Budget shortfall hits UN climate body

The leading UN body on climate change is experiencing a severe budget shortfall, according to a Reuters analysis of documents from the world body – a funding gap that diplomats said could impair international climate dialogue.

The analysis found a budget hole of at least 57 million euros ($61.53 million) for 2024 – or nearly half of the funding needed for the UN Framework Convention on Climate Change (UNFCCC) secretariat to run annual climate negotiations among nearly 200 countries and to help implement any agreements that are made.

Budgets set out for the UNFCCC span two years. Its total 2024-2025 budget – the body’s three main budget lines combined – is for 240 million euros, with about half of that expected to be allocated for this year.

The UNFCCC’s member countries signed off on the budget and are expected to contribute the funds. The budget includes a core fund into which these countries are obligated to contribute, a supplementary fund drawing voluntary donations, and another voluntary fund to help diplomats from poorer countries attend UN climate negotiations. While a handful of countries such as Japan and Germany have exceeded their payment obligations, others – notably the United States and China, the world’s two biggest economies and the top emitters of greenhouse gases – have not yet met theirs.

Contributions are due on Jan.1 each year. The secretariat, set up under the 1992 UNFCCC treaty, is the world’s key body for coordinating international efforts to reduce climate-warming emissions and staging summits where countries can hold one another accountable.

The budget shortfall has forced it to curtail activities – from reducing operating hours at its headquarters in Bonn, Germany, to cancelling regional “climate week” events this year. Those regional summits in countries such as Kenya and Malaysia last year raised billions of dollars in investment pledges from governments, investors and philanthropies for renewable energy, reforestation and other climate-focused projects.

“We continue to work relentlessly, but our resources are increasingly over-stretched,” said a UNFCCC spokesperson, who asked not to be named, in response to the Reuters analysis.

Germany’s climate envoy Jennifer Morgan urged countries to find a solution.

As of this month, the UNFCCC had received 63 million euros ($68 million) in contributions for 2024.

Officials in the United States and China said the countries would make their payments this year but did not specify when. State Department spokesperson Melvin Felix said the United States “still intends to provide a substantial contribution” to support the secretariat this year. The Chinese foreign ministry said China “will fulfil its obligations as always.” As of October, the United States still owed 7.3 million euros to the UNFCCC’s 2024 core budget, though it has contributed 2.5 million euros to its supplementary budget. China still owed 5.6 million euros to the core budget, though it has contributed 497,000 euros to the supplementary fund.

Even if both countries meet their obligations this year, it would not be enough to cover the hole in the UNFCCC’s overall budget.

Countries can be delayed in meeting the payment deadline for logistical reasons, for example if national budget cycles do not run on a calendar year or if payments need additional legislative approval. National elections also can cause delays.

The Reuters analysis showed that, in past years, these issues typically were resolved before October – and that this year’s delays are by far the worst in UNFCCC history, in terms of the amount of the overall budget still missing.

The UNFCCC budget has more than doubled from its level of around 102 million euros spanning 2014 and 2015 amid a flurry of new global climate deals.

Reuters spoke with more than a dozen diplomats involved in UN climate negotiations, as well as with UNFCCC representatives. Most spoke anonymously. Eight of the diplomats expressed concern that the funding gap could undermine UN climate negotiations at a time when national governments are seeking trillions of dollars in climate investments.