Global spending to combat climate change fell last year and remains far below the level needed to prevent its most dangerous effects, according to a report by the Climate Policy Initiative (CPI) yesterday.
Investment in renewable energy, energy efficiency and adaptation to climate change totalled US$359 billion, US$5 billion less than in 2011, as an economic slowdown hit state and private-sector budgets.
The International Energy Agency estimated last year that US$5 trillion of investment in clean energy alone was needed by 2020 to keep a rise in global temperatures to within 2 degrees Celsius.
Scientists say that threshold is the minimum required to avoid the most devastating effects of climate change, such as the melting of ice caps and catastrophic rises in sea level.
"Investment to combat and adapt to climate change is happening around the world, but it's short of where it needs to be, and efforts to grow it have not been successful enough," said Thomas Heller, an executive director of the CPI, which promotes efforts to wean economies off the fossil fuels that scientists believe are almost certainly the main cause of industrial-era global warming.
Private investment accounted for 62 per cent, or US$224 billion, of total global climate investment last year, while public sources of finance such as incentives, loans and project investment accounted for the rest, the report said.
Rich countries invested US$177 billion last year in climate change activities, while developing countries invested US$182 billion, it said.
Meanwhile, the Organisation for Economic Co-operation and Development said this month that governments around the world spent US$523 billion in 2011 on subsidising fossil fuels.
Next month, more than 190 governments will meet in Warsaw, Poland, for United Nations climate negotiations, hoping to make progress on a deal to cut greenhouse gas emissions that should be signed by 2015.
On the agenda at that meeting will be the question of raising money to help developing countries tackle and adapt to climate change.
Governments have already agreed to raise US$100 billion a year by 2020, but a fund set up to channel some of that money is still not operational.
At a conference in London on Monday, UN climate chief Christiana Figueres said most of the money needed to combat climate change would have to come from the private sector.
"US$100 billion is the tail that is going to wag the dog. The financing needed is US$1 trillion a year - that is what needs to be mobilised," she said.