COPENHAGEN - Billionaire financier George Soros told Reuters on Thursday he had found a way to unlock a stalemate on climate finance using International Monetary Fund assets.
Soros wants to invest $1 billion of a total of his own $25 billion funds in low-carbon assets.
U.N. talks in Copenhagen, meant to agree the outline of a new climate treaty to succeed the Kyoto Protocol, are stuck on splitting the bill to cut carbon emissions and prepare for more droughts, floods and rising seas.
Poorer nations want rich countries to spend 1 percent or more of their national wealth on emissions cuts in the developing world, or at least $300 billion annually, about double the closest estimates by industrialized countries.
I've found a way for someone else to pay ... to mobilize reserves that are lying idle, said Soros, on the sidelines of the December 7-18 conference which world leaders will attend in the closing two days.
The whole conference might break down because of this, and this $100 billion fund I think could just turn this conference from failure to success.
Developed countries could invest a portion of $283 billion IMF special drawing rights (SDRs) in carbon-cutting projects in developing nations, he said.
The IMF made the rights available to help combat the recession, by unlocking financial liquidity after panic froze debt markets -- including more than $150 billion for the 15 biggest developed economies, Soros said.
The low-carbon projects themselves would pay the interest on the proposed $100 billion to be spent over the next decade, from earnings which would depend on a carbon price for example under a global market in offsets and other carbon emissions permits.
IMF gold reserves would guarantee the principle and interest. Soros acknowledged a series of obstacles to his proposal, including U.S. Congress approval, IMF director approval and a global carbon price.
The IMF directors are not keen to use it (gold reserve). If you on the board of directors you like to have this nice substantial reserve to sit on so they won't actually do this of their own free will, he said, adding political will was needed to drive his initiative.
Other ideas on the table to unlock climate finance include a levy on transport fuels in shipping and aviation, a tax on rich nation carbon emissions rights or a fund raised from countries according to their contribution to climate change and ability to pay.
(Reporting by Gerard Wynn, Editing by Janet Lawrence)