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The European Commission is warning that the EU’s credibility is at stake as national finance ministries struggle to provide clarity on the details of climate finance for poorer countries.

The EU has promised €7.2 billion in ‘fast-start’ climate- change funding to poorer countries over the next three years. But it has still to define what it covers and how much each member state will pay. EU finance ministers meeting next week in Brussels (18 May) are expected to endorse a report on the plan, but are likely to duck the issue of how the EU will split the cost.

In the build-up to the Copenhagen climate conference last December, the EU promised annual payments of €2.4bn to developing countries in 2010, 2011 and 2012. The money is intended to help these countries reduce greenhouse-gas emissions and start adapting to climate change.

EU leaders meeting in March asked for a status report on the plan, and called for “a new dynamic to the international negotiation process”. The report has been drafted jointly by the Commission and member states, and will be presented at UN climate talks in Bonn at the end of the month. But sources familiar with the subject say the report will not contain a breakdown of member states’ contributions. The Commission is dissatisfied with the process and is warning that the EU’s credibility is at stake.

US contribution

Pressure is on the EU, because the US has published details of its $1.4bn (€1.1bn) climate finance budget for 2011. The US is promising $710 million for ‘clean energy’ projects, $334m to help the least developed countries adapt to climate change and $347m to stop deforestation. Contrasting this with the EU’s paper, an EU source said: “The (US) sums aren’t impressive, but they give the detail.”

The EU has also struggled to define what counts as climate finance. In Copenhagen, leaders agreed that fast-track finance would be “new and additional”, ie, governments cannot simply transfer money from existing aid budgets. But member states have been divided over how to interpret ‘additionality’.

Campaign groups are worried that the EU may undermine climate talks by appearing to stall on their promises. Tim Gore at Oxfam said he feared “a fudged report that threatens to undermine trust among developing countries”. Oxfam and other groups have argued that climate money must come on top of aid money and without strings attached.

Gore said: “The most important thing is to be transparent about it. If there are difficulties it is better to be open.”

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