Dec. 8 (Bloomberg) -- United Nations envoys are closing in on setting up a climate aid fund that will channel aid to developing nations while lacking any pledges for where the money will come from.
The pool of money is called the Green Climate Fund and is meant to channel an unspecified portion of a $100 billion in aid pledged by industrialized nations to developing ones by 2020. Christiana Figueres, the UN diplomat leading the talks, has said it must be a key outcome of two weeks of talks in Durban, South Africa that are due to end tomorrow.
The U.S., Venezuela and Saudi Arabia last week objected to a report laying out the structure and governance of the fund, delaying a final decision.
“It has made a lot of progress, it’s an area that’s among the most advanced in the negotiations, and I don’t have any reason to think that’s not going to conclude,” U.S. delegation chief Todd Stern told reporters today in Durban. “That’s going to get done. I’m confident of that.”
Stern’s comments echo those of envoys from Barbados, and Bangladesh, raising the prospect that the Durban talks, deadlocked over the thorny issue of the future of the existing climate treaty, the Kyoto Protocol, may result in the creation of a fund that’s prized by developing nations.
Source of Income
Even so, the fund will need to have sources of income, and developed nations have yet to pledge public funds. There’s a concern the fund shouldn’t be an “empty shell,” said Barbadian envoy Selwin Hart, who negotiates on finance for the 42-member Alliance of Small Island States.
“We need more signals from developed countries that they are willing to support this fund,” said Hart. “We can design a perfect institutional structure, but if there are no resources, it will not have the effect it must have.”
Hart said he’s “confident” the fund will be established in Durban, as did Bangladeshi negotiator Quamrul Chowdury, who said there is still stalemate on some outstanding issues.
Mexico’s environment minister said his country would like to host the fund’s secretariat because his country is a good “bridge” between the industrialized and developing worlds.
Germany also offered to host the Green Climate Fund and pledged 40 million euros ($53 million) for further operationalization and start-up costs.
U.K. Energy Secretary Chris Huhne said Britain intends to “support” the fund as soon as it’s operational.
“We have heard that there are some developed countries that are waiting for the fund to be adopted in Durban before they announce money that they will put in the fund,” said Silvia Merega, an Argentinian envoy who negotiates for the G77 block of more than 130 developing nations and China. “We are skeptical on the capitalisation. We think it is not going to happen immediately.”
The green fund’s structure was largely agreed before delegates came to Cancun, and shouldn’t be a stumbling block, according to Mark Lynas, climate change adviser to Maldivian President Mohamed Nasheed,.
“Setting up the Green Climate Fund isn’t a deal breaker,” Lynas said. “The deal breaker is whether any money goes into it.”
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