11/12/2018 | Green Climate Fund in climate negociations at the COP24 - By Anya Coutinho
The Green Climate Fund (GCF) is a financial mechanism set up by the UNFCCC to support climate action in developing countries, especially in Least Developed Countries (LDCs), Small Island Developing States (SIDS) and African countries. It was established at COP16 in 2010. The main role of this body is to provide framework and general direction for investments in climate change projects of the countries which joined the UNFCCC. The GCF is an independent institution piloted by a Committee where developed and developing countries are equally represented.
The contributions GCF receives from the Parties to the UNFCCC are accepted in the form of donations, concessional loans and capital contributions. In the process of the Initial Resource Mobilization (IRM) in 2014, 43 countries (including 9 developing ones) announced and signed a pledge equal to $10,3 billion. You can find detailed information on the pledges and contributions by amount here. The main goal of the IRM is to have all the pledges converted into contribution agreements within one year from the time at which they are made. It is worth noting that the US might not contribute the $2 billion left from their pledge (out of $3 billion) considering their announcement to retreat from the Paris Agreement. However, developed countries who have made past finance pledges have reconfirmed their commitments.
The important needs of developing countries to finance their adaptation and mitigation actions make the GCF a fundamental part of climate negotiations. The fund must ensure the balance in investment between the measures for mitigation and adaptation to climate change, hence providing 50% of its financial support to the former and 50% to the latter. Although there is no limit for each country or region, it is necessary to respect the geographical balance of allocated money. Until now, the LDCs, the SIDS and other African countries have received 39% of directly allocated money and 29% of the additional money for the multiregional projects and programs, while for instance all the other developing countries received 37% of the money allocated by GCF (ICTSD, 2018).
In order to report its activities to the Parties, the GCF prepares annual reports to summarize its achievements towards “its objective to promote the paradigm shift towards low-emission and climate-resilient development pathways”. This report contains such information as the amount of money allocated to the countries, the number and the type of the projects, specific sectors and which countries received it. The last report was published in June this year and will be used by the GCF to receive further guidance from the COP.
During the UNFCCC COP24 in Katowice, a range of consultations were held between the GCF and the Parties. This process aims at advancing the work of the fund. On one hand, the GCF receives guidance from and, on the other hand, it responds to the questions of the Parties.
These consultations are part of informal processes which play a very important role in the negotiations. These not only allow the delegates to stay informed about all the aspects of the GCF work but are also an opportunity for them to “clarify their own thinking about the issues that are being discussed and through which they seek to influence each other’s thinking”. Delegations may spend a large amount of their time in these meetings and it is where most agreements are reached. The main function of the formal consultations, on the contrary, is to formalize agreements previously reached informally.
During the first week of the COP24, ULB Inside COPs attended the meeting where the Green Climate Fund (GCF) met Conference of the Parties (COP) for the consultation on the GCF report and to receive guidance on climate financial instruments from the Parties. The base document for negotiations was provided to the Parties in order to advance with the process and to come to a conclusion by the end of the week. Thus, after a short introduction, the floor was open to the parties.
Several countries made their remarks. For instance, the EU announced that Germany was going to double its financial pledge (1.5 for replenishments), which is of course very positive. South Africa, on the contrary, expressed several concerns regarding the GCF proposal, calling it a “long shopping list – do this, do this without understanding the challenges that faces the board”. Perhaps, such a comment has a reason. Although the GCF has a balanced governance structure that must ensure that the decisions between developed and developing countries are consensus-based, it would be reasonable to suggest that the developed countries are the ones who dictate the “rules”. Indeed, the developed countries are the ones making the largest contributions to the fund, which will serve the needs of the developing countries.
Furthermore, several countries expressed their concerns in regard to the replenishment process. These included South Africa, Bhutan and China. What is the timeline, the structure and the format of the replenishment process? What are the matters related to governance and participation, and financial components? All this remains to be decided.
It is worth mentioning that, during the consultation, the Russian Federation not only gave a positive feedback on the GCF proposal (regarding climate financial instruments), but also agreed to contribute to the GCF this year. China, on the contrary, expressed several concerns, e.g. that the provided resources are far from what the international community expects, and thus, that there must be a formal increase in financial resources this year. It also emphasized that the Board (which is the decision-making body of the GCF) should consider the eligibility of the countries for the financing, which must reflect the spirit of Paris Agreement.
