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Thursday, July 28, 2016
- The United Nations’ key mechanism for funding climate change-related mitigation and adaptation in developing countries is now ready to receive funds, following a series of agreements between rich and poor economies.
The agreements covered administrative but potentially far-reaching policies that will govern the mechanism, known as the Green Climate Fund (GCF). This forward momentum comes just weeks ahead of a major “pledging session” in Berlin that is meant to finally get the GCF off the ground.
“The fund now has the capacity to absorb and programme resources that will be made available to it to achieve a significant climate response on the ground,” Hela Cheikhrouhou, the GCF’s executive director, said Saturday following a series of board meetings in Barbados.
The GCF constitutes the international community’s central attempt to help developing countries prepare for and mitigate climate change. The undertaking thus includes an implicit acknowledgment by rich countries that the developing world, although the least responsible for climate change, will be the most significantly impacted.
At the Copenhagen climate summit in 2009, donors agreed to mobilise 100 billion dollars a year by 2020, in an undefined mix of public and private funding, to help developing countries. The GCF is to be a cornerstone of this mobilisation, using the money to fund an even split between mitigation and adaptation projects.
The GCF opened a secretariat last year, in South Korea, but pledges have since come in slowly. Currently, the aim is to get together 15 billion dollars as starter capital, much of which will have to be achieved at the November pledging session.
The fund’s capitalisation did get a fillip last month, when France and Germany pledged a billion dollars each and lesser amounts were promised by Norway, South Korea and Mexico. On Wednesday, Sweden pledged another half-billion dollars, aimed at setting “an example to … other donors.”
Still, that brings the total funding for the GCF to less than three billion dollars, under a fifth of the goal for this year alone.
“The good news is that this meeting finished laying a strong foundation for the fund,” Alex Doukas, a sustainable finance associate with the World Resources Institute, a think tank here, told IPS. “It’s now nearly ready to go – but it can’t get far without ambitious pledges in November.”
Significant attention is now shifting to the United States and European Union, which have yet to announce pledges. Anti-poverty campaigners have estimated that fair pledges would be around 4.8 billion dollars for the United States and six billion dollars for the European Union.
The GCF now has the institutional capacity to receive the funding around which its operations will revolve, but important decisions remain regarding how the fund will disburse that money.
“There’s now more clarity on how the fund will invest, but little guidance on exactly what it will invest in,” Doukas, who attended last week’s board meeting in Barbados, says. “The board has serious homework between now and its next meeting in February to ensure that it has rules in place to prioritise high-impact climate solutions that also deliver development benefits.”
Still, some important initial headway was made in Barbados around how these projects will be defined. Indeed, development advocates express cautious optimism the new agreements will put greater control over these decisions in the hands of national governments.
For instance, projects green-lighted by the GCF will now be required to have a “no objection” confirmation from the government of the country in which the project will be based.
“If you do not have the no-objection [requirement], the funding intermediaries will be able to impose their own conditionalities, even their own programmes, on a country,” Bernarditas Muller, the GCF representative from the Philippines, said during negotiations, according to a civil society summary.
Observers say this agreement came about because developing countries banded together and pushed against demands from rich governments. (The GCF board includes 24 members, half from poor and half from rich countries.)
“One thing that was different in this meeting was the willingness of developing countries to take a stand for certain principles,” Karen Orenstein, an international policy advisor with Friends of the Earth who attended the Barbados discussions, told IPS.
“The no-objection procedure in particular is something we’ve been fighting for, for a long time. If an active no-objection is not provided within 30 days, a project is suspended – that is quite important.”
Still, Orenstein, too, worries that significant decisions have against been pushed off to future meetings of the GCF board.
“The fund still leans too heavily towards multilateral development banks and the private sector,” she says.
“It’s not that the GCF shouldn’t be appealing to the private sector, but we want to sure that the priorities are being driven by developing countries. Even though we have these new agreements, there’s still not nearly enough emphasis on having priorities be set at the country level and below.”
New development discourse
At the same time, under this weekend’s agreements developing countries will now be able to access funding directly from the GCF, rather than having to go through an intermediary. In addition, monies pledges to the fund will not be able to be “earmarked” for particular uses by the donor government.
“Traditionally, a lot of funds for climate change have been delivered through multilateral organisations. They haven’t necessarily done a bad job, but in many cases there’s a trade-off between a country’s priorities versus that of the organisation’s,” Annaka Carvalho, a senior programme officer with Oxfam America, a humanitarian and advocacy group, told IPS.
“Making sure that countries are in the driver’s seat in directing where these resources are going is really important. Ultimately, only national governments are accountable to their citizens for delivering on adaptation and investing in low-emissions development.”
Carvalho, who was also at the Barbados negotiations, says that the opportunity once the GCF gets off the ground isn’t only about reacting to climate change. She says the fund can also help to bring about a new development paradigm.
“We’ve been hoping the fund will act as a catalyst for shifting the development discourse away from the forces that have caused climate change and instead towards clean energy and resilient livelihoods,” she says.
“A core part of the fund is supposed to realise sustainable development, but there’s always this line between climate and development. In fact, disconnecting these two issues is impossible.”
Edited by Kitty Stapp
The writer can be reached at firstname.lastname@example.org