While striving for an international climate deal in Paris this year, the EU risks losing the faith of the world’s poorest countries, as the Commission fails to contribute to prestigious climate fund.
In the international business district of the South Korean city Songdo, an 86,000-square-meter, shard of glass rises 33-storeys above the ground. The “I-Tower”, as it was named before it opened in late 2013, houses one of the most internationally talked-about, global climate initiatives of the 21st century: The Green Climate Fund (GCF). A UN-initiated, international money tank with the objective of collecting capital to support the world’s developing countries fighting against the impact of climate changes.
In the past year the GCF has managed to collect billions of dollars from countries all over the world; from the United States in the west, to Japan in the east. Several individual EU member states, such as Belgium and Spain, have donated substantial amounts too.
To the bewilderment of many international observers, the European Union, as an institution, is absent on the list of contributors. Saleemul Huq is just one of these critics. He is from the International Institute for Environment and Development and is an expert on the world’s least developed countries:
”Well, it undermines the faith in the EU as a trusted partner in negotiations”, he says, referring to the supporting role towards developing countries, which the European Union has traditionally taken pride in playing during international climate negations. He calls the fact the Commission has not contributed to the GCF “a disappointment”:
”Generally, the developing countries have a good impression of the EU as a progressive group in the negotiations”, he says: “The EU has always been a supporter of providing finance, and therefore we were looking to them to be amongst the first to contribute to the GCF, which is where the funding needs to come through at the moment.”
A missed opportunity
The GCF was filled to the brim with bright green ambitions when it was formally established during an international UN climate summit, in the Mexican city of Cancun, a little over four years ago. Rich, post-industrialised countries, with Europe being the forerunner, recognised that the developing countries would need financial assistance to tackle the impact of climate change; support to handle drought or floods and investments in a long-term sustainable development of the undeveloped societies.
In itself, the formation of such a fund is no historical event, but its level of ambition stood out. The idea for the GCF was to become the main vehicle for reaching the UN’s “100-billion-target” promising that developed countries would give funding to developing countries facing the practical and financial challenges of climate change. The goal to have a fund that is abie to collect and effectively disburse large sums of funding so that in total $100 billion comes available from 2020 and onwards. Taking into account that in total $10 billion were pledged for a four year period by contributors to the fund last year, it seems that there is still quite a long way to go to reach that target. This is despite the fact that even less-industrialised countries such as Peru and Columbia donated money.
Thus, 2014 could have been an ideal timing for the EU to step in and top up the prestigious, but semi-empty, climate fund with additional aid. Climate organisations agree that there would have been plenty of valuable PR for the EU to gain by contributing to the Green Climate Fund. Maeve McLynn, who is the Climate and Development policy coordinator at the umbrella organisation “Climate Action Network Europe”, says:
”I think, it is a missed opportunity for the EU to demonstrate its kind of serious commitments to funding climate action, especially in a more well-known way. The Green Climate Fund got quite a lot of media attention this year, and therefore I think it is unfortunate”, she says.
The EU contributing to the GCF, will not only lend a, financial, helping hand to the regions in climate-need. It will just as much be a symbolic gesture expressing the EU’s willingness to take on the common climate responsibility; a strategically wise move in order to gain the trust of the developing regions of the world. A trust, which according to climate experts, could turn out to be crucial in order for the EU to be able to pull in the direction of a common, international climate deal at the climate summit later this year in Paris.
No chair – no cash
The EU contributing to the GCF is, however, not going to happen anytime soon. On the one hand, this may be due to the fact that the EU is bound by a budget, which, to a large extent is fixed within a seven-year time frame, not leaving much space for additional financial donations. On the other hand, the bottom line is, that the Commission simply won’t pledge any funding as long as is does not have a chair on the board of the fund.
The board of the GCF consists of 24 seats in total. Half of the members are representatives from developed countries, such as Germany and Norway. The other half, are representatives from the developing countries, such as for example Benin and Cuba. It is the board members who agree on the overall strategy of which countries, programmes or specific projects they want to send the money from the GCF.
According to Anna-Kaisa Itkonen, spokesperson for the European Commissioner of Climate Action and Energy, the EU initially wished to become a board member, but was “explicitly excluded” from getting a separate seat. She further underlines the fact that the Commission is accountable to the two other European institutions, the European Parliament and the Council, for the money it spends from the EU budget, and that it therefore, in order to commit any money ”should be able to fully participate on equal terms with all other donors in the decision making of the GCF”.
The explanation appears, nevertheless, to go deeper than that.
Internal power struggle affecting external affairs
The Commission not allocating any money for the GCF is basically a matter of competence, that is, the division of power within the European Union: Who has the right to act and to spend within a certain policy area – is it the individual member state, or the European Commission?
When speaking in international bodies, for example the participation in an international climate fund, the division of power between the EU institutions and individual EU Member States is far from straightforward. There is an ongoing dispute between those politicians who think the EU should “speak with one voice”, acting like a single unity towards the outside world, and those, who argue that several issues, such as funding, continue to be a national competence of each member state.
This dispute tends to trigger conflicting opinions on who actually is allowed to represent the EU. According to Louise Van Schaik, EU-expert and Senior Research Fellow at the Cligendael Institute for International Relations in the Netherlands, in the Green Climate Fund, the Commission has lost the battle by not having obtained a seat and it is now linking this to not providing funding. She claims that other donors without a seat reason differently and trust their interests are well-represented by for instance other EU member states. Van Schaik even goes as far as to claim that the European Commission appears to consider the EU’s status in interantional bodies more important than saving the climate:
“I mean, the climate funding is now suffering from this, basically bureaucratic, institutional turf war on authority over external representation”, she says, explaining that the explicit exclusion of the EU from the board of the GCF appears also to be a direct result of other global players trying to limit the overall influence of the European Union by using its internal conflict strategically:
”In this case, the conflict undermines the EU’s leadership and credibility in climate change. It allows the US and Russia to exploit this, to play a dividing strategy towards the EU”, she claims.
Another possible explanation according to Louise Van Schaik?
The European Commission might in fact be acting consciously hesitant towards making pledges about additional climate finance, including to the GCF. The purpose may be strategical; to keep a wildcard in hand, until the international climate summit takes place in December and the real deal is sealed.
In approximately 11 months we will know, if the EU has played its hand right.