Obama to Pledge $3 Billion for New Fund to Address Climate Change Ahead of Negotiations

Energy and Climate Report provides current, thorough coverage of clean energy, efficiency, and climate change legislation, regulation, policy, legal developments, and trends in the U.S. and...

By Roger Runningen, Mark Drajem and Alex Nussbaum

Nov. 14 — President Barack Obama will pledge $3 billion to a United Nations climate-change fund that’s intended to help developing countries boost renewable energy and counter the ill effects of global warming, administration officials said Nov. 14.

The pledge would make the U.S. the largest donor to the newly established Green Climate Fund, which is a linchpin of efforts to secure an accord within the UN to combat climate change. With pledges in place from Germany and France, and one coming from Japan, the Green Climate Fund is nearing its short-term goal of securing $10 billion in pledges.

The U.S. and other developed nations pledged in the run-up to the 2009 Copenhagen climate summit that they would provide $100 billion annually in combined private and public money beginning in 2020 to help vulnerable nations adapt to climate impacts and help developing nations lower their emissions.

“This is a really important piece of building towards this international agreement,” said Peter Ogden, a senior fellow at the Center for American Progress and a former Obama administration climate official. “This will be a hugely important moment for the negotiations themselves.”

The U.S. funding would need approval of Congress, which for the first time in Obama’s presidency will have both Houses run by the opposition Republican Party after victories in midterm elections.

The $3 billion pledge “is an unfortunate decision to not listen to voters in this most recent election cycle,” said Sen. James Inhofe (R-Okla.), a skeptic of climate change who is set to lead the Senate Environment and Public Works Committee next year. “In a new Congress, I will be working with my colleagues to reset the misguided priorities of Washington the past six years.”

Emissions Cuts

The Obama administration is leading efforts among nearly 200 countries at the UN to secure a pact to reduce greenhouse gases that scientists blame for climate change. That effort, which has progressed slowly since 2009, got a significant boost after the U.S. and China, the two largest emitters of carbon dioxide, announced their targets for the negotiations.

In Beijing, the U.S. pledged to cut its emissions by at least 26 percent by 2025. China agreed for the first time to cap its overall emissions by about 2030 and said it will seek to get 20 percent of its energy from non-fossil-fuel resources.

The climate funding has been a sticking point in the talks, which are set to take place in Paris next year.

“It is in our national interest to helping vulnerable countries to build resilience to climate change,” the White House said Nov. 14 in a statement.

G-20 Summit

The pledge was announced just before a Group of 20 summit, which caps a trip to Asia by Obama after his party’s losses in the midterm congressional elections.

Obama is to arrive in Brisbane, Australia, with policy victories from his stop in Beijing and on the heels of two days spent pressing the government of Myanmar to put its political and economic reform process back on track.

Obama will include funding for part of the $3 billion in his next budget request and will spread the funding out over a number of years, according to an administration official who spoke anonymously because budget figures haven’t been decided.

Calls and e-mails to Republican Sens. Bob Corker (Tenn.) and Lindsey Graham (S.C.), who will have jurisdiction over budget requests, weren’t immediately returned.

Under the Green Climate Fund, established by the UN, money will be used to lure private sector investment and help boost global markets in clean energy technologies, according to the Obama administration.

Lima Talks

That would create opportunities for entrepreneurs and certain manufacturers who are taking steps toward a low-carbon economy, including those in the U.S. such as General Electric Co., according to an administration fact sheet.

Officials are scheduled to meet next month in Lima for two weeks of discussions to begin drafting the UN climate agreement.

Climate funding is key to convincing less developed countries to come on board a global agreement, said Jessica Brown, the former lead negotiator for climate finance at the State Department.

“The finance outcomes are so inextricably tied to the rest of the package that you can’t really seal the deal without them,” said Brown, now an analyst with the Climate Policy Initiative, a not-for-profit group that advises national governments. “The U.S. is taking this super-seriously.”

Aiding Nations

Still, today’s pledge should be taken with “more than a grain of salt,” said Brown, who left the State Department in May. The funding likely will require both congressional approval and the support of future presidents, she said in a phone interview.

A pledging conference is scheduled Nov. 20 in Berlin to accelerate fundraising efforts.

Many European nations already have announced donations. Germany has pledged 750 million euros ($930 million), France has promised $1 billion and Sweden has committed to 4 billion krona ($540 million). Pledges from South Korea, Denmark, the Netherlands, Norway, Switzerland, the Czech Republic and Luxembourg amount to more than $400 million.

Next Step

Japan is making a pledge of about $1.5 billion, Kyodo News Agency reported.

Ogden and other supporters of the funding say it is the next step from a climate fund that was set up under the administration of Republican President George W. Bush. The U.S. is close to satisfying its $2 billion pledge to that Climate Investment Fund.

“Hopefully it’s not [dead on arrival]. This is something that’s in our interest,” said Jake Schmidt, director of the international program at the Natural Resources Defense Council.

“The president is a player in the budget process as well,” Schmidt said, noting that Congress had approved funding for a predecessor fund every year. Republicans “can do a lot of things, but they can’t do everything.”

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

 ©2014 Bloomberg L.P. All rights reserved. Used with permission.