West faces climate ‘hit’ if global clean energy push fails, warns fund chief

The new head of the world’s biggest climate finance institution has warned that without clean energy investment in developing nations the US and Europe will be “hit”, regardless of their own policy efforts at home.

Mafalda Duarte, the Portuguese national who will take over the UN-backed $12bn Green Climate Fund next month, spoke to the FT about the challenges ahead as leaders gather in Paris this week to discuss reform of climate finance.

“If we don’t have investments in developing countries, forget about the climate,” said Duarte. “If the Indias, the Africas, the Indonesias, the Chinas — if they don’t move, then it doesn’t matter what we do in developed countries . . . it is going to hit the US, it is going to hit Europe, it doesn’t matter.”

Wealthy countries have been scrambling to meet financing commitments made at previous UN climate talks. Out of the $100bn for an adaptation fund promised at the UN summit in Copenhagen 14 years ago, only $83.3bn had been raised by the target date of 2020, according to the OECD.

More recently, rich countries have pledged money to poorer nations to help shift their energy systems from coal to renewable sources through the Just Energy Transition Partnership.

But the vast sums of money needed to tackle the climate crisis have led countries including the US and Europe to lean more heavily on multilateral lenders. Governments have urged the World Bank to expand its remit to tackle “global public goods” such as pandemic preparedness and climate.

Duarte questioned whether leaders in the developed world were doing enough to create the political conditions for money to be invested overseas.

“People talk about the global public goods dimension of this, but are we doing enough to have a good amount of the population understand what this means? It means you have to invest elsewhere and not just in your own country. 

“You see the news, we are going to hit 1.5C [rise in global temperatures] before 2027,” said Duarte. “You need that group of global leaders who have internalised that this is existential, and act accordingly.” 

Last December, the US Congress pledged just $1bn to help poorer nations tackle climate change, falling short of President Joe Biden’s promise that Washington would spend more than $11bn annually by 2024, even as it passed a huge domestic clean energy spending package.

Duarte also called for more female leaders as she prepared to take over the GCF, which was embroiled in a sexual harassment scandal in 2020.

“The culture of the organisation is one of my priorities,” said Duarte, who comes to the role after running the $10bn Climate Investment Fund.

She was speaking before the latest allegations by female delegates of intimidation or harassment by their male counterparts at this month’s UN climate conference in Bonn, Germany.

Mexico, the US, UK, Germany, Peru and Canada are among two dozen countries that wrote to the UN last week calling for action to “ensure a harassment-free environment”.

The letter, seen by the Financial Times, calls for organisers to “pay particular attention to the way women negotiators are being treated in [UN Framework Convention on Climate Change] premises, inside and outside of negotiation rooms, ensuring that all participants feel part of a respectful and safe work environment”. 

Duarte said she hoped to see “more and more” women in leadership roles in the climate world, and cited research that found increased female empowerment was linked to better climate outcomes. 

“We do know that women make different decisions . . . why is it in general that when women have disposable income they invest more in education and health than men?” said Duarte.

“I’m not saying that we don’t have a very generous group of men up there, who see [climate change] as an existential threat,” said Duarte. “But I am confident if we saw more women we might see a more assertive response to what is an existential threat to our children.”