Green Climate Fund Opens for Business
The 24-member board of the UN’s flagship Green Climate Fund (GCF) reached an agreement on Wednesday on eight “essential requirements” needed to kick-start an international climate finance mobilisation, management, and disbursement process.
Meeting over four days in the South Korean city of Songdo, board members took decisions on various operational building blocks such as the GCF’s structure, rules governing its financial risk management and investment frameworks, and the procedures for accrediting bodies that will eventually implement projects in target countries.
“We want this Fund to be ambitious and effective in supporting developing countries [on] their way towards low-emission and climate-resilient development. This is a very crucial meeting to make progress,” said board co-chair Manfred Konukiewitz before the start of this week’s talks.
The move concludes unfinished work from the board’s previous meeting in Bali, Indonesia in February, which did see agreement on the balance of activities between climate adaptation and mitigation, gender mainstreaming, and the establishment of a panel of civil society and bank experts to look at private sector activity across the GCF.
Investing in clean development
Established at an international climate meet in Cancun, Mexico in 2010, the GCF is geared toward helping developed countries meet a 2009 pledge to set aside US$100 billion per year by 2020, using a mixture of public and private finance. The extent of the latter’s involvement has proven to be a divisive topic between the global North and South.
The money would be earmarked to help promote a paradigm shift towards low-emissions development and investment pathways, as well as help poor countries adapt to the impacts of climate change. The body is designed to be an operating arm of the UN Framework Convention on Climate Change (UNFCCC) financial mechanism, accountable to participating parties.
Wednesday’s news comes just a month after UN scientists released their latest report on climate change, stressing that technological measures and changes in behaviour are urgently needed stay below an internationally agreed two degree Celsius global temperature rise compared with pre-industrial levels. (See BioRes, 14 April 2014).
Road to Paris
The GCF has been pitted as a key element in reaching an international climate deal on schedule next year in Paris, particularly in relation to the thorny issue of climate finance. Developing countries have long argued that they will not sign an emissions-cutting agreement without manifest financial support.
Ahead of the Korea board meet, some experts warned that a failure to operationalise the GCF could prove very damaging and threaten the possibility of reaching a draft climate deal in Lima, Peru in December.
“Money cannot rest there forever, and if we don’t come to a conclusion in Songdo next week we definitely will have a problem, but my hope is this is not the scenario we will follow,” said Norbert Gorissen, head of Germany’s International Climate Finance division and GCF board member, speaking with RTCC last week.
Earlier in May, Sweden delayed half of a promised US$45 million contribution to the fund, conditioning full delivery in 2015 on a successful launch.
Messages posted on social network site Twitter indicated that the GCF would finalise an initial leverage of funds by November 2014, suggesting donor meetings could follow in the next few months. In October 2013, the board had agreed that an outline of the fund’s core policies was required before moving forward with a formal replenishment process.
“GCF aims at finalising collective engagement for initial resource mobilisation process before COP20 in Lima,” Gorissen tweeted at the meeting.
Tweets also came through saying that the board’s next session would be held in Barbados, from 15-17 October. A compilation of the exact wording of decisions taken over the four days was not available at the time of writing.
ICTSD reporting; “UN’s Green Climate Fund finalises operating procedures,” RTCC, 21 May 2014; “Trillions at stake as Green Climate Fund board meet in Korea,” RTCC, 16 May 2014; “Sweden delays $45m Green Climate Fund contribution,” RTCC, 1 May 2014.