Saudi joins US and refuses to agree $100bn climate fund

A fund that was to contribute US$100 million a year towards the fight against climate change is stumbling at the starting block.

Negotiators from nearly 200 nations are in South Africa this week to try to find a successor to the Kyoto Protocol, the binding agreement between 37 countries to cap greenhouse gas emissions that expiShow more

Saudi Arabia has joined the US and Venezuela in refusing to sign off on a draft proposal for a US$100 billion (Dh367bn) fund intended to help developing nations to combat climate change.

The kingdom has said it would not pay into the fund, while the US and a coalition of Latin American nations have voiced concerns about the draft's sturdiness and its effects on their ease of accessing resources.

Even developing nations that would be the fund's beneficiaries have questioned who should be in charge of doling out the cash and how the money should be spent.

"We think the fund will be approved, but whether it will be an empty shell is still to be seen," Mohammad Al Sabban, Saudi Arabia's chief climate negotiator, told Dow Jones Newswires. "We will not be putting money into the fund."

The wrangling over the fund reflects the divisive nature of climate change initiatives.

Negotiators from nearly 200 nations are in South Africa this week to try to find a successor to the Kyoto Protocol, the binding agreement between 37 countries to cap greenhouse gas emissions that expires next year.

It has enabled millions of dollars from rich nations to be funnelled to poorer ones that earn carbon credits for cutting their emissions.

Although countries including the UAE are officially backing an extension of the treaty, privately, negotiators predict it is unlikely to happen.

The US has never signed the protocol, and Russia, Japan and Canada have already said they would not commit to extending the agreement.

The UAE and South Korea, among others, have come out in favour of a strategy called Nationally Appropriate Mitigation Action, in which nations set targets and find funding on their own - a shift from the international cooperation that defined the Kyoto treaty.

The Green Climate Fund, which was drafted last month so it could be fast-tracked for approval at this week's talks, is seen as a way to fund such national programmes, or even strengthen Kyoto.

"All members of the committee wanted to design a thoroughbred racehorse, and we ended up with a camel," Burhan Gafoor, Singapore's chief climate negotiator, told Bloomberg News.

"What we have may not be elegant, but it's balanced and it's sturdy.

Resistance to the draft arises in part from a provision that it be run for the first three years by the World Bank.

Another issue is that countries might have to open themselves up to more scrutiny to qualify for funding, whereas under the current system only a single project needs to be audited so it can earn carbon credits.

"Generally, there's scepticism about the World Bank taking a leading role," said an official from a Gulf nation, who wished to remain anonymous.

"Developing countries and recipient countries should have a fair say in the governance of the fund."