United Nations climate fund hits roadblock

The issue of hiking contribution in the United Nations’ “Adaptation Fund” to tackle climate change hit a stumbling block at a recent meeting of the finance ministers of G-20 countries, after India raised objections to plan of the developed countries.

Developed countries like France and Germany were ready to increase their contribution but insisted the amount be diverted from their aids and grants to developing nations. Finance Minister Pranab Mukherjee, leading the brigade of the developing countries, didn’t accept this proposal and maintained that developed countries should not reduce their monetary support to developing nations and it should pump in fresh fund for climate change.

According to a minister in the United Progressive Alliance (UPA) government, this issue will be again taken up during the coming G-20 summit at Pittsburgh in the US which will be attended by Prime Minister Manmohan Singh.

Mukherjee, after returning from the G-20 meet in London, told Business Standard: “Cost of mitigation and adaptation of the developing nations should be provided by the developed nations. But it should not be at the cost of other monetary support.”

The Adaptation Fund, set up under the Kyoto Protocol of 1991, is aimed at assisting developing nations to immunise themselves from the consequences of climate change. It has so far been dependent on the 2 per cent levy charged on every transaction on carbon development mechanism.

The fund requirement for adaptation, especially in developing countries, is expected to be close to one per cent of the GDP of rich nations. The fund, administered by the Adaptation Fund Board of the United Nations Framework Convention on Climate Change (UNFCC), today has very meagre funds to the extent of about $100 million, while the requirement is estimated to be $100 billion.

India’s stand in the past has been that the contributions of developed nations to climate change adaptation should be routed through the financial mechanism of the UNFCCC, which is currently operated by the Global Environment Facility and the Adaptation Fund Board.

Rich countries, on the other hand, have been confining their donations to bilateral assistance rather than to a fund administered by the UNFCCC.

The G-20 meeting in London was attended by the finance ministers of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK and the US. In addition, the European Union was represented by the rotating council presidency and the European Central Bank.