Why is the Green Climate Fund costing the U.S. a fortune?

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Why is the Green Climate Fund costing the U.S. a fortune?

Written by Scott Humor; Originally appeared at TheSaker.is

So far, the US government has paid $1 billion to the GCF and the Russian government paid nothing citing the need to review and evaluate this hair-raising financial and political mechanism.

In The Air Merchant, one of the most read novels of Alexander Belyaev a Soviet Russian writer of science fiction, a British villain Bayley uses a gigantic air-sucking device, built by Swedish scientist Engelbrecht to slowly steal the Earth’s atmosphere in order to condense oxygen into pill form and to set up a production of “air.”

Gradually, his manufacturing sucks up nearly all the air on the planet, making him immensely rich. At the end, he swallows a handful of his air pills killing himself, while the Russia’s intelligence team saves the planet by getting inside his fortified Arctic island, stopping the oxygen consuming production and releasing the stored oxygen back into the Earth’s atmosphere.

What makes this 1929 book current is that the air-pills manufacturing  process caused severe weather fluctuations accompanied by storms and hurricanes, torrential rains and droughts, and that made humanity to pay up big money to Mr. Bayley.

What has stuck with me during all these years since I read this novel as a kid was an understanding that manufacturing processes can be manipulated to achieve weather-changing results, and that a terrified humanity would pay lots of money to someone who would promise them to fix the weather.

An immense financial scheme that we know of as “Climate Change” is set up with the Green Climate Fund (GCF) as its financial instrument and the Paris Accord as its political instrument to make governments funnel $100 trillion of their public money into private pockets in the next 20 years.

It’s almost as much as it was funneled, by some estimates, from Russia’s economy into Western coffers during the 90s and the beginning of the 00s.

It’s all in jeopardy now due to the decisions of the Russian government not to ratify the Paris Accord pending their assessment of the financial aspect of the deal, and also due to the Trump’s administration emergency decision to withdraw the US signature from the Paris Accord and with it to seize the financial support of this money laundering scheme.

The sense of emergency with which President Trump addressed his constituents on June 1st was palpable: “… in order to fulfill my solemn duty to protect America and its citizens, the United States will withdraw from the Paris Climate Accord…”

“Thus, as of today, the United States will cease all implementation of the non-binding Paris Accord and the draconian financial and economic burdens the agreement imposes on our country.  This includes ending the implementation of the nationally determined contribution and, very importantly, the Green Climate Fund which is costing the United States a vast fortune.”

The feedback of his decision was hysterical to put it mildly. Every time we witness such an orchestrated voices of the EU apparatchiks and the corporate media like a Greek tragedy chorus predicting the end of the world, we know that somewhere, somehow, another public money faucet feeding the deep state and its militant operations around the world has been cut.

In the middle of this pay-for-weather financial scheme sits the Green Climate Fund or GCF.  The UK Overseas Development Institute (ODI) characterizes the Green Climate Fund (GCF) as “the newest actor in the multilateral climate finance architecture and the entity of the Financial Mechanism of the UNFCCC.”

According to the mission statement on its website: “The GCF was formally established in 2010 to contribute to the achievement of the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) by financing climate mitigation and adaptation initiatives in developing countries.

Russia is classified by UNFCCC as an Annex I party and the “economies in transition” (EITs).

The Annex II parties, including the EU and U.S., are required to provide financial and technical support to the EITs and developing countries to assist them in reducing their greenhouse gas emissions (climate change mitigation) and manage the impacts of climate change (climate change adaptation).

President Trump in his announcement of U.S. withdrawal from the Paris Agreement has criticized the Green Climate Fund, calling it a “scheme to redistribute wealth from rich to poor countries.”

On a face of it, the Paris Accord looks like a good deal for the developing nations to receive new technologies, but in reality it’s not, since being a financial pyramid scheme  designed to make the sovereign governments to shoulder all the financial obligations and risks without any ways to oversight and control the process. It shouldn’t come as a surprise that private Western companies and their shareholders are revealed to be the main beneficiaries of this scheme. Add to this a political pressure on the sovereign governments and the direct interference of the GCF with their law enforcement.

A current chairperson of the GCF is Howard Bamsey, “a prominent figure in climate change diplomacy.”  His actual job title is the Executive Director of the GCF Secretariat, located in Songdo, Republic of Korea.

The Harvard Business School graduate, H. Bamsey had an amusing albeit slightly mystifying career in the field of “climate change.”  He started as an Australian Ambassador to the UN in 1995. moved to serve as a Deputy Secretary of the Department of Climate Change for the Australian Government in 1995 – 1997, as a  Special Envoy on Climate Change 2007 – 2010 and a Special Adviser, Sustainable Development Department of Foreign Affairs and Trade of the Australian Government, after that he was appointed as a Special Adviser on Green Growth in the AusAID in 2011 – 2013 and a Director General of  the Global Green Growth Institute.

Among his honors and awards his Wikipedia page lists Member of the Order of Australia, established by the Elizabeth II, Queen of Australia, and given for ‘Service in a particular locality or field of activity or to a particular group.”

Curiously, I couldn’t find his name on the List of the Members of the Order of Australia published by Wikipedia.

