EU fails to resolve dispute over UN climate fund seats

LONDON/BRUSSELS Fri Mar 30, 2012 1:15pm EDT

LONDON/BRUSSELS (Reuters) - European Union ambassadors failed to resolve a dispute over the allocation of seats on the United Nations' Green Climate Fund (GCF) board on Friday, possibly undermining the bloc's credibility in international climate talks.

The EU envoys were meeting for the second time in a week to decide which European nations will be represented on the governing board. This has 12 seats for developing countries and another 12 for developed countries.

"Despite willingness to compromise and adequately share board seats, it has, unfortunately, not been possible to come to an agreement within the EU," the EU's Danish presidency said in a statement.

As a result, the EU will miss a March 31 deadline for making a joint proposal on board membership, and EU governments and the bloc's executive will now have to negotiate directly with other developed countries over who gets the seats.

"For this reason, respective nominations from the group of developed country parties will be withheld until these discussions have taken place," delaying the entire process, the Danish presidency said.

U.N. climate talks in Durban last year agreed on the design of the fund, which is aimed at channelling up to $100 billion a year to help developing countries adapt to climate change.

Disputes of this kind could both slow the process towards the launch of the fund in 2013 and give other countries the impression that the EU is stalling on climate finance. "It shows that the EU unity we had in Durban has been eroded and that could damage Europe's image in global climate change talks," Danish presidency spokesman Jakob Alvi said.

The fund's first board meeting is due on April 25 to 27, a U.N. spokesman said, subject to confirmation next week.

Despite the EU's failure to reach an agreement, it should not affect the number of seats it will be allocated on the GCF board, he added.

SEAT DISPUTE

Thirteen of the 27 EU countries had requested a board seat, to ensure they had a say in funding decisions.

A draft EU document, seen by Reuters this week, shows that EU member states and Switzerland might together be able to obtain seven full seats plus associated alternating seats between them. Denmark had proposed that Britain, Germany and France, as the likely biggest financial contributors, should hold a full seat each and share three further alternating seats with another EU country.

But an EU source involved in the discussions said Germany - backed by France - refused to share its seat with any other EU country and insisted on a permanent position on the board, ending any chance of an EU compromise.

Poland also insisted on having a full seat, and told the meeting that in the absence of a joint proposal it would put itself forward to the U.N. in a separate bid outside the EU, sources said under condition of anonymity.

Poland, which relies heavily on coal production for its energy needs, says its economy would develop much more quickly if it wasn't for the EU's climate policy, which aims to make coal power generation more expensive.

"(The Commission) has tried to rob us so many times before. This time around we want to wear a second jacket - just in case - and let nothing we are eligible for miss us," a Polish government source told Reuters.

(Additional reporting by Gabriela Baczynska in Warsaw, editing by Sebastian Moffett)