Don't need to be accountable for fast start fund: USA

Says it’s voluntary and transparency wasn’t a part of the original deal

June 11/ Bonn

By Aditya Ghosh

Bonn, June 11: The Big Brother slammed poorer countries at the United Nations Framework Convention for Climate Change (UNFCCC) meeting in Bonn, claiming it was unfair to put conditions of transparency and additionality on the fast start funds (FSF).  FSF was promised first in Copenhagen Conference of Parties (CoP) and then institutionalised in Cancun CoP by the developed nations to meet expenses of climate change mitigation and adaptation in poorer countries. The total value of FSF was to be US$30bn between 2010 and 2012 and then US$100bn a year by 2020.

In a meeting on the status of funds so far and money on the table, the US said the fund was purely ‘voluntary’ in nature where transparency and additionality were could not be demanded by anyone.

Japan, which has not committed any sum against its pledges of US$ 15000 million, said the country needed time to get out of the trauma of Tsunami before it could start making any contribution. Other countries which have pledged but not yet committed any funds to the coffer include Spain (pledge €375m), Sweden (pledge €800m), Switzerland (CHF140m), Australia (pledge AU$599m) and Canada (pledge CA$400m).

Significantly, all the donor countries have allocated a significant share of the funds to REDD (Reducing emissions from deforestation and degradation). The architecture of REDD is far from final and any money allocated thus would not have to disbursed till such time. Countries are also divided about issuing loans and not grants or aids as promised earlier. Japan for example made it clear that they thought loans worked better than aid or grant and they would primarily consider issuing loans. Last year, the 54 per cent of European Union’s contribution to the coffer was in the form of loans.

The United States also objected to discussions on how to raise US$100 billion a year to help poor countries build low-carbon economies and adapt to global warming. Instead, it wanted to continue discussing how to monitor and verify actions by China and others to lower emissions.

There are already contradictions over financing climate change mitigation. One of the main actors of global finance, the World Bank which has been made a trustee of the Green Climate Fund, has heavily escalated investments in fossil fuel use and exploration. In 2010 the Bank hit a new record in terms of its fossil fuel funding, totaling US$6.6 billion, a 116 per cent increase over 2009. US$4.4 billion of this total was invested in coal, also a record high, and a 356 per cent increase over the previous year.

Such parallel processes running at cross purposes would hurt any positive impact on the environment and on the negotiations as political interests would dominate the proceedings, said Economic Justice Program Coordinator Sebastian Valdomir of the Friends of the Earth International which released the report on World Bank.
“The World Bank is part of the climate problem, not the climate solution. Its conflicts of interest, and appalling social and environmental track record, should immediately disqualify it from playing any role whatsoever in designing the Green Climate Fund, and in climate finance more generally,” he said.