The green climate fund (GCF) refused an explicit ban on fossil fuel projects at the contentious meeting in Songdo, South Korea, last week.
“It’s like a torture convention that doesn’t forbid torture,” said Karen Orenstein, a campaigner for Friends of the Earth US who was at the meeting. “Honestly it should be a no-brainer at this point.”
The fund was set up as part of the ongoing UN climate negotiations to help developing countries finance clean energy and measures to help adapt to climate change.
Its website states: “The fund will promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions.”
It has struggled for support, however, with industrialised countries paying only about 1% of the $10.2bn (£6.9bn) committed at the UN climate negotiations in Lima last December. The deadline for contributions is 30 April.
With no clear rules on climate finance, much of the funds can be channelled to dirty energy, campaigners say.
Japan designated $1bn in loans for coal plants in Indonesia as climate finance, according to reporting by the Associated Press. Last week Japan counted another $630m in loans for coal plants in India and Bangladesh as climate finance.
Japan claims the projects are less polluting than older coal-fired plants and so qualify as clean energy. “Japan is of the view that the promotion of high-efficiency coal-fired power plants is one of the realistic, pragmatic and effective approaches to cope with the issue of climate change,” Takako Ito, a foreign ministry spokeswoman, told AP.
Campaigners say the lack of clear rules makes a mockery of the fund. “Many people think it’s crazy that they are not going to have a no-go zone,” Orenstein said. “The fact that the GCF won’t say it is problematic both for the integrity of the fund, and also reputational risk.”
Japan, China and Saudi Arabia opposed such a ban, she said.
The board agreed to set a minimum benchmark for the greenhouse gas emissions cuts that projects must achieve, but not until 2016. Meanwhile, they will apply an “assessment scale” to the first projects, which are set to be approved in October.