ANALYSIS: Green Fund teeters on US challenge

By Pat Reber Nov 30, 2011, 11:34 GMT

Durban, South Africa - If there was one thing Durban climate negotiators were expected to handle well, it was the Green Climate Fund.

But by Tuesday, the second day of annual UN climate talks, even that prospect teetered on apparent misgivings the United States has about details that were worked out in meetings in Cape Town earlier this year.

Delegates from emerging economies which would benefit from the 100-billion-dollar annual fund - designed to help them adapt to global warming and develop clean technology - insist that the fund be finalized in Durban.

The United States has not explained its objections. The chief US climate envoy Todd Stern said last week that it was a matter of a few details that could not be sorted out under time pressure.

But his deputy, Jonathan Pershing, said Monday that the US had 'substantive concerns' that really needed to be addressed.

That would mean new discussions that some observers say would distract from the overriding issues at hand, such as the future of the Kyoto Protocol, which expires in 2012, and a hoped-for mandate in Durban to start new talks for a global deal to reduce carbon emissions.

Rashmi Mistry of Oxfam's South African office, who followed the Cape Town talks, indicated that the brave front put on the Cape Town talks by other negotiators, including South Africa, was an illusion.

'It sounded like it was quite tough,' she told dpa. 'The last hours were quite fraught and emotional.'

A major issue is Washington's demand that the private sector be given direct access to the fund - as a third and equal partner with the other two main targets of the fund, mitigation and adaptation, Oxfam officials said.

The majority of other countries insist that national governments decide the projects, said Oxfam's Tim Gore.

In addition, Washington wanted the fund to have a separate governance, while most other countries agreed that it should report directly to the Conference of the Parties (COP) of the UN Framework Convention on Climate Change (UNFCCC), Mistry said.

South African Foreign Minister Maite Nkoana-Mashabane has declared that the success of the Durban talks, which end December 9, depends on setting up the Green Fund, already agreed upon in Cancun and Copenhagen.

ActionAd International reacted with anger at the possibility of failure.

'It is scandalous that the USA is attempting to railroad negotiators from putting into action a climate cash plan agreed in Cancun last year,' said Henry Malumo, the organization's Africa policy and campaign manager, in a statement.

South Africa's Minister of Water and Environmental Affairs, Edna Molewa, dismissed concerns about the fund, saying that the two-day Cape Town meetings had produced a 'sufficient consensus' among major countries 'to take us forward.'

She said the reluctance of some 'ministers of finance' was not a 'threat.' She did not name the United States and Saudi Arabia, the other country that objected.

'What is left is to work on the sources of funding,' she said.

Financially hard-pressed richer countries are trying to figure out how to pry loose 100 billion dollars a year, and have indicated they will try to leverage it with private investments.

One potential source of money came forth on the sidelines Tuesday with the surprise declaration by international shippers that they would be willing to pay a green fuel tax.

The International Chamber of Shipping, which represents over 80 per cent of the world's merchant feet, joined forces with the activist groups WWF and Oxfam to call on delegates at the UN climate talks to discuss the issue.

'If governments decide that shipping should contribute to the ... Green Climate Fund, the industry can probably support this in principle as long as the details are agreed at the International Maritime Organization,' said ICS secretary general Peter Hinchliffe.

The proposal for a so-called bunkers tax emerged from a study by WWF and Oxfam, which found that a 10-per-cent tax on shipping fuel could generate 25 billion dollars a year, 10 billion of which would go into the Green Climate Fund.

The remaining 15 billion dollars would go to helping poorer countries afford the projected 0.2 per cent increase in costs of imports, Mistry said.

Another tax to be levied by the European Union on airplane emissions has sparked a furious row with the United States and other countries whose airlines fly into Europe.

The bunkers tax is seen as having more potential and being less contentious than the air tax, Oxfam has said.