Weak economic conditions pose problems for UN climate fund Weak economic conditions are going to be a drag on the world's newest global climate financing body as it finally opens its doors for business, its head has warned. "Grants and concessional loans are scarce resources, especially in a world where many of the traditional developed country contributors are still recovering from the global financial and economic crisis," said Hela Cheikhrouhou, executive director of the UN's Green Climate Fund. "It is not an easy conversation," she said of her plans to start talking to potential donor countries for a first round of pledges to the fund, which is expected to handle much of the $100bn a year wealthy countries have said they will raise by 2020 to help developing countries deal with climate change. Ms Cheikhrouhou, a Tunisian national who has worked at Citigroup, the World Bank and most recently the African Development Bank, said she hoped signs of economic recovery, and the emerging threat of climate change, would allow the fund to secure enough money to make a difference. A failure to act quickly has its own costs, she warned. "It's like a snowball effect: the more you delay action the more the action will be costly," she said in an interview with the Financial Times. Nearly four years after the Green Climate Fund was first proposed, it is still not clear where even the first $100m will come from for the Green Climate Fund, which is to be based in South Korea's Songdo development in Incheon. Speaking from her temporary office in Bonn, Ms Cheikhrouhou declined to say how much she was aiming to raise in the first round of capital raising, which she hopes will close late next year. The estimates are not set in stone for how much is needed in terms of investment in low carbon and climate resiliency action. It really is dependent on many factors, including what the science is telling us," she said. It's like a snowball effect: the more you delay action the more the action will be costly HeLa Cheikhrouhou, executive director of the UN's Green Climate Fund Some climate experts question whether even $100bn a year is going to be enough to help poorer countries adapt to the impact of a changing climate, and shift their economies away from a reliance on fossil fuels. "The Green Climate Fund won't be huge in terms of overall funds," said Lord Stern, British economist, adding it could still play a valuable role by kick-starting projects that more conservative financing bodies might be wary about. The fund's birth has been strained, not least because of the difficult UN political terrain its backers have had to traverse. Many developing nations are wary of any moves to encourage private climate investment and have tried to ensure the UN will have a veto over potential Green Climate Fund projects, a move private investors warned would leave the fund "strangled at birth." Depending on how much money the fund ends up disbursing, however, it could have a substantial impact on low carbon investment in many parts of the world. One of its goals is to help developing countries make the policy shifts necessary for low carbon goals. Ms Cheikhrouhou, who worked on large renewable energy projects in her previous job at the ADB, said that could involve helping them fund a shift away from fossil fuel subsidies and towards renewable energy systems such as solar parks or wind farms. The fund is also going to look at specific infrastructure projects that are deemed likely to lower greenhouse gas emissions, she said, explaining this could include high-speed trains. But it will also focus on helping countries adapt to climate change by investing in projects that improve agricultural resilience or the capacity to recover from natural disasters, for example. Apart from its role in funding developing countries, the Green Climate Fund is expected to play an important role in acting as a single clearing house for what can often be a confusing and overly complicated climate financing system. Late on Tuesday, Christine Lagarde, the International Monetary Fund head, said it too could play a bigger role in protecting the planet from environmental damage. Mrs Lagarde's speech at the UN on Tuesday was the most direct example yet of the IMF's foray into focusing on climate change, after it published a research paper on energy subsidies in March. "The IMF is not an environmental organisation, but we can help here," Mrs Lagarde said, according to prepared remarks at a UN forum on sustainable development. One example is by trying to shine a light on the murky cobweb of energy subsidies. The IMF has made a bigger push in recent years to urge countries to rein in energy subsidies, which rarely help the most vulnerable people in a country and eat up valuable government money that could be better put to use for education or healthcare.