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The Green Climate Fund - momentum for change?

16 Dec 2014

Amidst the ongoing UNFCCC climate negotiations, the most recent round finishing in Lima, 30 of the most developed nations have pledged just over $10 billion USD to the Green Climate Fund. The fund, which will be dispersed over four years, aims to provide support to nations who are both the least to blame for, and at most risk from, climate change. But the pledges thus far are well short of the $100 billion USD a year commitment made at the 2009 Copenhagen conference. A recent UNEP report has argued that costs will grow, well beyond the 2020 period that the Green Climate Fund currently runs. They forecast that $250-500bn USD per year could be required from 2020 onwards, and these already high figures assume that action to forestall two degrees of warming will be taken. Countries in the Global South have argued for greater ambition, with Pa Ousman Jarju, The Gambia's Minister of Environment, Climate Change, Water Resources, arguing in an interview with IIED’s Camille Toulmin that in the lead up to next year’s Paris COP, now is the time to “send tangible signals that we are serious about climate action and committing to a new agreement”.

In negotiations to set up the fund’s governing principles, divisions have been exposed, particularly between developed and developing countries. In discussions around voting powers on the board, developed countries wanted power linked to contributions; thus giving them a steering hand. Developing countries fiercely opposed this step, which would have severely lessened their influence. There was conjecture over the overall purpose of the fund, with the EU and Japan arguing that the fund should concentrate on mitigation, whereas countries like Brazil and Nicaragua countered that adaptation could prove crucial to any possible climate deal struck in Paris in 2015. In the lead up to the COP20 negotiations in Peru, groupings like the Association of Small Island States appealed for dedicated adaptation funds for expected loss and damage that will occur. Ultimately, it has been decided that 50 per cent of the funding would go to adaptation.

There has also been friction over how proposals would be assessed, and who would make ultimate decisions over funding.  Developing countries have argued that projects should not be forced to prove their commercial viability, for this is the stumbling block that many countries face in competing against projects in the developed world.  As reported by the IIED in November, developing countries have so far successfully resisted attempts by developed countries to have partial control over where their contributions went. Developing countries successfully argued for the funds to be dispersed through national and sub-national bodies rather than through large multilateral institutions. In the initial stages of negotiation a 'no-objection' procedure for dispersing funds was initiated; giving responsibility to a country's ‘National Designated Authority’ to provide a letter of approval to the GCF secretariat regarding a particular project.  70 Countries have already nominated a NDA or similar body to administer funding proposals. The board decided that a number of organisations also accredited by other major funds like the Global Environmental Facility could fast-track projects. However developing countries argued that favouring such institutions over national based organisations failed to deliver ownership over schemes, and lessened the possibility for capacity building.

Some of the issues already raised in negotiations will be encountered in the initial life of the GCF, and the fund will need to not only fast track projects but build capacity at a national level to oversee projects. This challenge was spelled out by Héla Cheikhrouhou, GCF's Executive Director, when she said “the GCF will have to accomplish in nine months what it would normally take three years to do, such as accredit entities, complete portfolio details and assess proposals”. As reported by the Ecosystems Marketplace, the first fast tracked projects could be REDD+ projects, with land use and forestry management schemes being headlined as priority areas by the GCF, with a results-based payments system being adopted.

Those countries and communities most vulnerable to the effects of climate change will expect the GCF to soon start dispersing funds to projects, and that the commitments made during the Lima COP negotiations snowball into something much more substantial in coming months ahead of next year’s Paris conference.