Green Climate Fund

Wealthier, industrialized countries have been the countries responsible for most greenhouse gas emissions.Center for Global Development, 15 Aug. 2015 [https://www.cgdev.org/media/who-caused-climate-change-historically "Developed Countries Are Responsible for 79 Percent of Historical Carbon Emissions"] Rapid Transition Alliance, 13 Apr. 2021 [https://www.rapidtransition.org/wp-content/uploads/2021/04/Cambridge-Sustainability-Commission-on-Scaling-behaviour-change-report.pdf "Cambridge Sustainability Commission Report on Scaling Behaviour Change"] As a consequence, it has been argued that these countries are morally responsible to pay for a lion's share of the cost of climate mitigation worldwide, including costs of the transition of less developed and least developed countries.The Guardian, 23 Nov. 2015 [https://www.theguardian.com/environment/2015/nov/23/paris-climate-talks-developed-countries-must-do-more-than-reduce-emissions "Paris Climate Talks: Developed Countries Must Do More than Reduce Emissions"] Los Angeles Times, 15 Sept. 2019 [https://www.latimes.com/opinion/editorials/la-ed-climate-change-global-warming-part-2-story.html "Editorial: Wealthy Countries Are Responsible for Climate Change, But It’s The Poor Who Will Suffer Most"] A number of civil society groups determined that the United States and the European Union are morally responsible for at least 54% of the cost of mitigating climate change-driven disaster damage in the Global South.CSO Equity Review (2019) [http://civilsocietyreview.org/report2019/ "Can Climate Change Fuelled Loss and Damage Ever be Fair?"] Manila, London, Cape Town, Washington, et al.: CSO Equity Review Coalition. {{doi|10.6084/m9.figshare.10565549}} Others have argued that wealthier countries should help finance the transition of less developed and least developed countries because the former can more realistically afford the substantial investment now urgently needed for the transition.The New Republic, 8 Dec. 2015 [https://newrepublic.com/article/125279/whos-responsible-climate-change "Who’s Most Responsible for Climate Change?"]

The Copenhagen Accord, established during the 2009 United Nations Climate Change Conference (COP-15) in Copenhagen mentioned the "Copenhagen Green Climate Fund". The fund was formally established during the 2010 United Nations Climate Change Conference in Cancun as a fund within the UNFCCC framework.{{cite web|last=UNFCCC|title=Report of the Conference of the Parties on its sixteenth session, held in Cancun from 29 November to 10 December 2010|url=http://unfccc.int/files/na/application/pdf/07a01-1.pdf|access-date=23 November 2011|url-status=dead|archiveurl=https://web.archive.org/web/20111128184032/http://unfccc.int/files/na/application/pdf/07a01-1.pdf|archive-date=28 November 2011|df=dmy-all}} Its governing instrument was adopted at the 2011 United Nations Climate Change Conference (COP 17) in Durban, South Africa.{{cite web|last=UNFCCC|title=Green Climate Fund - report of the Transitional Committee |url=http://unfccc.int/files/meetings/durban_nov_2011/decisions/application/pdf/cop17_gcf.pdf|access-date=23 July 2013}}{{cite web |last1=Fund |first1=Green Climate |date=March 14, 2023 |title=Green Climate Fund names Mafalda Duarte as new Executive Director |url=https://www.greenclimate.fund/news/green-climate-fund-names-mafalda-duarte-new-executive-director |website=news.trust.org}}

