Ahead of Global Talks, All Eyes on U.S. Contribution to Climate Fund

'It's like dominos. This is the first domino, and in order to get everything to fall in the right place, you have to start here.'

On Nov. 20, the U.S. and other wealthy nations will announce their contributions to the Green Climate Fund. The size of those pledges is crucial to guarantee developing countries' meaningful participation in the UN climate treaty talks, both next month in Lima and beyond. Credit: Benjamin Stephan

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Next month’s climate talks in Peru are a pivotal point in the push for global action on climate change. But it’s a far less publicized gathering in Berlin that holds the key to whether the Lima negotiations succeed—and whether a useful climate treaty might be possible in the end. 

That’s because the Berlin meeting, set for Nov. 20, is the first formal pledging conference for the Green Climate Fund. The fund’s job is to collect hundreds of billions of dollars promised to developing countries to help them limit or cut emissions and withstand the effects of global warming.  

At the meeting, the United States and other wealthy nations will announce multiyear contributions to the fund, and the size of those pledges is crucial. Many less-developed countries have warned that they cannot—and will not—offer meaningful emissions reductions without substantial funding from developed countries. The Lima meeting is to lay the groundwork for a climate treaty to be signed in Paris in late 2015.Berlin “is a good litmus test for Lima, because finance is really half of the equation to getting a climate deal,” said Karen Orenstein, a senior analyst at Friends of the Earth. “It’s like dominos. This is the first domino, and in order to get everything to fall in the right place, you have to start here.”

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The fledgling fund has pledges for just $2.9 billion so far, with two-thirds of that coming from Germany and France. Last month, Sweden pledged $550 million, the most generous per-capita promise to date. Developing nations, which have no obligation to contribute, have stepped up, with pledges already in from Mexico and South Korea, and others expected from Peru and Colombia.

Australia, which has abandoned many climate policies as it pushes coal exports, is resisting pressure to contribute. Canada has staked its economy on carbon-intensive tar sands oil development and is not expected to pledge.  

By the end of the Berlin session, the fund is supposed to have at least $10 billion in pledges—a lower target than the $15 billion goal that’s been floated by some. The commitment from developed countries is meant to ramp up to the already-promised $100 billion per year in climate aid by 2020.

“A lot of people are nervous,” said Liane Schalatek, who has attended all of the fund’s board meetings on behalf of the Heinrich Böll Foundation. “Anything that falls way short of the $10 billion…would be a disaster. It would impact the Lima negotiations extremely negatively.”

All Eyes on the U.S.

Much of the focus in Berlin will be on the United States, which last month said it intended to make a “very significant” pledge to the Green Climate Fund. The amount offered by the United States will set the bar for how much the United Kingdom, Japan and others contribute.

On Friday, four Democratic senators wrote to President Obama urging him to commit the United States to a “strong target” for emissions cuts after 2020 and to make a “substantial pledge to the Green Climate Fund.”

The letter was signed by Sens. Robert Menendez (New Jersey), Barbara Boxer (California), Ron Wyden (Oregon) and Patty Murray (Washington), who chair the Foreign Relations, Environment and Public Works, Finance, and Budget committees, respectively.  

All four of those committees have a role in U.S. climate change funding and policy. The powerful Appropriations Committee and the Foreign Relations panel, in particular, will have to approve any spending on the Green Climate Fund.

Come January, all of those committees will be chaired by Republicans, following last week’s midterm elections that saw the GOP win control of the Senate. The equivalent panels in the House are already controlled by the GOP.

A substantial U.S. pledge to the Green Climate Fund was already expected to be a challenge. The new Congress will make it tougher still, because it includes more climate-denying lawmakers, and it will likely put James Inhofe of Oklahoma in charge of the Senate’s influential environment panel. Inhofe is a climate change denier who wrote a book declaring global warming “The Greatest Hoax.”

Sen. Bob Corker of Tennessee is expected to head the Foreign Relations Committee, which has approved climate change aid in the past.

