The analysis identified a budget deficit of at least 57 million euros ($61.53 million) for 2024, which constitutes nearly half of the funding required for the U.N. Framework Convention on Climate Change (UNFCCC) secretariat to conduct annual climate negotiations among nearly 200 countries and to assist in implementing any agreements reached.
Budgets established for the UNFCCC cover a two-year period, with a total budget of 240 million euros for 2024-2025, combining the body's three main budget lines, and approximately half of that expected to be allocated for this year.
Member countries of the UNFCCC have approved the budget and are anticipated to contribute the necessary funds. The budget encompasses a core fund that member countries are required to contribute to, a supplementary fund that relies on voluntary donations, and another voluntary fund aimed at assisting diplomats from less affluent countries in attending U.N. climate negotiations.
While some countries, like Japan and Germany, have exceeded their payment obligations, others, particularly the United States and China—the world's two largest economies and leading greenhouse gas emitters—have not yet fulfilled theirs. Payments are due each year on January 1.
The secretariat, established under the 1992 UNFCCC treaty, serves as the primary body for coordinating international efforts to reduce climate-warming emissions and organizing summits where countries can hold each other accountable.
The budget shortfall has compelled the secretariat to scale back its operations, including reducing conference hours at its headquarters in Bonn, Germany, and canceling regional "climate week" events this year. These regional summits, held in countries like Kenya and Malaysia last year, generated billions of dollars in investment pledges for renewable energy, reforestation, and other climate initiatives.
"We continue to work tirelessly, but our resources are increasingly overstretched," said a UNFCCC spokesperson who preferred to remain anonymous, in response to the Reuters analysis.
Germany's climate envoy, Jennifer Morgan, urged countries to seek a solution. "We need a climate secretariat that can perform its functions," Morgan stated. "We're facing a massive crisis globally."
As of this month, the UNFCCC had received 63 million euros ($68 million) in contributions for 2024. Officials from the United States and China informed Reuters that they would make their payments this year but did not specify when. State Department spokesperson Melvin Felix mentioned that the United States "still intends to provide a substantial contribution" to support the secretariat this year. The Chinese foreign ministry affirmed that China "will fulfill its obligations as always."
As of October, the United States still owed 7.3 million euros to the UNFCCC's 2024 core budget, having contributed 2.5 million euros to its supplementary budget. China still owed 5.6 million euros to the core budget, having contributed 497,000 euros to the supplementary fund.
Even if both nations meet their obligations this year, it would not suffice to fill the gap in the UNFCCC's overall budget.
Countries may experience delays in meeting payment deadlines for logistical reasons, such as national budget cycles not aligning with the calendar year or requiring additional legislative approval for payments. National elections can also cause delays.
The Reuters analysis revealed that in previous years, such issues were generally resolved before October, and this year's delays represent the most significant in UNFCCC history regarding the amount of the overall budget that remains unfunded.
The UNFCCC budget has more than doubled from approximately 102 million euros during 2014 and 2015, amid a surge of new global climate agreements.
Reuters interviewed over a dozen diplomats involved in U.N. climate negotiations, along with UNFCCC representatives, most of whom spoke anonymously. Eight of the diplomats expressed concerns that the funding gap could undermine U.N. climate negotiations at a time when national governments are seeking trillions of dollars in climate investments.
The diplomats highlighted examples, previously unreported, of how the financial constraints are already impacting UNFCCC operations, such as forcing the secretariat to extend employment contracts for only a few months or restricting its ability to fund travel for representatives from poorer nations to climate talks.
The UNFCCC confirmed exclusively to Reuters a $2.2 million (2.04 million euros) shortfall in the fund designated to cover costs for hundreds of diplomats attending climate talks, including the COP29 summit next month in Baku, Azerbaijan.
Mohamed Nasr, Egypt's lead climate negotiator, stated that any weakening of the UNFCCC's efforts due to insufficient funding would mean "creating space for weakening climate change action globally."