During COP-16 in Cancun, the matter of governing the GCF was entrusted to the newly founded Green Climate Fund Board, and the World Bank was chosen as the temporary trustee. To develop a design for the functioning of the GCF, the "Transitional Committee for the Green Climate Fund" was established in Cancun too. The committee met four times throughout the year 2011, and submitted a report to the 17th COP in Durban, South Africa. Based on this report, the COP decided that the "GCF would become an operating entity of the financial mechanism" of the UNFCCC,{{cite journal|last=IISD|title=Summary of the Durban Climate Change Conference: 28 November - 11 December 2011|journal=Earth Negotiations Bulletin|date=13 December 2011|volume=12|issue=534|url=http://www.iisd.ca/download/pdf/enb12534e.pdf|access-date=15 December 2011|archive-date=1 October 2016|archive-url=https://web.archive.org/web/20161001215324/http://www.iisd.ca/download/pdf/enb12534e.pdf|url-status=dead}} and that on COP-18 in 2012, the necessary rules should be adopted to ensure that the GCF "is accountable to and functions under the guidance of the COP". Researchers at the Overseas Development Institute state that without this last minute agreement on a governing instrument for the GCF, the "African COP" would have been considered a failure.Schalatek, L., Stiftung, H., Nakhooda, S. and Bird, N., February 2011, [http://www.odi.org.uk/resources/details.asp?id=6149&title=design-green-climate-fund The design of the Green Climate Fund] {{Webarchive|url=https://swap.stanford.edu/20120307083905/http://www.odi.org.uk/resources/details.asp?id=6149&title=design-green-climate-fund |date=7 March 2012 }}, Overseas Development Institute. Retrieved 7 April 2012

Furthermore, the GCF Board was tasked with developing rules and procedures for the disbursement of funds, ensuring that these should be consistent with the national objectives of the countries where projects and programmes will be taking place. The GCF Board was also charged with establishing an independent secretariat and the permanent trustee of the GCF.

The fund partners with 84 organizations that include commercial and development banks, state agencies and civil society groups, which pilot and execute innovative approaches to climate programs.{{Cite news|url=https://www.reuters.com/article/us-global-climatechange-finance-intervie-idUSKCN1S91LL|title=Green Climate Fund must take risks in warming fight, says new head|last=Rowling|first=Meghan|date=2019-05-03|work=Reuters|access-date=2019-05-04|language=en}}

There are other multilateral climate funds (i.e. governed by multiple national governments) which are important for paying out money in climate finance. As of 2022, there are five multilateral climate funds coordinated by the UNFCCC. These are the Green Climate Fund (GCF), the Adaptation Fund (AF), the Least Developed Countries Fund (LDCF), the Special Climate Change Fund (SCCF) and the Global Environment Facility (GEF). The GCF is the largest of these five funds.{{Cite web |title=Climate Finance {{!}} UNFCCC |url=https://unfccc.int/topics/climate-finance/the-big-picture/climate-finance-in-the-negotiations |access-date=2018-12-03 |website=unfccc.int |language=en}}{{Cite web |last=Global |first=IndraStra |title=Climate Finance: Essential Components, Existing Challenges, and On-going Initiatives |url=https://www.indrastra.com/2022/12/climate-finance-essential-components.html |access-date=2022-12-27 |website=IndraStra Global |language=en |issn=2381-3652}}

File:Paris climate agreement chart.png contributions by country (or region in the case of the European Union, which is the bar at the left)]]

File:Green-climate-gcf-fund-pledges.png Indicator 13.A.1: Green Climate Fund mobilization of $100 billion, 2018|300x300px]]

Countries agreed to mobilise $100 billion a year by 2020 in climate finance, some of which has been mobilised through the GCF. Uncertainty over where this money would come from led to the creation of a High Level Advisory Group on Climate Financing (AGF) by UN Secretary-General Ban Ki-moon in February 2010. There is no formal connection between AGF and GCF, although its report is one source for debates on "resource mobilisation" for the GCF, an item that will be discussed at the GCF October 2013 Board meeting.{{cite web|last=UN|title=UN Secretary-General's High-level Advisory Group on Climate Change Financing (AGF) |url=https://www.un.org/wcm/content/site/climatechange/pages/financeadvisorygroup|access-date=13 December 2011}} Disputes also remain as to whether the funding target will be based on public sources, or whether "leveraged" private finance will be counted towards the total.Institute for Policy Studies (2013), [http://climatemarkets.org/glossary/green-climate-fund.html Green Climate Fund], A Glossary of Climate Finance Terms. Retrieved 23 July 2013

As of February 2020, a total of US$10.3 billion was pledged and US$8.24 billion confirmed, as part of the Initial Resource Mobilization (IRM) period.[https://www.greenclimate.fund/document/status-pledges-and-contributions-initial-resource-mobilization Green Climate Fund], Status of Pledges. Retrieved 22 March 2020 As of Dec 2023, the GCF had a portfolio of 13.5 billion USD (51.9 billion USD including co-financing).  

