Italy helped a retailer open chocolate and gelato stores across Asia.
The US offered a loan for a coastal hotel expansion in Haiti.
Belgium backed the film La Tierra Roja, a love story set in the Argentine rainforest.
And Japan is financing a new coal plant in Bangladesh and an airport expansion in Egypt.
Funding for the five projects totalled $2.6 billion, and all four countries counted their backing as so-called ‘climate finance’ – grants, loans, bonds, equity investments and other contributions meant to help developing nations reduce emissions and adapt to a warming world.
Developed nations have pledged to funnel a combined total of $100bn a year toward this goal, which they affirmed during climate talks in Paris in 2015. The funding helped crown Japan and the US as two of the top five contributors.
Although a coal plant, a hotel, chocolate stores, a movie and an airport expansion don’t seem like efforts to combat global warming, nothing prevented the governments that funded them from reporting them as such to the UN and counting them toward their giving total.
In doing so, they broke no rules. That’s because the pledge came with no official guidelines for what activities count as climate finance. Though some organisations have developed their own standards, the lack of a uniform system of accountability has allowed countries to make up their own. The UN Climate Change secretariat said it is up to the countries themselves to decide whether to impose uniform standards. Developed nations have resisted doing so.
“This is the wild, wild west of finance,” said Mark Joven, Philippines Department of Finance under-secretary, who represents the country at UN climate talks. “Essentially, whatever they call climate finance is climate finance.”
The four countries defended their programmes as sound. Japanese officials consider the power and airport projects green because they include cleaner technology or sustainable features. A US official said the hotel project counts because it includes stormwater controls and hurricane protection measures. A Belgian government spokesman defended counting the grant for the rainforest movie as climate finance because the film touches on deforestation, a driver of climate change. An Italian government official said Italy aims to consider climate in all of its financing but did not elaborate on how the chocolate stores met that goal.
Developed nations reported more than 40,000 direct contributions toward the finance target, totalling more than $182bn, from 2015 to 2020, the last year for which data is available. In an effort to understand how that money is being spent, reporters from Reuters and Big Local News, a journalism programme at Stanford University, examined thousands of records that countries submitted to the UN to document contributions.
The system’s lack of transparency made it impossible to tell how much money is going to efforts that truly help reduce global warming and its impact.
Countries are not required to report project details. The descriptions they disclose are often vague or non-existent – so much so that in thousands of cases, they don’t even identify the country where the money went.
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