"This process is not only about negotiating the decisions but also about the global pressure on leaders to deliver," Nasr added.
Over the years, as countries have voted to approve more climate negotiations and events for the UNFCCC to oversee, they have gradually increased the organization's budget needs while resisting increases in their own funding obligations. Consequently, the UNFCCC has become increasingly reliant on voluntary donations.
For instance, the UNFCCC has been managing discussions to finalize rules for trading carbon credits—a goal outlined in the landmark 2015 Paris climate agreement and furthered at the COP26 U.N. climate summit in Glasgow in 2021. Another ongoing effort involves coordinating negotiations for a climate finance target that countries are expected to approve at COP29.
The split budget—combining obligatory and voluntary contributions by nations—enables some countries to route UNFCCC payments through different government ministries or approval processes. Countries contributing to the supplementary budget can also designate how they wish their funds to be utilized, although these requests are not made public and are not always binding.
In addition to the missing core budget funds, the UNFCCC's supplementary budget is also significantly underfunded. By October 1, the secretariat had received only 41 million euros out of its supplementary budget of 152.3 million euros for 2024-2025.
Financial difficulties were evident in March when the UNFCCC appealed for urgent funds from wealthy nations. Britain and Germany responded with a total of 1.5 million euros, enabling the UNFCCC to support delegates at the June talks in Bonn.
"Much more pledged funding needs to be delivered to ensure all parties—especially the most vulnerable—are adequately represented throughout the process this year," UNFCCC Executive Secretary Simon Stiell stated in an update sent to governments in May.
With the UNFCCC's finances in the red, COP29 host country Azerbaijan announced last month that it would assist in ensuring countries can attend the November summit, pledging to cover travel and hotel expenses for four delegates from each of the 40 small island developing states participating in the talks.
Azerbaijan, a middle-income country, would also be eligible for UNFCCC financial aid for its own diplomats.
The UNFCCC is also implementing cost-cutting measures. It managed to conduct the all-country talks in Bonn in June but canceled its usual video livestream for remote participation, which five diplomats involved in the discussions labeled a cost-saving measure.
Cost-saving strategies have reduced the secretariat's supplementary budget needs for 2024-2025 by over 20 million euros, according to a UNFCCC spokesperson.
Some diplomats expressed that these cuts have compromised representation by poorer countries.
"There are often policy teams that expect to watch the proceedings and provide support remotely, and you lose that entirely," said Daniel Lund, an adviser to Fiji in climate negotiations, referring to the cancellation of remote participation.
When countries signed the UNFCCC treaty in 1992, they assigned it a core task: to facilitate intergovernmental dialogue and cooperation in addressing climate change. Those talks have since led to more global agreements, such as the Paris pact and last year's COP28 agreement on transitioning away from fossil fuels.
Stiell, the head of the UNFCCC, has lamented that financial contributions from countries have lagged despite governments asking the organization to take on more work.
"This approach has its logical and human limits," Stiell stated in a speech in June.
A few countries have contributed more than their share. Japan voluntarily contributed 11 million euros beyond its core budget payment of 3 million euros, while Germany provided 2.3 million euros for the core budget and an additional 7.3 million euros for the supplementary fund.
One diplomat suggested that the UNFCCC could strengthen its case for a larger core budget by practicing more frugality, such as negotiating with COP summit hosts for lower hotel rates for UNFCCC-funded delegates. Others noted that the organization has not yet fully implemented recommendations from U.N. auditors regarding areas such as staff selection and employee benefits.
When asked about such criticisms, the UNFCCC spokesperson indicated that the increased requests for the organization's work demonstrate a "vote of confidence."
"However, when funding is not increased to match, and many existing funding pledges are not fulfilled on time, this causes major inefficiencies, as more time must be spent stretching and reallocating existing resources at a time when many staff are already working literally around the clock," the spokesperson added.