U.S. Climate Funding Shortfall Hampers Bid to Cut Developing Countries’ Emissions

As the negotiations in Egypt at the summit known as COP27 enter crunchtime, developing countries are demanding a new fund that would pay for the damage linked to climate change that is sudden or potentially irreversible. The European Union on Thursday said it was willing to create a fund on the condition that wealthier developing countries contribute money as well. That puts U.S. negotiators in a bind: Any money they pledge may not make it through Congress.

“Their key concern is that they don’t want to have a repeat of a situation where they make a pledge and can’t deliver on it,” said Joe Thwaites, a climate finance expert at the Natural Resources Defense Council, a Washington-based environmental group.

Money from wealthy countries to poorer ones underpins the U.N. negotiations. Developing nations have agreed to limit their greenhouse gas emissions, even though emissions from developed economies are responsible for most of the warming that has occurred since the dawn of the industrial era.

In exchange, developed nations have agreed to help pay for poorer ones to adopt renewable energy and adapt to the effects of global warming. The U.S., which is responsible for around a quarter of all historical greenhouse gas emissions, the most of any country, is expected to lead in providing finance under the U.N. system.

The U.S. experience with the Green Climate Fund looms large. It is the flagship U.N. facility for delivering climate finance to poorer countries. The U.S. has $2 billion in arrears to the fund; an Obama administration pledge to provide $3 billion was canceled by President Donald Trump after $1 billion was paid. Mr. Trump said the fund was “costing the United States a vast fortune.”

President Biden’s request of $1.25 billion for the fund in last year’s budget was eliminated in the Senate appropriations bill amid stiff Republican opposition. “If anyone should be paying for a Green Climate Fund, it should be the Chinese communists, the world’s worst polluters—not American taxpayers,” said Sen. Tom Cotton (R., Ark.), who proposed an amendment that would block appropriations for the GCF and provide money to develop weapons to counter China.

The U.S. difficulties delivering climate finance have created persistent tension in climate talks, officials say. Developing countries repeatedly criticize wealthy ones for not meeting a pledge to provide $100 billion annually by 2020; they sent $83 billion that year, according to the Organization for Economic Cooperation and Development. The U.S. shortfall is a significant reason the target wasn’t hit, officials and analysts say.

At a meeting with Chinese negotiators who brought up the shortfall, Bas Eickhout,

a member of the European Parliament, said Europe has lived up to its financing commitments.

“I said: ‘This gap, the main part, is the U.S.,’” Mr. Eickhout said.

From 2016 to 2018, the most recent year data are available, Germany has provided $24 billion and France $14 billion in climate finance, according to U.N. data compiled by the World Resources Institute, an environmental group. EU institutions have contributed $18 billion.

The U.S. has contributed $6.5 billion. As a percentage of gross domestic product, its contribution was the one of the lowest of the 23 countries deemed developed economies under the U.N. climate treaty.

“The European Union is doing its fair share, but there are other major contributors who should be doing much more—the U.S. and others,” said Frans Timmermans, the EU’s climate envoy.

A State Department spokeswoman said negotiators from other countries understand the U.S. budget process. The Obama administration was able to pass significant sums of climate finance through Congress when Republicans controlled both houses of Congress, the spokeswoman said.

The talks were tested even further late Friday when John Kerry’s spokeswoman disclosed he had tested positive for Covid-19. The U.S. climate envoy, who is fully vaccinated, was experiencing mild symptoms and self-isolating, she said. Mr. Kerry was working by phone with his negotiations team and his foreign counterparts to complete the talks, the spokeswoman added.

The lack of funds from the U.S. has started to hamstring the Green Climate Fund’s investments. In the years after the fund launched in 2015, it struggled to spend the money that it had. The fund was still establishing operating procedures and took a long time to approve projects. Developing countries also strained to propose projects that adhered to the fund’s standards.

Now, however, the fund is disbursing cash as quickly as it is received, said Yannick Glemarec, executive director of the GCF. The fund programmed $1.5 billion in spending this year when it could have planned at least $4.5 billion with more resources, Mr. Glemarec said. Officials had to delay three projects at the fund’s last board meeting because of lack of funds.

“The re-engagement of the U.S. is very, very important, cannot be overstated,” Mr. Glemarec said, adding that the U.S. providing money would encourage other countries to step up their pledges. “Financial contributors are very gregarious. The more people you have in the room, the more they are willing to give.”

Write to Matthew Dalton at [email protected]