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G7 Source: G20 Progress On Climate Change Looks Difficult

ST. ANDREWS, SCOTLAND -(Dow Jones)- Significant progress on climate change issues at this weekend's meeting of finance officials from the Group of 20 leading economies looks very difficult, a source at a delegation from a member of the Group of Seven leading developed economies said Saturday.

The source said that developing countries in particular were throwing up roadblocks to progress ahead of next month's Copenhagen summit, which will seek to agree a new global deal on climate change.

The weekend's G20 meeting was tasked with making progress on the vexed issue of financing efforts by developing countries to combat climate change. That includes ensuring that any financial support given to developing nations would be used wisely.

The source also said that the communique to be issued at the conclusion of the meetings will reiterate the call for stimulus measures to stay in place until the global economic recovery is entrenched.

However the official said he expected the statement to give more specifics on planning for exit strategies, including a pledge to cooperate on the timing of withdrawing antirecession measures.

Another official said that, as usual, the G20 communique would not include any specific reference to currencies.

-By Laurence Norman, Dow Jones Newswires; 44-207-842-9270; laurence.norman@ dowjones.com

ST. ANDREWS, Scotland -(Dow Jones)- The Group of 20 advanced economies should consider applying a global financial transaction tax to provide insurance against future banking crises, Prime Minister Gordon Brown said Saturday.

Embracing an idea that has long been called for by some developing nations and others, Brown said the G-20 should discuss whether it needs some kind of " insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global financial transactions levy."

Brown strongly conditioned his proposals.

He said Britain would not adopt such a plan "unless others move with us together."

He also said the tax would have to be "nondistortionary to avoid damaging reductions in liquidity, inefficient allocation of capital and the temptation of avoidance."

He also said any tax must not undermine efforts to stabilize the financial system and that the contribution from the financial sector must be "fair" and " measured."

In the past, the U.K. has leaned against the idea of a Tobin tax, which would have seen a financial transaction tax used to increase support for developing nations.

-By Laurence Norman and Joe Parkinson, Dow Jones Newswires; 44-207-842-9270; laurence.norman@dowjones.com

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