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The UN climate campaign is running out of money. Launched with high hopes, the global “Green Climate Fund” (GCF), set up by the United Nations to finance climate change projects in the developing world, is gridlocked due to an international power play. Meanwhile, the UNFCCC Climate Change Secretariat does not know how to raise five million Euros needed for its next climate conference.

At the UN climate conference in Bonn, which runs until the end of the week, the impasse over the Climate Fund is dominating the negotiations. Environmental groups also complain that climate funding often does not end up at the right places. The UNFCCC Climate Change Secretariat is suffering from cost-cutting measures and does not know how to raise five million Euros needed for its next climate conference. What is more, Germany is going to halve its climate funding as of next year.

The GCF had been agreed at the UN climate conferences in 2010 and 2011. It is one of the few tangible results of international climate negotiations. It is seen by the UN as “the core project of the transition to a green economy in poor countries” and is supposed to start in early 2013. However this is not going to happen. The countries in attendance could not agree on the composition of the Board of Directors which includes 24 members from all regions of the world.

In short: without board, there will be no decision on how the funds should be collected and spent, or where the Fund’s Secretariat will be located. By Wednesday, the group of countries from Asia and Latin America could not reach consensus candidates.

There was – in contrast to other UN climate meetings – an “excess of enthusiasm,” remarked an expert dryly. Because the climate fund will manage huge amounts of money, everyone wants “to be there at the feeding troughs.”

The blockade over cash fits into the mood at the conference in Bonn, where many groups of nations are trying to reverse the decisions of the last climate conference. In Durban in 2011, a small breakthrough had been achieved, because all countries agreed to negotiate an agreement by 2015, which should commit all countries somehow to protect the climate from 2020 onwards. This small advance, however, is currently being blocked by the dispute over the agenda.

Time is running out for climate financing because the terms of the GCF have to be clarified by the next UN climate conference in Doha in December. Negotiators expect that the fund will manage approximately ten billion dollars of aid money annually from 2020 to support green energy in poor countries, to help with building dikes or to adapt agriculture to climate change.

“Developed nations are saying: ‘don’t worry, the cash is going to flow,” says Saleemul Huq of the British Development Institute IIED. “But for now all they say is: it’s zero dollars after 2012. There is a also growing risk that development aid will be counted twice.”

Where the money will come is entirely unclear. Germany, which intends to contribute about ten percent of the fund, is currently suffering from falling prices of carbon permits. The Federal Government intended to use proceeds from these permits to fill the “climate and energy fund,” totalling around ten billion Euros for four years. Now only about half is likely to be available according to the Germany finance ministry.

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translation Philipp Mueller