Brown urges G20 finance ministers to act on tackling cost of climate change

Gordon Brown today urged world finance officials meeting in Scotland to agree on bearing the cost of fighting climate change.

At the G20 meeting he also called for consideration of a tax on financial transactions to insure against another crisis.

He told the ministers it was time to consider a form of global financial levy such as an insurance fee on transactions or contingent capital arrangements.

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Enlarge   gordon at the G20

Gordon Brown talks to the Chairman of the U.S. Federal Reserve Ben Bernanke (back to camera), U.S. Treasury Secretary Timothy Geithner (right) and Danish Prime Minister Lars Lokke Rasmussen, during a break at the G20 finance ministers meeting

alistair darling

ST ANDREWS, SCOTLAND - NOVEMBER 06: Chancellor of the Exchequer Alistair Darling arrives for the evening dinner at the Fairmont Hotel, on November 6, 2009 in St Andrews, Scotland. Some of the world's finance ministers will gather at St Andrews for a G20 summit where they will discuss aims at solving the global economic recession. (Photo by Geoff Caddick / WPA Pool / Getty Images)

Brown, the meeting's host, said it was time "to discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society."

But he said Britain would not act alone, and that any measures must be implemented by all major financial centers and should reinforce existing measures to enhance the stability of the international financial system.

The meeting at St. Andrews in Scotland is Britain's last as host, and Britain has used it to advance issues it views as critical to future world economic growth.

Brown's comments bolster earlier calls from former German Finance Minister Peer Steinbruck for a global tax on all cross-border financial transactions.

Critics argue that measures such as the so-called Tobin tax - a flat tax on currency transactions named after the Nobel Prize laureate James Tobin - can dry up world liquidity.

Supporters suggest they could protect countries from spillovers of financial crises and possibly assist poorer countries in the battle against climate change - another issue being pushed by Britain at the gathering in the university and golfing town of St. Andrews in northeast Scotland.

Treasury chief Alistair Darling urged the officials to reach an agreement on bearing the cost of fighting climate change before a UN summit on global warming next month.

Darling said officials need to agree on a finance package to help poorer nations develop green industries and adapt to climate change.

"I think that it really is imperative that when we reach the end of the day, that we have shown that we have made some real progress in dealing with what is a very real and urgent problem now," Darling said. "We will do everything that we can to reach that agreement in advance of the Copenhagen meeting."

There have been disagreements about which forum was the most appropriate place to discuss funding to fight climate change.

The push to put it on the agenda here reflects concern that nations will fail to agree in Copenhagen on Dec. 6 on a successor to the Kyoto treaty limiting carbon emissions.

"It really is important ... that we as finance ministers are engaged in this, because if there isn't an agreement on finance ... then the Copenhagen agreement is going to be much much more difficult," he said. The G-20 represents around 90 percent of the world's wealth, 80 percent of world trade, and two-thirds of the world's population.

The EU has said that there should be a €100 billion annual package of public and private finance by 2020 and has urged the U.S. to lay out its position.

"We need further progress, the Americans have to be more specific and also more clear about their contribution," Swedish finance minister Anders Borg said on Friday. Sweden currently holds the EU chair.

But the Obama administration has been preoccupied with prickly domestic issues such as healthcare.

The climate issue has been the focus of protests around St. Andrews, a university town on the northeast coast. A "People's G-20" is planned for the beachfront on Saturday after a small group of protesters blocked the coastal road Friday night between the town and the nearby resort where the meeting was held by chaining themselves together.

There are also divisions among officials over attempts to secure future global growth.

Host country Britain, still mired in recession, is keen to continued international effort to support a still fledging recovery, while other G-20 nations, including the United States, Japan and Germany, want to debate ending measures to boost growth.

The finance ministers and central bankers are trying to find a way to make good on a pledge by world leaders at their September summit in Pittsburgh to subject their economic policies to the scrutiny of a peer review. That process would determine whether each country's efforts were "collectively consistent" with sustainable global growth.

The goal is to avoid repeating problems like huge trade deficits and credit-fueled consumption in the U.S., and massive trade surpluses and savings in China and elsewhere. China's appetite to fund U.S. debt by buying Treasuries was seen as playing a major role in fueling the U.S. housing boom and subsequent collapse.

The G-20 is comprised of Argentina, Australia, Brazil, Britain, Canada, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the rotating EU presidency.

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