Least Developed Country Fund: Meeting the Threshold Criteria of “Least Developed Country”

The Parties here in Lima have been discussing the Least Developed Country Fund (LDCF), which provides funding only to the Least Developed Countries (LDCs). Due in part to its specificity, these sessions have not garnered as much publicity as many of the others. Of course the ADP sessions, as they are the prep work for the hoped for agreement to come out of Paris next year, are main attraction here, but LDC specific interests hold a different position than other more narrow topics due to the position of the LDCs themselves. The LDCF as a specific topic within LDC issues, has an even tighter invested audience. However, for many of the LDCs, the LDCF is a contentious and important issue for debate.

In yesterday’s meeting certain parties (not only LDCs) brought up criticisms of the LDCF. These include Bangladesh’s insistence that constraints for funding under the LDCF be removed as they are demonstrations of funding countries mistrust of the LDCs; Bolivia’s comment, on behalf of the G77+China, that adaptation financing in general is in a crisis in this convention; and that the LDCF offers only a very small fraction of the necessities for LDC countries, both in terms of the dearth of money currently available as well as the narrow prescribed use of these funds. But as Bhutan stated, the LDCs need strong financial assistance in climate change adaptation. And Liberia specifically stated that the LDCF has been very useful there.

What exactly is the LDCF? The LDCF is one of the funds established under the Global Environment Facility (GEF) (the other is the GCF). The parties established the LDCF to support Least Developed Countries (LDCs) prepare and implement national adaptation programmes of action (called NAPAs in UN acronym speech).  The LDCF is still being adapted, and the Subsidiary Body for Implementation (SBI) recently published recommendations for the LDCF (the recommendation was largely based on an LDC submission). This recommendation and party submissions are currently under discussion.

human asset index

But what exactly is a “Least Developed Country”? An important question as the first caveat to receiving LDCF funds is that the receiving country must be an LDC. There are 48 LDCs that form a negotiating group for the UNFCCC. Nepal, in its statement on behalf of the LDCs at the Opening Plenary on Monday, described the LDCs as “the 48 poorest and most vulnerable countries which contribute least to the problem, yet suffer the most.” The UN has formed specific criteria for what constitutes an LDC, and the LDC listing applies UN wide, not only for the UNFCCC. For inclusion in the LDC list, a country must meet the following criteria: http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_criteria.shtml (1) per capita gross national income under a certain threshold (in the 2015 review this threshold will be $1,035), (2) meeting the human assets index threshold and 2014-0110-CDP(3) meeting the economic vulnerability index. Additionally, the country must be recommended by the UN Committee for Development (who reviews the LDC list every three years), then endorsed by the Economic and Social Council, and approved by the UN General Assembly. Finally, its population cannot exceed 75 million. This multi-variable criteria has been emended over time and likely will continue to adjust as parties demand. Graduation off the LDC list uses a different assessment to ensure graduation only happens if development can be sustained.

Meeting the requirement of “Least Developed Country” is only the first bare-bones step for LDCF support. After that, the process becomes more complicated, and may still be in flux. For more links on the LDCs under the UNFCCC, see the Least Developed Countries Portal page.