Friday

28th Jul 2017

EU funding offer sparks anger at Cancun

  • Climate campaigners from the global south have rounded on the 'creative accounting' by the EU aid for low-carbon development (Photo: Peter Bischoff/MS ActionAid Denmark)

In one of the first major announcements at UN climate talks in Cancun, Mexico, the EU has released details of its contribution to ‘fast-start' funding to help poorer nations deal with the adverse effects of climate change over the short-term.

But aid agencies and governments from developing countries quickly rounded on the news when it became clear that roughly half the money would be in the form of loans or equity in local companies, rather than grants.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Wrangling over the ‘fast-start' funding has led to a major breakdown in trust between rich and poor nations over the past year.

A pledge of $30 billion in "new and additional" money between 2010 and 2012 for poorer nations was one of the few concrete initiatives to come out of Copenhagen last December, but since then richer nations have appeared reluctant to stump up the cash.

Outlining Europe's contribution to the pot on Tuesday (30 November), expected to total €7.2 billion over the three years, EU chief negotiator Artur Runge-Metzger said loans, rather than grants, could provide a "win-win" situation for both sides.

"When it comes to mitigation actions you find that … consumers can repay loans, in other words, finance can be used like a revolving fund," he said.

"In that way, funds can be repaid and used by others. You don't need grants. It would be a waste of money because the individual pays for itself. You have to make best use of peoples' money," he added.

Mr Runge-Metzger later clarified to the Guardian newspaper that EU loans to poorer nations were frequently made on a "highly concessional basis", including a major grant element of up to 75 percent.

Critics said loans were totally unacceptable however, and would simply saddle developing nations with more debt.

They added that closer analysis of developed-country pledges showed much of it be re-cycled money, therefore failing to reach the "new and additional" criteria laid down in Copenhagen.

Together with Europe's €7.2 billion offer, Japan has pledged $15.4 billion and the US $1.7 billion over the three-year period.

NGOs argue that the practice of double-counting money from former promises is adding to confusion and a feeling of mistrust on the part of developing nations. "Countries are definitely using creative accounting to cover up for their shortfalls," said Tim Gore, Oxfam's senior climate advisor.

As well the tough discussions on short-term assistance, talks also got underway on a Green Fund which negotiators at Copenhagen last year decided should be able to raise $100 billion a year from 2020 onwards to help poorer nations fight climate change over the longer-term.

US leaves Paris climate deal

Trump said Paris deal “punishes the United States”, even though treaty leaves it up to nations to determine own climate contribution.

Trump delays climate decision

The White House said it would take more time to decide if the US should remain part of the Paris climate agreement, while talks are underway in Bonn.

News in Brief

  1. EU citizens will need registration to enter UK in Brexit transition
  2. Italy weighs up sending navy into Libyan waters
  3. Swedish PM fights for survival amid IT scandal
  4. Poland's Kaczynski vows to continue judicial reform
  5. Werner Hoyer re-appointed as EU investment bank chief
  6. Spanish PM denies knowledge of party corruption
  7. France 'routinely' abuses migrants, says NGO
  8. Swedish government rocked by data scandal

Stakeholders' Highlights

  1. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  2. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  3. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  4. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  5. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  6. ACCAAnnounces Belt & Road Research at Shanghai Conference
  7. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  8. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  9. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  10. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  11. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  12. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug

Latest News

  1. Spain's PM appeals to court over Catalan independence
  2. Senate backs Russia sanctions, setting scene for EU clash
  3. France and Italy quarrel over shipyard and Libya
  4. Corbyn re-opens Labour's single market wound
  5. Visegrad lobby makes food quality an EU issue
  6. EU court could dismiss national borders in cyberspace
  7. Confusion swirls round Macron's Libya 'hotspots'
  8. Insults fly after EU ultimatum to Poland