Rich nations failing to meet climate aid pledges

World's richest countries have pledged nearly $18bn to help poorer countries adapt to climate change, but less than $1bn has been disbursed

John Vidal, guardian.co.uk 20 Feb 09;

Developing countries have received less than 10% of the money promised by rich countries to help them adapt to global warming, an analysis by the Guardian has found.

The failure is fostering deep distrust between rich and poor nations and is seriously undermining key negotiations on a global climate deal.

The world's richest countries have together pledged nearly $18bn (£12.5bn) in the last seven years, but despite world leaders' rhetoric that the finance is vital, less than $0.9bn has been disbursed and long delays are plaguing many funds.

The lack of action is causing growing concern among diplomats and UN climate talks negotiators who have warned that a global agreement on climate change to succeed the Kyoto treaty is at risk if rich countries do not make the money available.

"It's a scandal. The amount the developed countries have provided is peanuts. It is poisoning the UN negotiations. What [the rich countries] offer to the poorest is derisory, the equivalent of one banker's bonus. It's an insult to people who are already experiencing increasingextreme events," said Bernarditas Muller of the Phillippines, the chief negotiator for the G77 and China group of developing countries.

The analysis has found that the poorest countries have received the least help from the rich. The UN's Least developed countries fund has disbursed only $47m in seven years. The analysis, based on data collected by the independent Overseas Development Institute in London and confirmed by the UN, has also found:

• Britain has pledged nearly $1.5bn but has so far deposited under $0.3bn

• Africa, the poorest continent, has received less than 12% of all the climate fund money spent in the last four years

• It can take poor countries more than three years to access money

• Most of the money promised for climate change comes out of official aid budgets, leaving less for health, education and poverty action

According to the UN, $50-70bn a year needs to be invested immediately to help the poor countries adapt to extreme floods, droughts and heatwaves, with much more needed later. "I recognise the frustration. Contributions to funds have been disappointingly low and the least developed countries have received very little. Without significant finance you will not get developing country engagement [in negotiations]. Funding is key to unlocking an outcome for the talks," said Yvo de Boer, head of UN Framework Convention on Climate change (UNFCC), which oversees the talks.

Rich countries have accepted their moral responsibility for global warming, and are legally obliged by the Kyoto protocol to provide finance to poor countries to tackle climate change - but there is no enforcement or targets. "The situation is becoming very serious. The sums are ridiculously small and whole system has broken down. The financial commitments are weak and there is a great gap between the promises and the reality. It is very risky for the UN negotiations and for mankind," said the Juan Lozano Ramirez, the Colombian environment minister.

So far 12 rich countries, led by the UK, Germany, Japan and the US, have pledged $6.1bn to two climate investment funds administered by the World Bank. But no money has been deposited in them and any money available will be in the form of loans, not grants, with stringent conditions on how the money is spent. A pilot project for eight countries has been announced but no money is likely to be disbursed for nearly a year.

The bank has set up four other climate funds but no money has been deposited in them. In the current economic crisis, analysts believe rich countries are likely to use delaying tactics and it could be several years before deposits are made. Poor countries do not want the World bank to administer money pledged for them, as they perceive it to be run in the interests of rich nations.

The second major source of funds is the UN, which through its financial arm - the Global Environment Facility (GEF) - distributes nearly $250m a year to poor countries for climate change projects. Nearly one-third of the $760m distributed in the last three years, has gone to China, India and Brazil. Less than $100m of this has gone to projects in the world's 49 poorest countries.

Criticism centres on the GEF-administered Least-Developed Countries Fund (LCDF). In seven years, rich countries have deposited $172m for this but only $47m has been disbursed, mostly in very small grants. A seperate climate adaptation fund for the poorest countries set up in 2002 has only financed 22 projects, together worth $50m.

Bonizella Biagini, a spokesman for the GEF said: "The LCDF was set up in 2001 but the UNFCCC only decided how to operationalise it in 2005. We expect at least 12 projects to be endorsed in 2009, on top of the three that have already reached that stage. To implement a project requires time to sharpen the problem statement, negotiate partnerships and prepare on the ground implementation. Clearly there is insufficient money to cover the needs for adaptation in the least developed countries."

A third source of climate funds are "bilateral agreements", between individual countries. Japan has pledged more than $10bn of official aid over five years but has so far deposited nothing. Spain has promised $528m but released only $85m. Norway, Germany, Australia and others have also pledged but released very little.

A spokesman for CSRL, a coalition of 70 Bangladeshi environment groups, expressed concerns on hard it is to release the funds: "Climate change financing is inadequate and complex. Of 15 projects that Bangladesh designed in 2005, only one has been approved by the GEF but this will only receive a US$3.1m. A co-financer will have to be found to finance the rest."

Alison Doig, a climate spokesperson for Christian Aid, said: "The money available for the poor is a fraction of the annual cost of climate change already happening in developing countries and less than 1% of the $2.8 trillion committed by rich countries to rescuing banks and stimulating economic growth. Diverting funds from development assistance to fight climate change means that the poor suffer twice. The funds are too small and not directed to the most vulnerable. So the poor are left to suffer, and there is less in the pot for poverty reduction actions."

Britain has pledged more than any other country except Japan. It has promised £800m in loans for the World Bank's environmental transformation fund, £50m to protect the Congo basin forests and £75m to help Bangladesh adapt. But no payments are believed to have have reached recipients yet. In addition it has paid $250m for climate change funds for 2006-10.

A spokesman for the UK Department for International Development said: "It is the world's poorest who suffer most and we expect the UK's first contribution to global climate change funds to take place imminently.Progress to date has been ahead of plan - at the end of January, Mexico, Egypt and Turkey were given the green light to apply for funding for clean technology projects and a further eight developing countries were offered funding for adaptation."

"People are feeling the effects of climate change now. We are very willing to do more, but it needs the rich to show more willing", said Muller.