What has climate finance paid for? Gelato shops, a coal plant and more
No rules exist about what counts as climate help to developed nations, and some projects may not help
Italy helped a retailer open chocolate and gelato stores across Asia. The United States 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.
These were some of the findings uncovered during a climate finance investigation by reporters from Reuters and Big Local News, a journalism program at Stanford University in California.
Funding for the five projects totalled $2.6 billion US ($3.5 billion), and all four countries counted their backing as so-called climate finance.
What is climate finance?
It includes 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 $100 billion US ($135 billion Cdn) a year toward this goal, which they affirmed during climate talks in Paris in 2015.
These countries reported more than 40,000 direct contributions toward the finance target, totalling more than $182 billion US ($246 billion), from 2015 to 2020, the last year for which data is available.
What kind of spending counts as climate finance?
There are no official guidelines for what activities count. The UN Climate Change secretariat told Reuters it is up to the countries themselves to decide whether to impose uniform standards.
Developed nations have resisted doing so.
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 United Nations and counting them toward their giving total.
In doing so, they broke no rules.
Though some organizations have developed their own standards, the lack of a uniform system of accountability has allowed countries to make up their own.
"This is the wild, wild west of finance," said Mark Joven, Philippines Department of Finance undersecretary, who represents the country at UN climate talks. "Essentially, whatever they call climate finance is climate finance."
Why did Italy, Japan, the U.S. and Belgium think their projects counted as climate finance?
When asked, 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.
A U.S. official said the Haiti hotel project counts because it includes storm water 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.
Japanese officials consider the power and airport projects green because they include cleaner technology or sustainable features.
How did reporters investigate how the money was spent?
In an effort to understand how that money is being spent, reporters from Reuters and Big Local News 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 impacts.
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.
"You cannot really follow the money, track the money, track the impact," said Romain Weikmans, a senior research fellow specializing in climate finance at the Finnish Institute of International Affairs.
What about Canada?
Some countries, such as the United Kingdom, Canada and the Netherlands, do submit detailed reports, and Reuters tallied tens of billions of dollars in spending from at least 33 countries that aligned with stated climate goals. That included investments in renewable energy and projects that build resilience to natural disasters.
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Is this greenwashing?
Decisions to claim borderline projects as climate finance often don't reflect a deliberate attempt to mislead, said Gaia Larsen, director of climate finance access at the World Resources Institute, a non-profit research organization that tracks climate finance.
But when countries inflate their funding numbers with things like coal-fired power, she said, the result can resemble greenwashing — when companies make exaggerated or misleading claims about their environmental stewardship.
What do developing nations say about mislabelled climate financing?
Some officials from potential recipient countries say that, before more money starts to flow, clearer definitions of what qualifies as climate finance and more transparency in reporting contributions are needed.
More than 100 times since 2012, developing nations or groups acting on their behalf have called for such improvements, according to a Reuters review of UN submissions, videos of climate meetings and climate negotiation bulletins.
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"If we are telling ourselves we are spending money and investing in our future in a way that we are not, then we are courting disaster," said Matthew Samuda, a minister in Jamaica's Ministry of Economic Growth and Job Creation.
Why do some developed countries oppose stricter rules about climate finance?
Climate negotiators from wealthy countries that oppose stricter rules told Reuters that more restrictions on how funds are spent could limit developing nations' autonomy in tackling climate change, restrict the flow of money and hinder the flexibility needed to keep pace with the fast-evolving crisis and the technologies needed to solve it.
Gabriela Blatter, Switzerland's principal policy adviser for international environment finance, said developed nations aren't resisting a definition so they can claim "anything under the sun" as climate finance. Rather, she said, they want to stay true to the Paris Agreement, which aims to respect the right of each country to set its own course in fighting the effects of climate change.
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