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US Climate Finance in Limbo, Risking 'Trust Gap' Before Paris

FILE - In this July 1, 2013, file photo smoke rises from the Colstrip Steam Electric Station, a coal burning power plant in in Colstrip, Mont. Colstrip is kind of plant called on by President Barack Obama's climate change plan to reduce carbon dioxide emissions.
FILE - In this July 1, 2013, file photo smoke rises from the Colstrip Steam Electric Station, a coal burning power plant in in Colstrip, Mont. Colstrip is kind of plant called on by President Barack Obama's climate change plan to reduce carbon dioxide emissions.

A looming federal budget confrontation and Republican hostility to UN global-warming talks threaten a U.S. down payment into a key climate-aid fund, money considered vital to a climate deal in Paris this December.

President Barack Obama had requested $500 million in the 2016 budget for the first tranche of its $3 billion pledge into a UN-administered Green Climate Fund (GCF) that would help poorer countries make a transition to clean energy technologies and adapt to climate change.

But Congressional Republicans have vowed to oppose that spending request, and the wider dispute between the President and Republicans over the federal budget has raised the possibility that Obama will not be able to guarantee that U.S. funding before the December summit. Some U.S. officials have started to warn island states and developing countries - among the fund's main potential beneficiaries - of the looming shortfall.

The fund is seen as a down payment by rich countries toward a longer-term climate finance package that would total $100 billion a year by 2020, an amount that developing nations say is a condition for them to sign onto any deal in Paris that would reduce global carbon emissions.

So far, 43 percent of the $10.2 billion pledged to the climate fund has not been fulfilled, with the United States responsible for most of that shortcoming.

"If there’s not a firm commitment to financing, there will be no accord, because the countries of the [global] south will reject it," French President Francois Hollande said this month.

A U.S. State Department official told Reuters that meeting its funding pledge is a "key administration priority" and said its ability to convert it into an actual contribution is "key to advancing U.S. interests globally."

"We are working intensively with Congress to make this appropriation happen," the official said in a statement.

But with just two months left before the Paris talks the funding faces stiff resistance.

The House of Representatives passed an appropriations bill this summer directly prohibiting the U.S. from funding the GCF.

And an aide to the Senate environment committee aide told Reuters that Republican senators plan new legislation this fall requiring Congressional oversight for GCF funding.

"Climate finance is an under-riding element of the UN talks that can either further propel this agreement or undermine it completely," the aide said. "The finance issue is a direct hook for the Senate to get involved in the climate talks process."

Republican Senator John Barrasso, chair of the Senate panel that oversees multilateral agreements, told Reuters he will push legislation to require any international aid related to climate change to require Congressional approval.

"It's hard to see an easy path to $500 million. It will be difficult, if not impossible, to have Congressional loose ends tied up by December," said Karen Orenstein, senior policy analyst at Friends of the Earth, an environmental advocacy group. “This can shift a lot of the plates in the negotiations.”

Trust gap

Tony de Brum, foreign minister of the Marshall Islands, said countries like his that will rely heavily on climate finance have no confidence that sum will be delivered.

"The fact that the United States — which originally put the $100 billion target on the table — is yet to make its own initial contribution to the GCF is a cause for concern," said de Brum. "This is a big, gaping trust gap that needs to be filled before Paris.”

Religious groups joined environmental organizations to press for Congress to approve the funding and have been lobbying since the August recess.

Reverend Mitch Hescox of the Evangelical Environment Network said his group has met with Senate Republicans such as Lindsay Graham, Lamar Alexander and Bob Corker on key committees such as appropriations and foreign relations.

“We are working with Republicans in the Senate to show them this is a moral issue for us,” Hescox said. “We are going to do all that we can to make sure these funds are appropriated and released.”

He said the group’s outreach showed some success in July when Republican Senator Mark Kirk voted to support an amendment to the Senate Appropriations Committee bill that would allow the U.S. to contribute to the fund, reversing a prior prohibition.

Developing countries warned U.S. officials not to use Congressional politics as an excuse for not living up to their financial commitments.

“The Americans always say: ‘You know how hard it is for us to deal with Congress on the budget.’” said Ronny Jumeau, UN ambassador of the Seychelles, a member of the Association of Small Island States negotiating bloc.

“Obama cannot come to Paris and not put money on the table. He’s got to put his money where his mouth is,” he said.

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    Reuters is a news agency founded in 1851 and owned by the Thomson Reuters Corporation based in Toronto, Canada. One of the world's largest wire services, it provides financial news as well as international coverage in over 16 languages to more than 1000 newspapers and 750 broadcasters around the globe.