The lack of pledged funds and potential reliance on the private sector is controversial and has been criticized by developing countries.{{cite news|last=Sethi|first=Nitin|title=A green climate fund but no money at Durban|url=http://timesofindia.indiatimes.com/home/environment/developmental-issues/A-green-climate-fund-but-no-money-at-Durban/articleshow/11009614.cms|access-date=13 December 2011|newspaper=The Times of India |date=6 December 2011}}

U.S. President Obama committed the US to contributing US$3 billion to the fund. In January 2017, in his final three days in office, Obama initiated the transfer of a second $500m installment to the fund, leaving $2 billion owing. Former U.S. President Donald Trump in his announcement of U.S. withdrawal from the Paris Agreement on 1 June 2017, also criticized the Green Climate Fund, calling it a scheme to redistribute wealth from rich to poor countries.{{Cite news|url=https://www.nytimes.com/2017/06/01/world/europe/climate-paris-agreement-trump-china.html|title=As Trump Exits Paris Agreement, Other Nations Are Defiant|last1=Eddy|first1=Somini Sengupta, Melissa|date=1 June 2017|work=The New York Times|access-date=1 June 2017|last2=Buckley|first2=Chris|language=en-US|issn=0362-4331}}

The process of designing the GCF has raised several issues. These include ongoing questions on how funds will be raised,{{cite web |first=Brandon |last=Wu |year=2013 |url=http://www.huffingtonpost.com/brandon-wu/wheres-the-money_b_3499523.html |title=Where's the Money? The Elephant in the Boardroom |publisher=Huffington Post |access-date=24 July 2013}} the role of the private sector,{{cite web |first=Oscar |last=Reyes |year=2013 |url=http://fpif.org/songdo-fallout-is-green-finance-a-red-herring/ |title=Songdo Fallout: is green finance a red herring? |publisher=Foreign Policy in Focus |access-date=24 July 2013}} the level of "country ownership" of resources,{{cite web |first=Annaka Peterson |last=Carvalho |url=http://politicsofpoverty.oxfamamerica.org/2013/07/19/3-ways-country-ownership-is-being-put-to-test-with-climate-change-funding/ |title=3 ways country ownership is being put to the test with climate change funding |publisher=Oxfam America |access-date=24 July 2013}} and the transparency of the Board itself.{{cite web |first=Emilio |last=Godoy |year=2013 |url=http://www.ipsnews.net/2013/07/civil-society-pushes-for-more-active-participation-in-green-climate-fund/ |title=Civil Society Pushes for More Active Participation in Green Climate Fund |publisher=Inter Press Service |access-date=24 July 2013}} In addition, questions have been raised about the need for yet another new international climate institution which may further fragment public dollars that are put toward mitigation and adaptation annually.{{cite news |first=Assaad W. |last=Razzouk |author-link=Assaad W. Razzouk |date=8 November 2013|url=https://www.independent.co.uk/voices/comment/why-we-should-kill-the-green-climate-fund-8929564.html |title=Why We Should Kill The Green Climate Fund |newspaper=The Independent |access-date=8 December 2013}}

The Fund's initial investments have met with mixed responses. But in at least one case it also drew praise for involving local communities in the formulation of an adaptation project, and for incorporating consumer protection into a plan for off-grid solar energy.{{cite web |first=Oscar |last=Reyes |year=2016 |url=http://fpif.org/little-known-fund-heart-paris-climate-agreement// |title=The Little-Known Fund at the Heart of the Paris Climate Agreement |publisher=Foreign Policy in Focus |access-date=23 September 2016}}

One of the most controversial aspects of the GCF concerns the creation of the Fund's Private Sector Facility (PSF). Many of the developed countries represented on the GCF board advocate a PSF that appeals to capital markets, in particular the pension funds and other institutional investors that control trillions of dollars that pass through Wall Street and other financial centers. They hope that the Fund will ultimately use a broad range of financial instruments.Oscar Reyes (2013), [http://fpif.org/songdo-fallout-is-green-finance-a-red-herring/ Songdo Fallout: is green finance a red herring?], Foreign Policy in Focus. Retrieved 23 July 2013

