Australia has decided to resume funding for the United Nations' Green Climate Fund (GCF) as it seeks to lock in the support of Pacific nations for its 2026 climate summit bid.
Foreign Minister Penny Wong disclosed that a "modest contribution" will be made to the GCF by the year's end, marking a policy shift five years after former Prime Minister Scott Morrison withdrew Australia's financial support.
The announcement comes ahead of the Pacific Islands Forum scheduled for next month in the Cook Islands. During the forum, Australia will likely face renewed pressure to halt new fossil fuel projects, a sector contributing $245 billion annually to the nation's economy.
Regional leaders have been notably critical, urging their constituents to withhold support for Australia's COP31 hosting bid until a commitment to stop fossil fuel extraction is made.
"We have taken on board feedback from our partners in the Pacific on the best ways to direct our climate finance efforts," said a spokeswoman for Senator Wong.
Despite the strategic shift, Australia has yet to secure explicit backing from Pacific nations, who remain sceptical of Australia's climate commitment level. The move follows scrutiny of the GCF's effectiveness and investment strategy, at a time when the international community is looking increasingly towards private-sector investment as a solution for emissions reduction.
The decision to re-enter the GCF aligns with recent pledges by Britain and the United States, which committed £3.2 billion and US$1.6 billion respectively.
A turning point in climate policy
This development marks a turning point in Australia's climate policy, especially since Climate Change Minister Chris Bowen revealed last year the country's intention to host the 2026 United Nations climate conference with Pacific nations.
The overarching goal, he noted, is to "restore Australia's reputation and increase international engagement on climate change and energy".
Greenpeace cautiously welcomes decision
The decision to rejoin the Green Climate Fund was welcomed by Greenpeace, but the organisation says it should be backed by a ban on new fossil fuel developments. Greenpeace Australia Pacific’s Shiva Gounden said in a statement:
“We cautiously welcome the announcement that the Australian government is listening to the vocal calls of Pacific nations and rejoining the Green Climate Fund — the primary fund globally for climate finance and a vital tool in supporting climate-impacted nations like the Pacific.
"It is the right decision. Pacific communities are bearing the brunt of the climate crisis as they experience more severe storms, sea level rise and loss of agricultural land. This has a profound impact on the culture, livelihoods and unique way of life of Pasifika people who hold a deep connection to the land and oceans.
“While the commitment to a ‘modest contribution’ is positive, the key demand we are consistently hearing from Pacific leaders is for no new fossil fuels. Contributing to the fund without stopping all new coal and gas projects is like showing up at a fire with an extinguisher in one hand and a flamethrower in the other.
“We urge the Australian government to go a step further and heed Pacific demands to end all new fossil fuels.”