Doubts on $30 Billion Climate Aid Threaten UN Talks

Photographer: F. Carter Smith/Bloomberg

The UN talks involving more than 190 nations are working toward adopting a treaty in 2015 that would limit greenhouse gases starting in 2020. Close

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Photographer: F. Carter Smith/Bloomberg

The UN talks involving more than 190 nations are working toward adopting a treaty in 2015 that would limit greenhouse gases starting in 2020.

Doubts mounted about whether developed nations honored a pledge to deliver $30 billion in aid for fighting and defend against climate change after two analysts estimated different amounts had been paid out.

The question over how much finance was provided under the “fast-start” program has the potential to undermine trust between donor and recipient nations during two weeks of United Nations talks on a treaty to curb global warming. Aid is the linchpin of the talks starting today in Doha after industrial nations pledged in 2009 to channel $100 billion a year for climate projects by 2020.

“We can’t say if it was delivered or not because we can’t be sure,” Seyni Nafo, a Malian envoy who speaks for a bloc of African nations, said in an interview yesterday, referring to the $30 billion pledge. “The process of fast-start finance was supposed to build trust, but it created more tension and frustration that what was proposed was not delivered.”

Special Report: 2012 Doha Climate Change Conference

The European Union, U.S., Japan and other developed nations paid out $23.6 billion of assistance to poorer countries during the three years through 2012, falling short of the $30 billion promised in 2009, the London-based International Institute for Environment and Development said today. An estimate today from the World Resources Institute in Washington put the total paid at almost $34 billion.

A third estimate for the sum from Nick Robins, head of the Climate Change Center at HSBC Holdings Plc (HSBA) in London, valued it at $32 billion as of Oct. 25. Of that, $25 billion so far has been allocated to projects, HSBC said. Allocation doesn’t necessarily mean the funds have been paid.

Doubts

“While countries are on track to fulfil their initial pledges, there continues to be a lack of clarity around the exact definition of what can count toward fast start finance,” Cliff Polycarp a senior associate at the WRI said in a statement. “This leaves room for doubt as to whether these targets are indeed being met.”

The UN talks involving more than 190 nations are working toward adopting a treaty in 2015 that would limit greenhouse gases starting in 2020. Richer countries pledged aid for poorer nations struggling to cope with the impact of global warming as a first step toward worldwide limits on fossil fuel emissions.

With the three-year fast-start aid period ending this year, envoys in Doha must also ensure aid doesn’t end next year, by doubling pledges to $60 billion for the three years through 2015 and plowing $10 billion to $15 billion into a new Green Climate Fund that was set up at last year’s round of talks, said the environmental group Conservation International in Washington.

‘Empty Promise’

“The $100 billion figure must not be an empty promise nor the Green Climate Fund an empty bank account,” Fred Boltz, vice-president for international policy at the group said today in an e-mailed statement.

As well as falling short of their pledges, developed countries didn’t make good on plans to detail the destination and nature of their payments and make them more transparent, the International Institute for Environment and Development said.

“Without transparency about how and when rich countries will meet their climate finance pledges, developing countries are left unable to plan to adequately address and respond to climate change,” Timmons Roberts, a co-author of the IIED report from Brown University in Providence, Rhode Island, said in a statement.

The IIED is a London-based policy research organization founded in 1971 to advise individuals and organizations about sustainable development. It made an assessment of what each nation’s fair share of the aid would be, since there was no breakdown in 2009 of who would pay what. The IIED’s estimates are based on the historical emissions of the nations and the size of their economies.

Transparency Test

Only two out of 10 donors assessed by the IIED -- Norway and Japan -- paid out their “fair share,” according to the research, which collated data taken from reports submitted to the UN Framework Convention on Climate Change through May 2012. It didn’t include promises from the EU, Canada and New Zealand for an additional $3.9 billion or a U.S. commitment to pay an unspecified amount of aid during the period.

Only Switzerland was deemed to have passed a test of transparency in its payments. Metrics for transparency include spelling out what projects were funded, where they are, whether the aid is in loans or grant form and whether the money is destined to fighting climate change, known as mitigation, or defending against its effects, which the envoys call adaptation.

According to the IIED report, Japan led commitments with $9.6 billion, followed by the 27-nation European Union with $6.4 billion, the U.S. at $5.1 billion and Canada with $1 billion. Norway paid out $710 million, which the study estimated was almost five times its share.

Artur Runge Metzger, lead climate negotiator for the European Commission, said the EU has now come up with its final tranche of aid, bringing the bloc’s total to 7.2 billion euros ($9.3 billion).

“We certainly have fully delivered on fast start finance and honored our commitments,” Runge Metzger told reporters yesterday in Doha. “That’s not a small achievement, particularly if you take a look around in Europe at the public finance situation we’ve been facing for a number of years,” he said, a reference to budget cuts across the region.

‘Unmet Promises’

Even so, one of the eight “unmet promises” described by the IIED report is that the aid should be “new and additional,” over and above existing aid budgets when the promise was made at the UN talks in Copenhagen in 2009.

If the money were new, it would be reflected in higher aid budgets, according to the study. It cited a report by the Organization for Economic Cooperation & Development, which found aid budgets by OECD nations rose by $11.7 billion between 2008 and 2011. That covered all aid, for all purposes, including health and education.

Other unmet pledges include a failure to direct sufficient funding to the most vulnerable nations, an unequal division of payments that favored mitigation projects over adaptation, and a failure for all of the support to come in the form of debt-free finance.

“It is past time to meet the long-agreed principles: new and additional, predictable, and adequate climate finance,” the authors wrote. “Beneficiary nations are gravely concerned that fast-start finance must not be money reallocated from previous promises on basic needs, such as health and education.”

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

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

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