Bali Island, Indonesia - Money was the focus Tuesday at a UN climate conference after warnings about how much global warming would cost and how poor nations would bear the brunt of climate change. In their first significant agreement, participants at the talks on the Indonesian island of Bali agreed to implement a climate change adaptation fund, which would help developing nations adapt to the adverse effects of climate change, such as drought, floods and crop failures. Under the agreement, disbursements would begin from the fund, which was a key part of the 1997 Kyoto Protocol, the world's first treaty that mandates cuts in greenhouse gas emissions. About 67 million dollars has accumulated in the fund, which is financed by a 2-per-cent levy on transactions under the Clean Development Mechanism, whereby rich countries receive carbon credits, which helps them meet their targets to cut greenhouse gas emissions, provided they invest in clean-energy projects in poor countries. The fund is to be administered by the Global Environment Facility, which donor governments established 16 years ago to fund conservation projects. The World Bank is to act as its trustee, and a 16-member board, drawn from rich and poor Kyoto signatories, is to oversee it. The decision about the adaption fund was the first important one to emerge from the talks, which aim to establish a "road map" that would lay the groundwork for an expected two years of talks to draft a new global climate change treaty to replace the Kyoto Protocol, which expires in 2012. Despite the progress at the negotiations, the lead author of a study commissioned by the United Nations warned that much more money is needed to help poor countries deal with the effects of climate change. Rich countries would need to contribute 86 billion dollars annually by 2015, at the latest, said Kevin Watkins, author of the independent Human Development Report. "The world's poor are not responsible for global warming," he said. "Having created the climate crisis, developed countries must face up to their responsibilities, including the responsibility to protect the potential victims." The report, commissioned by the United Nations Development Programme, warned of an "adaptation apartheid" if rich countries invest in new, "clean" technology and the world's poor or left to "sink or swim." It was released three days before the two weeks of Bali talks are due to end. Another fund aimed to benefit poor countries was announced Tuesday. The World Bank is to disperse money that would make the protection of tropical forests a lucrative undertaking for developing countries. About a fifth of the world's greenhouse gases are created by deforestation, which releases carbon dioxide that is absorbed and stored by trees. Tropical forests are located primarily in developing countries, where such activities as logging and slash-and-burn agriculture provide much-needed income. Such nations have demanded they be compensated for the lost income if they chose instead to conserve their trees. The World Bank fund aims to do that, World Bank President Robert Zoellick said Tuesday on Bali, adding that countries around the world have pledged 160 million dollars to the fund but 300 million dollars are needed. He said 30 countries had already shown an interest in the fund. "There is now a value in conserving, not just harvesting, the forest," Zoellick said. Meanwhile, on the sidelines of the Bali conference - which is bringing together government delegates, scientists and environmentalists from nearly 190 countries - finance ministers from about 20 countries met to discuss how to boost the financial response to global warming. Indonesian Finance Minister Sri Mulyani Indrawati said as the two days of talks opened that ministers would discuss and assess possible costs of climate change and its implications on development policy. Although the ministers' talks were not framed as a pledging session, Indrawati said the United States had finalized a commitment to forgive about 20 million dollars in Indonesian debt in exchange for forest conservation. Indonesia is one of the world's biggest emitters of greenhouse gases because of chronic deforestation. The country has already lost 72 per cent of its 123 million hectares of ancient rainforest, Greenpeace estimated in May. Indonesia also made the news Tuesday at the climate conference as one of the primary victims of climate change in 2006. The German environmental group Germanwatch said Asia bore the brunt of climate change last year, accounting for seven of the 10 worst-impacted nations. The Philippines, North Korea and Indonesia were the hardest-hit countries last year, according to Germanwatch's Global Climate Risk Index, which measures the impacts of weather-related disasters. Storms and flooding in the Philippines and Indonesia claimed the lives of nearly 1,300 people and caused damage into the billions of dollars, said Sven Harmeling, the author of the report. The countries rounding out the top 10 were Vietnam at number four, followed by Ethiopia, India, China, Afghanistan, the United States and Romania in an index that measured weather-related losses related to a country's gross domestic product and deaths in relation to its population. The non-governmental organization compiled its report from analyses by the Munich Reinsurance Co. Since 1980, the number of weather-related disasters has doubled, said Peter Hoeppe with Munich Reinsurance's Geo-Risks Research Department. In the same period, the frequency of flooding and other weather extremes, such as heat waves and droughts, have risen fourfold, he said. "This clearly shows an increasing danger," he said. Germanwatch said poor countries suffer far deeper impacts from climate change than industrialized countries but added, "Most of the world's regions should prepare for increasing risks from extreme weather events."
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