The negotiations continue. You can find out more information on the GCF here.
The contributions GCF receives from the Parties to the UNFCCC are accepted in the form of donations, concessional loans and capital contributions. In the process of the Initial Resource Mobilization (IRM) in 2014, 43 countries (including 9 developing ones) announced and signed a pledge equal to $10,3 billion. You can find detailed information on the pledges and contributions by amount here. The main goal of the IRM is to have all the pledges converted into contribution agreements within one year from the time at which they are made. It is worth noting that the US might not contribute the $2 billion left from their pledge (out of $3 billion) considering their announcement to retreat from the Paris Agreement. However, developed countries who have made past finance pledges have reconfirmed their commitments.
The important needs of developing countries to finance their adaptation and mitigation actions make the GCF a fundamental part of climate negotiations. The fund must ensure the balance in investment between the measures for mitigation and adaptation to climate change, hence providing 50% of its financial support to the former and 50% to the latter. Although there is no limit for each country or region, it is necessary to respect the geographical balance of allocated money. Until now, the LDCs, the SIDS and other African countries have received 39% of directly allocated money and 29% of the additional money for the multiregional projects and programs, while for instance all the other developing countries received 37% of the money allocated by GCF (ICTSD, 2018).
In order to report its activities to the Parties, the GCF prepares annual reports to summarize its achievements towards “its objective to promote the paradigm shift towards low-emission and climate-resilient development pathways”. This report contains such information as the amount of money allocated to the countries, the number and the type of the projects, specific sectors and which countries received it. The last report was published in June this year and will be used by the GCF to receive further guidance from the COP.
During the UNFCCC COP24 in Katowice, a range of consultations were held between the GCF and the Parties. This process aims at advancing the work of the fund. On one hand, the GCF receives guidance from and, on the other hand, it responds to the questions of the Parties.
These consultations are part of informal processes which play a very important role in the negotiations. These not only allow the delegates to stay informed about all the aspects of the GCF work but are also an opportunity for them to “clarify their own thinking about the issues that are being discussed and through which they seek to influence each other’s thinking”. Delegations may spend a large amount of their time in these meetings and it is where most agreements are reached. The main function of the formal consultations, on the contrary, is to formalize agreements previously reached informally.
During the first week of the COP24, ULB Inside COPs attended the meeting where the Green Climate Fund (GCF) met Conference of the Parties (COP) for the consultation on the GCF report and to receive guidance on climate financial instruments from the Parties. The base document for negotiations was provided to the Parties in order to advance with the process and to come to a conclusion by the end of the week. Thus, after a short introduction, the floor was open to the parties.
Several countries made their remarks. For instance, the EU announced that Germany was going to double its financial pledge (1.5 for replenishments), which is of course very positive. South Africa, on the contrary, expressed several concerns regarding the GCF proposal, calling it a “long shopping list – do this, do this without understanding the challenges that faces the board”. Perhaps, such a comment has a reason. Although the GCF has a balanced governance structure that must ensure that the decisions between developed and developing countries are consensus-based, it would be reasonable to suggest that the developed countries are the ones who dictate the “rules”. Indeed, the developed countries are the ones making the largest contributions to the fund, which will serve the needs of the developing countries.
Furthermore, several countries expressed their concerns in regard to the replenishment process. These included South Africa, Bhutan and China. What is the timeline, the structure and the format of the replenishment process? What are the matters related to governance and participation, and financial components? All this remains to be decided.
It is worth mentioning that, during the consultation, the Russian Federation not only gave a positive feedback on the GCF proposal (regarding climate financial instruments), but also agreed to contribute to the GCF this year. China, on the contrary, expressed several concerns, e.g. that the provided resources are far from what the international community expects, and thus, that there must be a formal increase in financial resources this year. It also emphasized that the Board (which is the decision-making body of the GCF) should consider the eligibility of the countries for the financing, which must reflect the spirit of Paris Agreement.
The negotiations continue. You can find out more information on the GCF here.
