Billions in climate aid pledges have 'wild west' accounting

LE BOURGET, France (AP) — There's a lot of money in climate financing. Six years ago, rich nations pledged that by 2020 they would provide $100 billion a year in aid, loans and private money to help poorer nations cope with climate change and wean themselves off fossil fuels. This week in Paris,...

              NGO representatives and participants stage a sit-in protest closed to the plenary session to denounce the first draft COP21 Climate Conference agreement, and put pressure to reach an international agreement to limit global warming, during the COP21, United Nations Climate Change Conference in Le Bourget, north of Paris, France,  Wednesday, Dec. 9, 2015. (AP Photo/Francois Mori)

LE BOURGET, France (AP) — There's a lot of money in climate financing. Six years ago, rich nations pledged that by 2020 they would provide $100 billion a year in aid, loans and private money to help poorer nations cope with climate change and wean themselves off fossil fuels. This week in Paris, they're pledging even more, and discussing whether developing nations like China need to pony up, too.

But what exactly are they paying for? In the wild west of climate finance, the funding includes things like a "love movie festival," research on elephant sounds and even new coal plants.

When it comes to climate money, expert after expert says, don't believe most figures.

No one is saying money is being misspent, but they are saying it is being misreported, making it sound bigger than it really is.

"Developed countries inflate the figure; they count everything they can find," said Romain Weikmans, a researcher at Brown University's Climate and Development Lab. "It's really a process of lying the more you can."

At a 2009 climate summit, rich nations pledged to ramp up funding for poor ones to $100 billion a year by 2020 to fund a trillion-dollar transition to clean energy. In a high-stakes game of poker in the weeks and months running up to this year's summit in Paris, developed nations have upped the ante to help get closer to that 2020 goal.

In the past year alone, pledges rose by at least $10 billion, according to a review of United Nations data by The Associated Press. U.S. Secretary of State John Kerry made a big splash Wednesday when he announced a doubling of U.S. aid for poor countries to adapt to global warming, now at $860 million a year.

But University of Zurich's Axel Michaelowa, who studies climate aid grants, found "there was a huge misrepresentation. Governments were actually really not able to report properly" on aid that was supposed to help countries reduce carbon dioxide emissions.

His study, conducted on specific climate grants four years ago, showed a list of "projects without any conceivable climate change connotation," such as Belgium funding for a "love movie festival" in the early 2000s in Africa, a U.S.-funded study on Savannah elephant sounds, and uniforms for park guardians in Central America with aid from Spain.

For their website Adaptation Watch, Weikmans and Brown University environmental studies professor Timmons Roberts studied 5,201 projects mentioned by developed nations and found that 3,444 of them "did not explicitly link project activities to addressing climate vulnerability," Weikmans said.

"Climate finance accounting is the wild west," Roberts said. Two other experts used the same "wild west" phrase, which some developed nations' representatives object to.

Weikmans used Belgium as an example. While praising efforts by the Belgian government to account for spending in a transparent way, Weikmans said a few years ago a 33 million euro pledge suddenly doubled on the books "thanks only to methodological changes in accounting."

Simon Buckle of the Organization for Economic Co-operation and Development (OECD), wrote a report, tallying how much of the $100 billion-a-year target has been pledged. It's about $62 billion a year as of 2014, his report said.

India, however, looked at the same report said the real number was probably less than $1 billion a year. It issued a report of its own calling the OECD document full of "inflated numbers."

In an interview with the AP, Indian Environment Minister Prakash Javadekar dismissed the OECD report as "a double-counting exercise." He said actual climate finance flowing to developing countries was much smaller.

"It's absolutely dismal," he said. "There is no finance on the table."

Buckle told The Associated Press: "I'll stand by it to the death."

Others are standing at his side. In an email sent to some negotiators in the climate talks when the report was released in October, U.S. chief climate negotiator Todd Stern hailed the report as "rigorous, transparent and conservative" and said it supersedes all other documents. He said it showed that the developed nations have made "significant progress" toward the $100 billion goal.

So is it $62 billion or less than $1 billion?

"You couldn't get further apart than that," said Roberts, the environmental studies professor. "Unfortunately the truth is probably somewhat in between."

He estimated somewhere in the range of $20 to $30 billion.

Michaelowa, of the University of Zurich, said: "If I could give my personal guess I would say $40 to $50 billion."

Much of the question centers on what should you count.

A lot of the money comes in the form of loans. While it seems OK to count loans that are given at a discount rate or zero interest because that helps the nation, many of the loans are given at market rate, meaning they aren't really aid, said Tim Gore of Oxfam International.

Many say those market-rate loans, often called non-concessional, shouldn't be counted because they have to be paid back with interest. When the money is paid back, does the loan no longer count or is it negative aid?

Magdy Martínez-Soliman, the United Nations Development Program's assistant administrator, said some countries — or even subnational governments like Mexican states — wouldn't be able to get loans, so even market-rate loans help because they let these governments do something valuable, like build infrastructure.

Another issue is that some loans categorized as being primarily or significantly about climate aid aren't at all, and many don't even mention the word climate, Gore and others said.

The OECD's Buckle challenged that.

"We were quite tough in the definition of what we would count," he said, adding that the report removed all double-counting and tallied only about half the money from multi-national development banks.

The OECD report also noted that Japan and Australia incorrectly tried to count aid to build high-tech coal power plants. Burning coal is the biggest man-made emitter of heat-trapping gases.

One thing Buckle's report highlighted was that only 16 percent of the money is going to adaptation, which is meant to help countries adjust to a warmer world with rising seas. Most of the money is spent on mitigation — trying to lessen warming by reducing the burning of fossil fuels.

In 2009, when the $100 billion goal was set, developed nations said they wanted a balance of mitigation and adaptation finance. African nations at the Paris conference called for a double of the percentage of adaptation spending to 32 percent and Martinez-Soliman said ideally it should hit 50 percent.

That's the money the U.S. just doubled its pledge to help. So how much has each country promised in aid?

Despite efforts at the current summit to make reporting more transparent, the pledges remain a closely guarded secret until countries issue reports in January.

"Trying to solve the question of who's pledging what and what's being delivered," said Karen Orenstein of Friends of The Earth, "is kind of like solving a puzzle that's a major black hole."



OECD report counting pledges:

United Nations list of new climate pledges in 2015:

Michaelowa report on misidentified climate aid:

Adaptation watch:


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