London (Platts)--7Sep2010/652 am EDT/1052 GMT

UK climate change minister Greg Barker is set Tuesday to launch the Capital Markets Climate Initiative--a new forum which aims to dismantle barriers to clean investment in developing countries and make London the world leader in low carbon finance. The CMCI aims to help unlock the private sector's role in helping to provide $100 billion of new green investment required annually by 2020 to fight climate change in developing countries. Under the new initiative, the UK's Department of Energy and Climate Change is bringing together key City players with international financiers and policy makers. "The vital role of capital markets in tackling climate change has been overlooked for far too long," Barker said in a DECC statement Tuesday. "The finance needed to help developing countries become low carbon isn't flowing at the rate and scale needed." He added: "However, this is a huge opportunity for the UK financial services industry to grab a share of a completely new international market that will be worth billions in the years to come. "We need to put the sub-prime disaster behind us and focus back on investment in genuine wealth creation in ways that don't damage the environment." London's Mayor Boris Johnson wants the capital--already a major center for carbon trading--to cement its place at the cutting edge of global clean investment. Said Johnson: "That's why City Hall has teamed up with others to set up the GBP100 million ($154 million) London Green Fund to provide investment for climate change programs and to prove their commercial viability." "I want to ensure London's competitiveness as a leading global city and the Capital Markets Climate Initiative is a great opportunity to help us do that," he said. The London Green Fund is made up of contributions of GBP50 million from the London European Regional Development Fund Program, GBP32 million from the London Development Agency and GBP18 million from the London Waste and Recycling Board. The CMCI was set for launch Tuesday at the London Stock Exchange. LSE chief Xavier Rolet said the exchange was "already home to over 100 clean tech firms, with our market's deep pool of equity capital powering the development of low carbon companies from around the world." He added: "But we want to do more, and by working together, building on the UK's leadership in green technology and harnessing the global expertise gathered here today, we can help build a vibrant business environment for the low carbon age." Several major economies agreed in Copenhagen in December 2009 to work toward delivering $100 billion/year of funding by 2020 to help developing countries cope with the physical effects of climate change. Many governments agree that most of this aid will have to come from the private sector. The International Energy Agency estimates that total investment of $1 trillion/year will be needed by 2030 to reduce emissions by 50% by 2050. From 2005-09, investment in clean energy grew by 230%, with $162 billion invested globally last year. --Frank Watson, frank_watson@platts.com Similar stories appear in Emissions Daily See more information at http://www.platts.com/Products.aspx?xmlFile=emissionsdaily.xml