In 2017 administrative budget of the GCF is $45.7 million  with the  total allocation for 2017 to be USD 45,666,356.

Mr. Bamsey’s  GCF Board Co-Chair Ayman Shasly is representing Saudi Arabia.  Needless to say that the fund activities are being enthusiastically supported by the Australian coal producers as much as the Saudi Arabia’s petroleum and natural gas producers.

Just to give you a glimpse into how public money is being funneled into a few chosen private hands, here an assessment made by an Australian consumer watchdog the Environment Victoria.

Since the 2012 introduction of the carbon tax, states the EV, “electricity generators have passed on over 100% of the carbon price to retailers, while keeping $1 billion in cash compensation payments aimed to help heavy polluters make a transition to low emission generation.

The Australia’s Energy Market Operator  suggests that prices have increased by AUS$21 per MWh since the tax was implemented. “Unless compensation payments from the Energy Security Fund are reviewed, generators could make windfall profits between $2.3 billion to $5.4 billion, depending on a future carbon price.”

That might explain why the head of the GCF Board and the Developed country Co-Chair Ewen McDonald  are both Australians, working hard and helping their manufacturers to get ahead of the herd.

Just this one example shows that a map of green climate investments is very misleading, and doesn’t reflect the reality of the money flow.

The mechanism of the pay-for-weather scheme in great details described in a book titled the Financial Engineering of Climate Investment in Developing Countries written by Dr. Søren E. Lütken, a  Senior Climate Finance Adviser at UNEP DTU Partnership. UNEP DTU Partnership (formerly UNEP Risø Centre) is a UNEP collaborating centre operating under a tripartite agreement between Ministry of Foreign Affairs, Denmark, UNEP and the Technical University of Denmark (DTU), and is a leading international research and advisory institution on climate, energy and sustainable development.

Dr. Lütken’s book is a treasure-trove of insights into how this financial scheme is being “engineered” and how the money is being flown through its pipes.

Why would anyone want to mine gas and oil, when you can mine money instead?

Once awarded by the GCF’s opaque decision making group, the money are being paid into the private hands automatically without demands for benchmarks or for any measurable results.

For example on the page 131, the author argues that implementation of the RBF or Result Based Financing, instead of automatic payments as it’s practiced now, would be a bad idea. “…result based finance — implying that a financing plan for a certain activity can be in jeopardy if the private company does not perform according to specifications — would only lead to potential bankruptcy, which would be in neither of the parties’ interest.

Interim bridge financing needs to be established, and a bridge financier will have to believe, more so then the result-based financier who seems to not believe, in the ability of the private investor to deliver the results.”

The finance vehicles of the pay-for-weather scheme are set up in such way as to create a permanent money drain on public resources.

As bank loans are in actuality just a give-away with the public financial backing, the other form of financing, bond issuance, has even less appeal.

“In this case it would be a developed country green bond. Mixed credits with green bond financing  could be an option for the GCF to activate the institutional investors in supported finance.

The grant element addressing the fact that the financing to cover the incremental cost in whichever way and whenever it materializes in the financing structure or secularization model, is not an investment. It is a constant drain, and the financing to cover it may have to be injected somewhere in the financing plan. The choice stands between the four distinct levels in the financing value chain.

Due to its nature (a constant drain) it will have to be provided by national or international public sector institutions as support of the asset (GCF incremental costs), support of the finance, or support of the risk cover through government-backed guarantees.  The grant element in the mixed credit corresponds to support of the finance.” p. 126

As for the government-donors overseeing their “climate investments” it’s not just made to be severally limited, but outright impossible.

“A subgroup for the Private Sector Facility has been established among the GCF Board’s 24 members.  While the subgroup may have more in-depth interaction with a private sector, the GCF Board keeps such interactions at a minimum, only occasionally allowing two active observers from civil society organizations and two from private sector organizations, representing developed and developing countries, to participate in the meetings.” p. 128. “This may for instance  be the Third World Network and the Sierra Club, representing civil society, and private sector representatives from the Climate Markets and Investment Association (CMIA) and the International Chamber of Commerce.”

Even more troubling that in addition to the insertion of a financial drain to public money and blocking the sovereign governments from control and regulation of their payments for weather,  the GCF sets itself as a supranational entity capable of controlling  the national law enforcement under the guise of the risk reduction guarantee.

“Other types of risks that the ECA’s (Energy Coordinating Agency) do not cover, which are clear objects for the GCF involvement, are changes in framework conditions that do not stem from changes of law – for instance, subtle changes in practices of law enforcement, which (normally)  would be beyond coverage from the ECAs.”

According to Lütken, what makes the GCF a major player is a potential to manipulate law enforcement on both sides, the donor countries and the host countries, by using the threats to their “standing” by threatening to damage their attractiveness to other NAMA-related financing, and “possibly the standing in international climate negotiations. Here the GCF would be a central player…”

Featured Image: Paris Accord promised lands (in blue)

Scott Humor

Director of Research and Development

author of The enemy of the State

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In case you have forgotten what happened in Ukraine, this book should refresh your memory with the incredibly precise and humorous chronicles: ANTHOLOGY OF RUSSIAN HUMOR: FROM MAIDAN TO TRUMP

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