What has climate finance paid for? Gelato shops, a coal plant and more

Italy helped a retailer openchocolate and gelato stores across Asia. The United States offered a loan for a coastal hotelexpansion in Haiti.

Belgium backed the film La Tierra Roja, a love story setin the Argentine rainforest. And Japan is financing a new coal plant in Bangladesh and anairport expansion in Egypt.

These were some of the findings uncovered during a climate finance investigation byreporters fromReuters 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 allfour countries counted their backing as so-called climatefinance.

What is climate finance?

It includes grants, loans, bonds, equity investments and othercontributions meant to help developing nations reduce emissionsand adapt to a warming world.

Developed nations have pledged tofunnel 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.

Thesecountries reported more than 40,000 directcontributions toward the finance target, totalling more than $182billion US ($246 billion), from 2015 to 2020, the last year for which data isavailable.

What kind of spending counts as climate finance?

There are no official guidelines for what activities count.The UNClimateChange secretariat told Reuters it is up to the countriesthemselves to decide whether to impose uniform standards.

Developed nations have resisted doing so.

Although a coal plant, a hotel, chocolate stores, a movieand an airport expansion don'tseem like efforts to combatglobal warming, nothing prevented the governments that fundedthem from reporting them as such to the United Nations andcounting them toward their giving total.

In doing so, they broke no rules.

Though some organizations have developed theirown standards, the lack of a uniform system of accountabilityhas allowed countries to make up their own.

"This is the wild, wild west of finance,"said Mark Joven,Philippines Department of Finance undersecretary, who representsthe country at UNclimate talks. "Essentially, whatever theycall climate finance is climate finance."

Why did Italy, Japan, the U.S. and Belgium think their projects counted as climate finance?

When asked, an Italiangovernment official said Italy aims to consider climate in allof 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 itincludes storm water controls and hurricane protection measures.

A Belgian government spokesman defended counting the grant forthe rainforest movie as climate finance because the filmtouches on deforestation, a driver of climate change.

Japanese officials consider the power and airport projects greenbecause 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 beingspent, reporters from Reuters and Big Local News examined thousands of recordsthat countries submitted to the UNto document contributions.

The system's lack of transparency made it impossible to tellhow much money is going to efforts that truly help reduce globalwarming and its impacts.

Countries are not required to report project details. Thedescriptions they disclose are often vague or non-existent somuch so that in thousands of cases, they don't even identify thecountry where the money went.

"You cannot really follow the money, track the money, trackthe impact," said Romain Weikmans, a senior research fellowspecializing in climate finance at the Finnish Institute ofInternational Affairs.

What about Canada?

Some countries, such as theUnited Kingdom, Canada and the Netherlands, do submit detailedreports, and Reuters tallied tens of billions of dollars inspending from at least 33 countries that aligned with statedclimate goals. That included investments in renewable energy andprojects that build resilience to natural disasters.

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Is thisgreenwashing?

Decisions to claim borderline projects asclimate finance often don't reflect a deliberate attempt tomislead, said Gaia Larsen, director of climate finance access atthe World Resources Institute, a non-profit researchorganization that tracks climate finance.

But when countriesinflate their funding numbers with things like coal-fired power,she said, the result can resemble greenwashing when companiesmake exaggerated or misleading claims about their environmentalstewardship.

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 whatqualifies as climate finance and more transparency in reportingcontributions are needed.

More than 100 times since 2012,developing nations or groups acting on their behalf have calledfor such improvements, according to a Reuters review of UNsubmissions, videos of climate meetings and climate negotiationbulletins.

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"If we are telling ourselves we are spending money andinvesting in our future in a way that we are not, then we arecourting disaster," said Matthew Samuda, a minister in Jamaica'sMinistry of Economic Growth and Job Creation.

Why do somedevelopedcountries oppose stricter rules about climate finance?

Climate negotiators from wealthy countries that opposestricter rules told Reuters that more restrictions on how fundsare spent could limit developing nations'autonomy in tacklingclimate change, restrict the flow of moneyand hinder theflexibility needed to keep pace with the fast-evolving crisisand the technologies needed to solve it.

Gabriela Blatter, Switzerland's principal policy adviser forinternational environment finance, said developed nations aren'tresisting a definition so they can claim "anything under thesun"as climate finance. Rather, she said, they want to staytrue to the Paris Agreement, which aims to respect the right ofeach country to set its own course in fighting the effects ofclimate change.

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