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Green Climate Funding

By:
Edward A. Reid Jr.
Posted On:
Jul 18, 2017  at  at 5:58 AM
Category
Climate Change

Numerous US corporations have stated that they are committed to efforts to mitigate climate change. Many of these corporations encouraged President Trump to remain in the Paris Agreement, which would include maintaining / increasing funding for the Green Climate Fund. These corporations apparently envision the potential to grow their businesses by offering their products and services to the developing and not-yet-developed countries, which would be recipients of climate change mitigation and adaptation funding from the Green Climate Fund.

This suggests a potential alternative source of US funding for the UN Green Climate Fund. US Corporations which have expressed commitment to mitigating climate change (and envision potential market development opportunities resulting from funding available through the UN Green Climate Fund) could provide funding directly to the Green Climate Fund. These funds could be provided from net profits, perhaps shared between retained earnings and dividends, with the approval of shareholders. Alternatively, the US federal government might choose to permit these contributions to be treated as market development expenses, which would make them tax deductible business expenses, which would transfer a maximum of 35% of the contributions to all taxpayers.

These corporations might make these contributions on the condition that the corporations manage the allocation of the funds to the recipient nations, consistent with the guidelines adopted for the Green Climate Fund. This would allow the corporations to use their management skills and experience to maximize the benefits of their funding for the recipients and their corporate interests. It would also avoid surrendering control of the funds to the opaque and demonstrably incompetent UN bureaucracy. Direct corporate involvement could also dramatically reduce the potential for funding to be siphoned off by the governments of the recipient nations.

The following US corporations directly encouraged President Trump to remain in the Paris Agreement.

Corporation

Oper. Income ($M)

Net Income ($M)

1% of Gross ($M)

1% of Net ($M)

Adobe

903

629

9

6

Apple

71,230

53,395

712

534

Facebook

12,427

10,217

124

102

Gap

1,191

676

12

7

Google

15,403

12,733

154

127

Hartford

804

896

8

9

HP

2,496

2,279

25

23

Ingersoll Rand

1,572

1,492

16

15

Intel

12,874

10,316

129

103

Johnson Controls

6,447

1,679

64

17

Levi Strauss

462

291

5

3

Microsoft

20,182

16,798

202

168

Morgan Stanley

8,848

6,123

88

61

PG&E

2,181

1,402

22

14

Schneider Elec.

2,951

1,811

30

18

TOTAL

 

 

1600

1207

 

The table above demonstrates that a 1% allocation of after tax net income by the listed corporations could provide annual funding of $1.21 Billion per year to the UN Global Climate Fund; and, that a 1% allocation of gross revenues could provide annual funding of $1.6 Billion to the Green Climate Fund. Other large US corporations have also expressed support for the Paris Agreement.

Total net income of US corporations is approximately $1.8 trillion Therefore, it is reasonable to assume that contributions from US corporations could yield $5 - 20 billion for the UN Climate Fund. The question is whether US corporations are willing to put their money and their shareholders’ money on the line.

The US withdrawal from the Paris Agreement does not inhibit these corporations from making such contributions; and, US government treatment of these contributions as business expenses could offset a portion of the contributions. The Administration might consider encouraging major US corporations to make such contributions.