President Obama Proposes Important Investments in International Climate Action

President Obama's budget request includes critical investments in international climate action. The budget includes continued investments in the earlier mechanisms for supporting action to help developing countries reduce their emissions and adapt to the impacts of climate change. And, for the first time, the President has requested an investment in the Green Climate Fund (GCF) - the new multilateral fund which has received pledged investments from 31 countries. In total, President Obama requested $1.29 billion to support international action climate change. These investments are in America's interest as they help spur global action on climate change that is damaging the U.S. and countries around the world, companies tap into the growing demand for clean energy, and minimize the need for even greater investments to clean up the mess of extreme weather damages around the world.

Here is how the proposed budget is broken down:

First time contribution to the GCF of $500 million. The U.S. pledged $3 billion to the GCF as a part of the $10.2 billion pledged by 31 countries. The budget request outlines the first potential contribution of the US towards their overall commitment. The GCF is structured to help deliver critical change on-the-ground as it includes a number of strong and innovative structures including:

  • targeted efforts to help mobilize large private financing flows through innovative financing tools;
  • leveraging existing financing infrastructures so that there is no need for a large bureaucracy, unnecessary institutions, or duplicative efforts;
  • strong financial safeguards including an independent evaluation unit to ensure that funding is spent well;
  • contributions from a new group of countries including financing from several major emerging economies and maybe even the private sector; and
  • a clear focus on only funding actions that have a huge impact and truly transform the dynamic on the ground in key countries.

The GCF is an outgrowth of the fund launched by President Bush and Treasury Secretary Hank Paulson in 2008 - called the "Clean Technology Fund" - which has received bipartisan approval in all previous budgets. The GCF is one part of the effort to mobilize $100 billion per year by 2020, as outlined in the Copenhagen Accord, to help developing countries build a low carbon economy and address the impacts of climate change. It was an important part of the Copenhagen Accord and getting it up and running has been a key component of helping to secure a strong international agreement on climate change later this year.

Continued investments of $230 million in the multilateral Climate Investment Funds . In previous budgets the U.S. invested in the four Climate Investment Funds (CIFs) operated by the development banks. These funds support clean energy deployment, adaptation, and forest protection efforts in developing countries. The budget request proposes:

These various mechanisms each serve a different aspect of the problem. For example, the Clean Technology Fund helps mobilize large-scale emissions reduction efforts in a small number of countries such as a wind program in Mexico, solar in South Africa, and energy efficiency in Vietnam. Whereas, the Pilot Program for Climate Resilience (PPCR) helps developing countries become more resilient to the impacts of climate change.

Investments of around $350 million in continued bilateral efforts to address climate change. The US Agency for International Development (USAID) manages a variety of efforts to help developing countries combat climate change.

Multilateral and other funding to support other discrete climate actions, including:

  • a contribution of $25 million to the Montreal Protocol to support countries in phasing down ozone depleting gases that are also potent global warming pollutants;
  • continued support to the Global Environment Facility (GEF) of which $84 million goes to climate action programs operated by the GEF.
  • other climate actions supported by the State Department.

These investments are in America's interest.

The investments in clean energy deployment help create new markets for renewable energy and energy efficiency companies. The mechanisms supported by the US help key countries to develop tangible projects that will help transform markets for wind, solar, energy efficiency, and geothermal around the world. Leading U.S.-based companies are already tapping into the growing clean energy market and more are poised to join. U.S.-based companies have already taken advantage of these funds to tap into growing global markets.

Support for adaptation actions Increase the resilience of the most vulnerable countries to the impacts of climate change, avoiding much larger costs. Countries around the world are already feeling the impacts from extreme weather events caused by climate change and these impacts will get worse if critical steps aren't taken. Evidence from disaster response around the world shows that spending $1 today helps avoid around $7 of investments needed after the disaster hits. Upfront and early funding to assist countries strengthen their resilience will help countries avoid damages from climate change.

Helping tackle deforestation reduces a huge source of global warming pollution, addresses illegal logging, and ensures a deforestation-free supply chains. Deforestation is a major driver of climate change throughout the world. There are emerging signs of progress with key countries such as Brazil significantly reversing their forest loss in recent years. And major companies and countries have committed to end deforestation in their supply-chain by demanding products that aren't driving deforestation.

These investments help address the global challenge of climate change by supporting developing country efforts to build a low carbon economy and adapt to the impacts of climate change. President Obama's budget request recognizes these benefits.

We urge Congress to fully support these investments.