“There is a fear that the outcome of the midterm election will have a chilling effect on the size of the pledge that the U.S. administration is expected to make,” said Schalatek, who also helps maintain a comprehensive climate finance website.

Robert Stavins, director of the Harvard Environmental Economics Program, told Bloomberg News that U.S. money for the Green Climate Fund “is essentially a proposal that has a double bulls-eye on its back for conservatives…it combines climate change and foreign aid.”

Still, others noted that under the Bush Administration, the United States pledged $2 billion over three years to the World Bank’s smaller Climate Investment Fund. And since then, money has continued to flow to climate change projects and aid.

Whatever the United States offers in Berlin will have to top 2008’s $2 billion pledge to preserve the country’s credibility in the climate negotiations, according to Brandon Wu, senior policy analyst at ActionAid USA and an official observer representing non-governmental groups at Green Climate Fund meetings.

“That’s absolutely crucial for a good outcome in Paris, and I think everybody knows that,” Wu said. “The question now is what amount of money can the U.S. and other countries put on the table that would be seen as good enough to keep negotiations moving?”

Show Me the Money

Throughout the years of climate negotiations, developing nations have insisted that the United States, Europe and others—countries that are most responsible for global warming—shoulder the climate-related costs for poorer and more vulnerable nations.

Many of those nations are already suffering from deadly and disastrous weather events made worse by rising temperatures. They know there’s more of that to come, even if countries aggressively cut their greenhouse gas emissions.  

Representatives from the Philippines and elsewhere have taken to making impassioned pleas for action at a string of international climate meetings. Their message: Wealthy nations have an ethical duty to stop worsening the climate change that has already landed at the doorstep of poorer nations, and to provide the money to cope with future damage.

A skimpy Green Climate Fund at this late date in the treaty talks could make a host of nations—including small island nations, China and India—reluctant to fully participate. 

The hoped-for global treaty must have a yes vote and a climate action pledge from every nation involved in the United Nations-led negotiations. 

Gaston Browne, prime minister of Antigua and Barbuda, said in September that poor and small island nations are dismayed that their appeals have gone largely unanswered.

“[We] are frustrated because governments of the nations that are among the worst [climate] offenders delay in making their contributions to the Green Climate Fund,” Browne said during a speech at the UN Climate Summit in New York. “Demanding that small states, such as mine, take on more commitments without any financial resources or technology transfer is contrary to the United Nations Framework Convention on Climate Change. Worse…the demand is immoral.”

An Ambitious Mandate

At the urging of many developing countries, climate negotiators created the Green Climate Fund in 2010. It’s different from other climate aid programs because it has an ambitious mandate not merely to fund a smattering of projects but to help developing nations make a wholesale shift toward a future with low carbon emissions and the resilience to withstand the effects of climate change.

A host of other differences were built in to provide a more diverse governing board and a decision-making process that gives a stronger voice to the poorer countries the fund is meant to serve.

Those key differences include:

  • Equal representation on the fund’s board, with 12 representatives from wealthy nations and 12 members from developing, small-island and poorer nations ranging from China and Barbados to Zambia and Pakistan.

  • Board decisions are made by consensus. Many other funds are governed by “one dollar, one vote” systems that put the largest donors in charge.   

  • Adaptation projects to prepare countries for the effects of climate change will get 50 percent of the funding. To date, much more aid has gone to mitigation projects that limit or reduce harmful emissions.

  • More diverse funding sources, with large contributions from developed countries, as well as donations, loans and investments from private companies and others.

  • An emphasis on close coordination with recipient countries to make sure proposed projects are a good fit, that they can be efficiently carried out, and that safeguards are in place to make sure the funds are properly spent.

All those differences make the Green Climate Fund of particular importance to developing nations. There’s a sense that it can deliver funds more equitably and with more involvement of the receiving countries, said Wu of ActionAid.

“It’s set up well to implement projects that are more effective, with more stakeholder engagement and broader buy-in than other funds,” he said. “We want this fund to get resources, not just because it will help negotiations, but because it will actually make a difference for people.”