However, several developing countries and non-governmental organizations have suggested that the PSF should focus on "pro-poor climate finance" that addresses the difficulties faced by micro-, small-, and medium-sized enterprises in developing countries. This emphasis on encouraging the domestic private sector is also written into the GCF's Governing Instrument, its founding document.Friends of the Earth USA (2013), [http://www.foe.org/news/archives/2013-04-pro-poor-climate-finance-is-there-a-role-for-private Pro-poor Climate Finance: Is There a Role for Private Finance in the Green Climate Fund?], Friends of the Earth USA. Retrieved 24 July 2013

The Cancun agreements clearly specify that the funds provided to the developing countries as climate finance, including through the GCF, should be "new" and "additional" to existing development aid. The condition of funds having to be new means that pledges should come on top of those made in previous years. As far as additionality is concerned, there is no strict definition of this term, which has already led to serious problems in evaluating the additionality of emission reductions through CDM projects, leading to counter-productivity, and even fraud.{{cite journal|last=Wara|first=M. W.|author2=Victor, D. G.|title=A Realistic Policy on International Carbon Offsets|journal=PESD Working Paper|date=April 2008|issue=74|url=http://iis-db.stanford.edu/pubs/22157/WP74_final_final.pdf|access-date=7 November 2011|url-status=dead|archive-url=https://web.archive.org/web/20111018223320/http://iis-db.stanford.edu/pubs/22157/WP74_final_final.pdf|archive-date=18 October 2011|df=dmy-all}}{{cite web|last=International Rivers|title=Failed Mechanism: Hundreds of Hydros Expose Serious Flaws in the CDM|url=http://www.internationalrivers.org/node/2326|publisher=Internationalrivers.org|access-date=7 November 2011}} While climate finance usually only counts pledges from developed countries, the US$10.3 billion pledged to the GCF also includes some (relatively small) contributions from developing countries.

At its board meeting in South Korea held in March 2015, the GCF refused an explicit ban on fossil fuel projects, effectively allowing for the funding of coal plants. Japan, China, and Saudi Arabia opposed the ban.{{cite news |title=UN green climate fund can be spent on coal-fired power|url=https://www.theguardian.com/environment/2015/mar/29/un-green-climate-fund-can-be-spent-on-coal-fired-power-generation |work=The Guardian |location=London |access-date=8 April 2015}}{{cite web|website=CleanTechnica|title=Green Climate Fund Can Be Spent To Subsidise Dirty Coal|date=7 April 2015|url=http://cleantechnica.com/2015/04/07/green-climate-fund-can-spent-subsidise-dirty-coal/|publisher=Cleantechnica|access-date=8 April 2015}}

The Fund's former director Héla Cheikhrouhou has complained that the Fund is backing too many "business-as-usual types of investment proposals", a view echoed by a number of civil society organizations.{{cite news |last=Clark |first=Pilita |date=6 September 2016 |title=Green fund investing in the wrong projects, says former chief |newspaper=Financial times |url=http://on.ft.com/2cqOix6 |access-date=23 September 2016}}

The Fund is also pledged to offer "balanced" support to adaptation and mitigation, although there is some concern amongst developing countries that inadequate adaptation financing will be offered, in particular if the fund is reliant on "leveraging" private sector finance.{{cite journal |last=Abbott, K.W., Gartner, D. |year=2011 |title=The Green Climate Fund and the Future of Environmental Governance |journal=Earth System Governance Working Paper No. 16 |ssrn=1931066}} While GCF governing instrument stresses on the need for equal funding towards adaptation and mitigation, there is no universal measure of adaptation, which makes access to GCF funding extremely cumbersome.

{{reflist}}

• {{Official website|http://greenclimate.fund}}
• [https://www.greenclimate.fund/how-we-work/tools/entity-directory List of accredited entities]

{{Climate change}}

Category:Climate change finance

Category:Funding bodies

Category:United Nations Framework Convention on Climate Change

Category:Organizations established in 2010

Category:2010 establishments in South Korea

Category:Organizations based in Incheon

Category:Funds