G8 push for climate funds

 
Last Updated: Saturday 04 July 2015

finance ministers of G8 countries recently supported setting up multi-billion-dollar funds to combat climate change in developing countries. Civil society groups and developing countries have, however, criticized the funds placed under the World Bank, saying they might be used for subsidizing carbon-intensive technologies. They want them to be under the un Framework Convention on Climate Change (unfccc).

Proposed by the us, uk and Japan last year, the funds now go under the generic name of Climate Investment Funds. One is a Clean Technology Fund to address mitigation; the other a Strategic Climate Fund that will include adaptation projects.

Civil society groups said there was no clear definition of what "clean technology" meant. There are concerns that the money under the Clean Technology Fund would be directed toward financing large-scale coal plants, said a declaration signed by 121 civil society groups, which included Bretton Woods Project and Friends of the Earth. They pointed out, as an example, the recent approval of a us $450-million loan by the International Finance Corporation (ifc) for the 4,000 mw Tata Mundra coal power plant in Gujarat that burns coal more efficiently. ifc is a member of the World Bank Group, the largest multilateral lender for fossil fuel projects.

The groups who signed the declaration said public finance was meant to combat climate change and not subsidize carbon-intensive technology even if that technology reduced emissions marginally. The fund, worth us $5-10 billion, would also pay to capture carbon dioxide from the power plants and bury it underground, a technology that did not yet exist, said the groups.

Both funds will partly disburse money as loans. The groups said loans would further indebt poor countries as they tackle climate change caused by the very countries giving the loans. Developing countries under the G77 and China said that such large sums of money should come under the unfccc, and not the World Bank. They added that the bank's proposal would undermine the unfccc process.

The funds may be approved during the July 7-9 summit of G8 in Japan.

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