UN’s $100 Billion Green Climate Fund Stalled by U.S., Saudi Arabia

Photographer: Francois Henry/REA

Smoke pours out of the Society of Heating in Grenoble, France. Close

Smoke pours out of the Society of Heating in Grenoble, France.

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Photographer: Francois Henry/REA

Smoke pours out of the Society of Heating in Grenoble, France.

The U.S., Saudi Arabia and Venezuela joined to raise concerns about the United Nations Green Climate Fund, delaying work on the mechanism aimed at delivering as much as $100 billion a year in aid to developing nations.

The objections raise the risk that the measure won’t be finished in time for the Dec. 9 conclusion of the UN global warming talks in Durban, South Africa. It’s one of the key proposals envoys from more than 190 nations are working to include in a package fighting climate change.

The move is a setback for the chances of an agreement in Durban. It follows comments from China and Brazil indicating they’re unlikely to sign up to a new deal unless industrial nations make new commitments on reducing fossil fuel emissions under the Kyoto Protocol, whose limits lapse at the end of 2012. The U.S., European Union, Japan, Russia, Canada and Australia are seeking a treaty that goes beyond Kyoto’s restrictions, capping output in China and India too.

“Reopening the text could jeopardize the fund because the text is the result of one year of negotiations,” said Stefan Krug, climate finance spokesman for Greenpeace International. “You’ll get a domino effect as everyone asks for changes.”

The Green Climate Fund’s delay opens a new set of issues that UN officials must clear up before ministers arrive for the conclusions of talks next week. They had hoped to win endorsement for the fund’s operational structure as early as today, leaving more controversial political issues, including the future of Kyoto, for ministers.

Brazil and China

Asked whether he could envision any agreement at the talks in Durban without industrial nations signing up to a new round of reductions under Kyoto, Brazil’s envoy said, “no.” China’s lead negotiator, Su Wei, said Nov. 29 that failing to extend the agreement would place the international system of climate rules in “peril.”

Yesterday, Maite Nkoana-Mashabane, the South African minister overseeing the annual round of climate talks, said she’d undertake “informal” consultations about how to overcome objections to technical details about how the fund will work. She stopped short of reopening the text for debate by delegates. Some delegations supported the measure as it stands.

‘Urgency’

“Given the urgency and seriousness of the climate change challenge, the operationalization of the Green Climate Fund cannot be delayed,” said Selwin Hart, the envoy from Barbados. “We will not support any effort to undermine or delay the operationalization of this fund here in Durban.”

The U.S., Saudi Arabia and Latin American nations in the Alba negotiating bloc say they can’t accept a draft plan for a green climate fund.

The draft raises “substantive concerns” and contains “errors and inconsistencies,” said Jonathan Pershing, a State Department envoy leading the U.S. delegations. He didn’t elaborate his concerns. The Venezuelan envoy, speaking on behalf of Alba, said the plan would hurt developing countries’ access to resources. Oil-rich Saudi Arabia wants to be compensated for the costs of addressing climate change.

“The Saudis want funding for response measures to be included. The response to climate change has economic costs, and they want to be compensated for the adverse impacts of the global response, e.g. on oil revenues,” Steve Herz, climate finance spokesman for the Sierra Club, said in an interview in Durban. “It’s a poisonous concept.”

Cancun to Durban

Countries agreed at UN talks in Cancun last year to work on setting up a green climate fund this year in Durban. It’s part of a broader agreement aimed at fighting climate change. A 40- member committee spent seven months drafting rules for the fund’s structure and governance. The fund is intended to channel an unspecified portion of climate aid that developed nations have pledged to ramp up to $100 billion by 2020.

Alba, which includes Bolivia, Venezuela, Nicaragua and Ecuador, called for the text to be reopened to debate at a meeting of all nations at the UN talks. That would open a “Pandora’s box” and may kill chances for a decision in Durban, said Singapore’s chief climate negotiator, Burhan Gafoor.

“All members of the committee wanted to design a thoroughbred race horse, and we ended up with a camel,” Gafoor said. “What we have may not be elegant, but it’s balanced and it’s sturdy.”

U.S. Position

The U.S. didn’t go as far as to call for more debate. Rather, Pershing said more work needs to be done and deferred the matter to Mashabane for resolution.

While Pershing didn’t specify the U.S. objections, Herz of the Sierra club said among them are the governance of the fund, which the U.S. wants separated from the United Nations.

“It’s going to be more difficult to fund if it’s seen as a UN body,” Herz said. “It’ll be difficult to get money out of Congress.”

Pershing said countries were “rushed” to approve the draft plan at an October meeting in Cape Town and a “small amount” of work still needs to be done that can be finished by the end of next week.

Introducing the document to the conference, Trevor Manuel, a South African minister who was one of three leaders of the drafting committee, said the plan is “balanced and presents a good middle ground.”

Venezuela and Alba

Venezuelan envoy Claudia Salerno said in an interview that Alba nations object to a clause in the document suggesting developing countries could also contribute to the fund.

“It can’t be that their presidents go to a meeting and offer this money, and now they want to put their hands in my pocket,” Salerno said, referring to a pledge made in Copenhagen in 2009 by leaders of industrialized countries to channel an annual $100 billion in aid to the developed world by 2020.

Chinese negotiator Su said in an interview yesterday that establishing the fund “is a benchmark for the success of the Durban conference.”

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net; Kim Chipman in Washington at kchipman@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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