Green Climate Fund in the Spotlight at G-20 Leaders' Meet
US President Barack Obama and Japanese Prime Minister Shinzo Abe on Saturday pledged US$3 billion and US$1.5 billion respectively to a multilateral fund geared towards helping developing economies scale up low-carbon growth models.
“Along with other nations that have pledged support, we’ll help vulnerable communities with early-warning systems, stronger defences against storm surges, and climate-resilient infrastructure,” Obama said, acknowledging the systemic role of the Green Climate Fund (GCF), as the new instrument is formally known.
The two leaders on Saturday also encouraged other countries in a position to do so to come forward with GCF contributions.
The funds will be used to foster systemic economic transformation, such as by leveraging private sector investment to ramp up green infrastructure and deploy clean energy technology.
“We are doing this because it is in our national interest to build resilience in developing countries to climate change,” a senior US official told The New York Times on Saturday.
Saturday’s climate funding drive came just ahead of the formal opening of the annual meeting of heads of state and government of the Group of 20 (G-20) major advanced and emerging economies held over the weekend in Brisbane, Australia. A number of commentators remarked on the timing of the move given the perceived reluctance of the host nation to include too much climate change on the agenda, according to reports.
Saturday’s joint announcement brings the total finance promised to the instrument up to US$7.5 billion, in a development heralded as an important boost for talks towards a global climate deal. Some US$1.3 billion had already been offered up by eight countries at a special UN climate summit in September, including US$1 billion from France, adding to a US$960 million pledge made by Germany at the end of the summer. (See BioRes, 30 September 2014)
A product of the 2010 round of climate talks, the GCF is geared toward helping rich nations make good on a pledge to set aside US$100 billion per year by the end of the decade for climate mitigation and adaptation in the world’s poorest countries.
However, while the institutional arrangements for the fund were finalised this past May, initial offerings proved slow. Some developing countries have warned that the capitalisation of the Green Climate Fund with at least US$10 billion by December would be a crucial part in ensuring success in ongoing multilateral climate talks, being conducted under the banner of the UN Framework Convention on Climate Change (UNFCCC). (See BioRes, 21 May 2014)
The financial capital required to tackle climate change, particularly for poorer economies, has been among the main hurdles in the UNFCCC discussions given that the issue sits at the nexus of aid and climate politics.
Predicting the exact climate mitigation and adaptation costs is an uncertain business, given the number of variables and shifting risk factors, although some attempts have been made. A report by the Potsdam Institute for Climate Impact Research in 2009 estimated that developing country climate mitigation needs would be between US$480-600 billion a year up to 2030 and US$1.2 trillion a year from 2030-2050. A 2010 World Bank assessment found that developing country adaptation would add up to between US$75-100 billion a year.
Meanwhile, the International Energy Agency (IEA) has said that an additional US$44 trillion worth of investments are required in clean energy by 2050 to avoid the worst effects of climate change.
G-20 push for climate action
Additional impetus around climate finance and governance featured in the final communiqué issued on Sunday by G-20 leaders.
In a paragraph dedicated to climate change, the document reaffirmed support for mobilising finance for adaptation and mitigation, including through mechanisms such as the Green Climate Fund. Leaders also reiterated their commitment to securing a global climate deal next year and encouraged parties capable of doing so to submit their intended nationally determined contributions (INDCs) by the first quarter of 2015.
The Australian G-20 presidency allegedly resisted the inclusion of the INDC language because this would ramp up pressure for the group’s economies to reveal their post-2020 emissions-reduction targets.
Some major G-20 economies have, however, already come forward with these.
Just ahead of the weekend meet, China and the US jointly unveiled their medium-term climate targets, in what was hailed as a landmark move given their long-running disagreements over emissions-cutting responsibility. These new targets include a 26-28 percent emissions reduction below 2005 levels by 2025 for the US, a 20 percent scale-up of non-fossil fuels in its energy mix by 2030 for China, together with a bid to reach peak emissions around this time if not before. (See BioRes, 13 November 2014)
Last month, the 28-nation EU bloc reached political agreement on its new climate and energy goals including a 40 percent greenhouse gas emissions reduction from 1990 levels by 2030. (See BioRes, 27 October 2014)
A formal pledging summit for the GCF is underway in Berlin, Germany this week, where further contributions could be announced.
After promises are made, however, a key step will be delivering the cash. The GCF’s coffers currently hold US$13 million and some countries such as the US may have difficulty pushing the climate aid through domestic legislatures.
ICTSD reporting; “Obama, in latest climate move, pledges $3 billion for global fund,” REUTERS, 14 November 2014; “U.S. to give $3 Billion to Climate Fund to Help Poor Nations, and Spur Rich Ones,” THE NEW YORK TIMES, 14 November 2014; “Tony Abbott rules out more contributions from Australia to Green Climate Fund,” The GUARDIAN, 16 November 2014; “G20 climate change statement’s evolution reveals backroom battle,” THE GUARDIAN, 16 November 2014; “Are countries contributing their fair share to the UN’s climate adaptation fund?” THE CARBON BRIEF, 14 November 2014.