A professor from the Melbourne Business School in Australia has proposed an innovative plan to create a multi-billion dollar fund to provide financial assistance for carbon reduction initiatives in developing countries. Professor Gary Sampson has touted the plan as a positive version of "creative accounting", because it exploits the difference between the International Monetary Fund book value for gold and what can be earned by selling this precious metal on global commodity markets.

When countries first paid membership to the IMF in 1945, the fixed price of gold was US$34/ounce; yet in the economically chaotic 1970s, gold prices skyrocketed to US$900/ounce, giving member governments a chance to collectively agree to revalue the gold they held in their reserve banks so they matched the market value. As a result, wealthy countries hugely benefited.

"At the time of agreement in 1978 to abolish the official price of gold, three-quarters of the world's reserve asset gold was owned by seven countries - the US, Germany, France, Italy, Switzerland, the Netherlands and Belgium," said Sampson. "With central banks free to revalue their gold at market prices, the seven countries registered gains of a staggering US$358 billion.

"The per capita gains to the seven countries were US$553 on average and nearly US$6,000 for Switzerland. The equivalent figure for African countries was US$3 as they held just 0.2% of their reserve assets in gold."

After further analysis of the IMF gold plan, Sampson has now proposed using the US$91 billion difference between the IMF book-keeping value of gold (an estimated US$9 billion) and its street value, reported to be a staggering US$100 billion, as collateral for carbon reduction initiatives for developing countries.

According to the business school, G20 countries have already accepted the principle of using gold to finance international development. The 2009 G20 meeting in London, for instance, agreed to use US$6 billion of IMF gold sales to finance the 49 poorest countries of the world.

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