Officials say Paris climate deal depends on effective GCF, but without cash warn they cannot invest in developing countries
By Ed King
The head of the UN’s flagship Green bank has warned it cannot start work as planned because leading backers including the US, Canada and Australia have not delivered funds.
An April 30 deadline for governments to send contributions passed with the Green Climate Fund (GCF) several hundred million short of a US$4.7 billion target.
This means it will have to delay plans to back green energy projects in developing countries ahead of this year’s UN climate summit in Paris.
“We now call upon all other governments to urgently finalise their agreements to ensure the Fund can start allocating its resources as planned,” GCF executive director Héla Cheikhrouhou told reporters in a press call.
Rules governing how the fund works stipulate that 50% of pledged support must be delivered before it can start allocating resources.
So far 42% of the $10 billion offered in 2014 has been signed off. The analysis published today by the GCF reveals the US is overdue on $1.5bn, Japan $750m and Canada $130m.
Domestic problems were to blame for the failure of some to deliver, said Cheikhrouhou. The US contribution is facing stiff opposition from Republicans in Congress.
Leading donors the UK, France, Germany and Sweden all delivered their contributions, as did Chile, Indonesia and Poland.
That represented progress Cheikhrouhou said, but it was not sufficient to ensure the GCF could start work on its first projects and programmes in the coming months.
Climate finance experts offered mixed views on the funding delay. Athena Ronquillo-Ballesteros from the World Resources Institute said the lack of contributions from some countries had been expected
“We are nearly 47-48% signed and I think donor countries are aware and willing to support each other to get to 50% if the US pledge is delayed,” she said.
A US donation was likely between summer and autumn, she added.
Janet Redman from the Institute of Policy Studies called for the US government to speed up its delivery, accusing lawmakers on Capitol Hill of favouring fossil fuels over green energy.
“It’s downright upsetting that the decision-makers in Congress who control the purse strings are perfectly happy giving billions of public handouts to oil, coal and gas, but drag their feet when it comes to helping those most in need,” she said.
Developing countries say they cannot commit to tougher greenhouse gas cuts unless they receive financial and technological assistance.
By December Cheikhrouhou said she hoped the GCF would be able to showcase a “diverse mini portfolio” of investments to demonstrate its effectiveness.
It would likely be an “essential ingredient” of a Paris deal, she added.
Wind, solar and energy efficiency projects are likely to dominate the fund’s early investments, but no decision has been taken on ruling out fossil fuel projects, to the anger of Green NGOs.
“There has been no discussion on technology that can or cannot be specifically be adopted by the fund,” said Cheikhrouhou.