The richest countries on the planet have pledged to spend $100 billion a year to mitigate the effects of global warming. The commitment, based on the 2015 UN climate conference in Paris, includes investing this money through grants, loans, bonds, equity investments and other types of contributions to help developing countries reduce emissions and adapt to global warming. But a Reuters study shows that some of that funding goes to projects that seem to have nothing to do with the promised purpose.
Italy allegedly helped a company open a chocolate and ice cream shop in Asia, the United States offered a loan to expand a beach hotel in Haiti, Belgium financed the movie “La Tierra Roja,” a story set in the Argentine rainforest, and Japan even It funds a new coal-fired power plant in Bangladesh (not exactly something that reduces emissions) and the expansion of an airport in Egypt. The financing of the five projects totals $2.6 billion, and all four countries count their aid as “climate financing”. In doing so, they did not break any rules. This is because the commitment made in Paris is not accompanied by official guidelines on what activities count as climate finance, the agency explains. While some organizations have developed their own standards, the lack of a uniform system of accountability has led to various distortions, allowing countries to invent their own standards.
When Italian chocolate maker Venchi opened dozens of new stores in Japan, China, Indonesia and other parts of Asia, it enlisted help from Simest, a public-private company that helps Italian companies expand abroad. Italy requested $4.7 million in equity investment in climate finance. A Simest official told Reuters that the agency’s work does not focus on climate change and that Italy is not included in reporting on climate finance. A spokesperson for the Ministry of Environment and Energy Security, responsible for the country’s relations with the United Nations, said the project had a climate component, but declined to explain how.
Developed countries declared more than 40,000 direct contributions to the fiscal target totaling more than $182 billion from 2015, the last year for which data are available, to 2020. To understand how that money is being spent, reporters from Reuters and Big Local News, a journalism program at Stanford University, scrutinized thousands of records that countries have submitted to the United Nations to document their contributions and prove they are keeping their commitments.
The lack of transparency of the system made it impossible to determine how much money is allocated to initiatives that actually contribute to reducing global warming and its impact, as countries are not required to report project details. The explanations they provide are often vague or nonexistent, so that in thousands of cases they don’t even describe the country the money was sent from. Even the beneficiary countries included in the reports are sometimes unable to say how the money was spent. “You can’t track money, you can’t track it, you can’t track its impact,” said Romain Weikmans, a senior climate finance researcher at the Finnish Institute of International Affairs.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
