US Declines Funding Pledge for UN Climate Fund: An Alarming Setback in Climate Financing.

Stay informed with free updates

Simply sign up to the Climate change myFT Digest — delivered directly to your inbox.

The US has failed to pledge money to the world’s biggest multilateral climate fund at its second fundraising conference, highlighting wealthy governments’ struggle to support poorer nations suffering from the impact of global warming.

The UN’s Green Climate Fund, the world’s largest fund dedicated to tackling climate change in developing countries, pulled in a total of $9.3bn from 25 countries by the close of its one-day pledging conference held in Bonn, Germany, on Thursday.

But a divided Congress and fraught battles to avoid a government shutdown have stymied US efforts to secure money for the fund, illustrating the challenges for countries facing an economic slowdown as they begin negotiations for a new climate deal at next month’s COP28 summit.

Sultan al-Jaber, president-designate of the UN climate summit, hit out at rich countries for failing to support the fund. The GCF’s “current level of replenishment” was “neither ambitious nor adequate to meet the challenge the world faces”, the chief executive of Abu Dhabi National Oil Company said on Thursday.

The fund was initially capitalised with $10.3bn by 45 countries in 2014, followed by a further $10bn from 32 countries for its first replenishment in 2019. For its second replenishment it attracted significant fresh commitments from Germany, which pledged $2.2bn, the UK with $2bn, France with $1.7bn and Japan with $1.2bn.

Although the US promised $3bn to the fund in 2014, it committed no further funding in 2019 under former president Donald Trump, who withdrew the country from the 2015 Paris climate accord. President Joe Biden secured $1bn for the GCF in December, although the amount went towards fulfilling the US’s earlier 2014 pledge.

Although Biden promised the US would spend $11.4bn annually by 2024 to help developing countries tackle climate change and transition to clean energy, Congressional Republicans have thwarted the president’s efforts to secure the money.

A spokesperson for the National Security Council said the US was “steadfastly committed” to “Biden’s pledge to increase US climate finance to help developing countries tackle the urgent threat of climate change, but unfortunately is not in a position to make a pledge to [the GCF’s second replenishment] at the October 5 pledging conference”.

The spokesperson added: “We look forward to sharing our approach to [the GCF’s second replenishment] at a later date.” The fund allows pledges to be made after the completion of its conference.

Emerging and developing economies are responsible for about two-thirds of greenhouse gas emissions, but many are struggling to access the finance needed for the green transition.

The fund disbursed $2.3bn by the end of 2021, according to its latest annual report. Mafalda Duarte, formerly the head of the Climate Investment Funds at the World Bank, was installed as the new head of the GCF earlier this year.

Last week, US civil society groups including the Center for American Progress, Natural Resources Defense Council, E3G and the Sierra Club wrote a letter to the White House urging the Biden administration to announce “an ambitious pledge” in Bonn.

The groups wrote that a failure to pledge funds would “undercut its negotiating position at COP28 and other diplomatic venues, hamstring efforts to encourage new donors to contribute climate finance, and send a troubling signal to developing and developed country partners alike about the US’s commitment to multilateral climate progress”.

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here