. Usually, Africa is not on the top of the agenda for European politicians when they talk about spending. However in this case, several particularly good arguments support the idea that a significant part of these resources should be spent in Africa.

Most compelling is that African countries have contributed the least to the current climate change, yet they will be hardest hit and are the least prepared. Fairness demands that the industrialized countries support African countries in adapting to these new challenges. In addition, EU-countries have their own interest in making adaptation funding – funding that will help countries adapt to climate change – available to developing countries: The global climate deal, which the EU is championing, will be very weak unless developing countries and emerging markets receive additional assistance to adapt to the consequences of climate change already being felt, and can successfully embark on a “clean development trajectory”.

To reach the emissions reduction goal, the EU will implement a complex auctioning system of CO2 emission certificates after 2013. Power plants, factories, and other big emitters, who together are responsible for 50% of total CO2-emissions in the EU, and are already involved in the cap-and-trade-system, will have to purchase emissions certificates for some, if not all of their emissions. Energy-intensive industries such as cement factories will receive certificates for free.

The question remains: How much does the EU have to offer for “adaptation financing”? When this system becomes operational in 2013, it will generate between 25 and 35 billion Euro annually across the EU. The European parliament has started an initiative to make sure member states spend 25% of these revenues for adaptation measures in developing countries. While many member states seem to find this rather a lot, Germany is setting an important precedent. Not only was it the first country to start auctioning emissions certificates in 2008; it also will spend 25% of that revenue for ODA-relevant programs in 2009. If other countries follow this example, between 6.25 and 8.75 billion Euro could be raised annually for developing countries.

-Andreas Hübers, German ONE