About USD 1 billion in loans under a UN initiative for poor countries to tackle global warming is going toward the construction of power plants fired by coal, the biggest human source of carbon pollution.
Japan gave the money to help its companies build three such plants in Indonesia and listed it with the United Nations as climate finance, The Associated Press has found.
Japan says these plants burn coal more efficiently and are therefore cleaner than old coal plants.
However, they still emit twice as much heat-trapping carbon dioxide as plants running on natural gas. Villagers near the Cirebon plant in Indonesia also complain that stocks of shrimp, fish and green mussels have dwindled.
Japan's coal projects highlight the lack of rules to steer the flow of climate finance from rich to poor countries, a critical part of UN talks on global warming, which resume today in Lima, Peru. There is no watchdog agency that ensures the money is spent in the most effective way, and no definition of what climate finance is.
Japan, a top contributor of climate finance, denies any wrongdoing and has done nothing illegal, there are no rules against counting such projects as climate finance in the UN system.
"There are countries ... That cannot afford to have other methods than coal," Japanese Foreign Ministry spokeswoman Takako Ito said. "For these countries, we'd like to provide the best method of reducing carbon dioxide."
However, UN climate chief Christiana Figueres, who was unaware that the Japanese-funded coal plants in Indonesia were labeled as climate finance, said "there is no argument" for supporting such projects with climate money.
"Unabated coal has no room in the future energy system," she told AP. "Over time, what we should be seeing is a very, very clear trend of investment into clean renewable energy."
Even the newly launched Green Climate Fund, a key channel for climate finance in the future, still only has vague guidelines on how to spend the money.
Board member Jan Cedergren said he didn't believe the fund would support fossil fuels but acknowledged no decision has so far been made.
In 2009, rich countries pledged that by 2020 they would provide USD 100 billion a year in climate finance. They agreed to come up with USD 30 billion over the next three years, with Japan providing about half.
An analysis of the 300 top climate finance projects during that period showed Japan was the only country to include direct support to new coal plants.
Japan's climate finance also included a USD 15 million development loan for a plant in Indramayu, West Java, and a dozen smaller coal projects in India, Indonesia and Vietnam.
Those were identified as coal projects in documents submitted to the UN, while the larger projects in Paiton and Cirebon were not.
Japanese officials said there was no specific reason for the different labels.
