Oil-rich kingdom says money is needed to protect against water scarcity but request sparks strong criticism and fears over the fitness of the public fund
Bahrain – one of the world’s most oil-rich nations – has applied to the international Green Climate Fund for $9.8m for its National Oil and Gas Authority, raising questions over whether taxpayer-funded assistance for poor countries is reaching its intended targets.
The kingdom has requested the funding to clean up wastewater from the oil and gas industry, which it says is necessary to protect against water scarcity in future – a problem that is likely to grow worse around the world as a consequence of climate change.
The UN’s Green Climate Fund (GCF) channels taxpayer funds from rich countries, including the UK, the US, EU member states and others, to developing countries that would otherwise struggle to invest in low-emissions technology and infrastructure to adapt to a warming world. About $10bn has so far been pledged, including $1bn from the UK.
However, Bahrain’s proposal has come in for heavy criticism, and experts are concerned that it will encourage other oil-rich nations to come forward with proposals that will benefit their fossil fuel industries under the guise of adapting to the impacts of climate change. They are worried that there are too few safeguards to GCF funding.
Lutz Weischer, team leader for international climate policy at Germanwatch, an environmental NGO, said: “The GCF was given the mandate to promote a paradigm shift to low-carbon and climate resilient development pathways [which mean] transitioning away from coal, oil and gas. A project that would make a country’s water supply dependent on continued oil and gas production is clearly not in line with the mandate.”
Channelling money from the GCF to a fossil fuel company would be “perverse”, added Mohamed Adow, international climate lead at the charity Christian Aid. “Surely the oil companies should be cleaning up their own polluted water?”
An independent technical assessment found several flaws, and even suggested that fixing leaking pipes could be a more efficient way of making Bahrain’s water supply more resilient.
The GCF board, which is to consider a raft of proposals from various countries, will be asked to approve the application as soon as Thursday morning. Whether it does so will be a key test of the fitness of the fund and its governance, according to observers.
Adow said: “This funding would not only undermine trust in the GCF, it would also set a bad precedent for other proposals involving fossil fuel companies looking to leech off the fund’s resources.”
Wael Hamidan, executive director of Climate Action Network International, said: “The notion of leveraging public money targeted at climate action to support fossil fuel companies is absurd and misguided at best. The only justifiable reason for assisting fossil fuel companies should be to transition fully into 100% renewables as a matter of urgency – and even that could be funded through these companies’ enormous profits.”
A GCF spokesman told the Guardian: “This is one of 20 project proposals to be considered by the GCF board this week. The project will not finance any fossil fuel operations, but targets water shortage resulting from climate change. No project funds will be used for profit generating activities, and only lower income households and public buildings (mosques, schools) will be provided with water saving devices and greywater recycling systems. The proposal is brought to us by UN Environment, one of our project partners (Accredited Entities). It has been recommended for approval by our Technical Advisory Panel, subject to certain conditions.”
The GCF said its mandate was to support developing countries in their transition to low emission and climate resilient pathways in support of the Paris agreement. “Project proposals have to be approved by the GCF board, which makes decisions by consensus between its 24 members, equally representing developed and developing countries. All project proposals coming to the board are subject to assessment from our independent technical advisory panel,” said the spokesman.
A spokesman for Bahrain’s environment council said: “Bahrain’s application to the Green Climate Fund is about addressing the severe threat posed by global climate change to the kingdom’s freshwater supply. The impact of rising temperatures and increasing saline intrusion is expected to reduce Bahrain’s freshwater resources by between 50 to 100 million cubic metres of water per year in the short-term, well above the global average and posing a unique risk to the kingdom’s water security.
“As a committed signatory to the Paris agreement, the kingdom has already taken significant steps to counteract the impact of climate change, including the development of a new national water strategy. We now seek assistance from the GCF to help support these critical interventions.”
The criticism is a fresh headache for the embattled GCF, which has struggled with management dramas, including the resignation of its executive director and the collapse of a crucial board meeting over the summer. Rich and poor countries on the board are divided over framing new processes to raise funds, and donors have expressed private frustration at the slowness of its processes.
Previous funding rounds have also attracted criticism, including a controversy over the proposed funding of megadams.
The GCF was set up under the UN climate negotiations to provide a channel through which rich country governments can fulfil their obligations, agreed in Copenhagen in 2009 and subsequently under the Paris agreement of 2015, to provide finance to developing nations. The taxpayer funds, including nearly $5bn from EU member states, are supposed to help poor countries cut greenhouse gas emissions and cope with the impacts of climate change.
The US pledged $3bn to the GCF and delivered $1bn under Barack Obama’s presidency, but Donald Trump is seen as unlikely to fulfil the remainder of the commitment. He has begun the process of withdrawing the US from the Paris agreement.
The Bahrain case throws light on the murky world of climate finance, by which private investors and governments mobilise funds for projects and technologies to cut greenhouse gas emissions and develop the resilient infrastructure needed to cope with a warming climate.
According to pledges made at Copenhagen in 2009 and renewed in Paris, at least $100bn is supposed to flow from rich to poor nations a year by 2020, in order to help the poor to cut emissions and cope with the impacts of climate change. Most of this is likely to come from the private sector rather than taxpayer funds, but the sources and recipients of all such funding in the private sector are difficult to account for.
The GCF was supposed to help the governments of developed countries by providing a set of rules and bureaucracy which could administer funding efficiently to recipients in line with the donor country aims. However, its problems leave major questions over the future of publicly funded climate finance hanging.