A New Architecture for Climate Finance Must Encourage Private Sector Investment

Give a man a fish, and he eats for a day. Teach a man to fish, and he eats for the rest of his life.” In relation to climate financing, the Green Climate Fund (GCF) and Developed Country Parties, do both, and neither particularly well.  The recent IPCC 1.5 report has taken away all room for delay: the GCF cannot waste its valuable funding on unaccountable, inefficient disbursements. We need a financial architecture that will let us move much faster than we are.

This COP has highlighted Developing Country Parties’ concerns that they won’t have the capital to meet the requirements of the Paris Agreement. More specifically, that they won’t have the fOptimized-Plants and coinsunds to help pay for losses and damage expected from climate change and that they cannot afford to build the necessary infrastructure, such as renewable energy sources and other low-carbon technologies, that the IPCC 1.5 report warns are necessary.

The GCF relies on Developed Country Parties’ pledges to provide that funding. However, these Parties are hesitant to invest and bear the risk for the costs of climate change. Additionally, they are hesitant to grant funding to countries that are technically “developing,” yet have emerged as economic powerhouses.

This hesitation is exacerbated by irresponsible use of funds by the GCF. Experts argue that the use of climate grants, which make up 47% of the GCF’s activities to date, rather than direct investment, are a misallocation of public funds. They can actually harm markets by pushing out small-scale private actors, often going to those who could afford it anyway. Instead, GCF capital should be blended with government money in order to attract private investors and encourage market growth.Flood_Affected_Areas_of_Amreli_District_Gujarat_India_on_24_June_2015_2-768x512

Private investors are hesitant to invest in the face of unfamiliar risk. This includes vulnerabilities to extreme weather, droughts, and rising sea levels for coastal economies, but also inaction by governments that will exacerbate these effects. However, private investors are often moving into these markets anyway, which are slowly becoming more viable as investment options. To encourage this, public funds from the GCF and governments should be used to leverage investment from private actors. Instead of being given freely, by themselves, in the form of grant disbursements, proponents argue that they should only be committed in cases where they can encourage private investment at 10x or higher.

Many Developing Countries, LDCs, and SIDS require foreign aid to kick-start these markets. Private investment must be encouraged as part of that funding. There is simply not enough public funding to tackle the problem alone.


Adaptation and GCF at the Koronivia Workshop

Today was our delegation’s first day at COP24 in Katowice, Poland. The experience was a whirlwind. We all were figuring out where to go for meetings, identifying who was speaking for each Party, and how to best soak in all the activities of COP. We attended sessions in our area of expertise, and sometimes those sessions overlapped areas of expertise. The Koronivia Workshop was such a program with an overlap between adaptation and agriculture.

The Koronivia workshop was split into sessions: morning and afternoon. Both sessions included adaption and financing discussions. Presenters offered a PowerPoint about projects in their respective countries. The agenda can be found here.

At the end of the afternoon session, countries and NGOs were able to contribute to an open discussion. The Co-Facilitators opened the floor to discuss three questions about the constituted bodies (CBs), useful modalities to implement outcomes from the workshops, and future topics that may arise from the outcomes. Suggestions from the countries were helpful and constructive, but there was no decision made on how to proceed. Check the blog tomorrow for more specific answers given to the above questions from our ag expert, Liz.

One concerning question was raised about the role of the GCF. A GCF representative was present; however, GCF did not give a formal presentation because the workshop was focused on Parties and CBs. The GCF is not a CB, so its role in Koronivia is not mandatory. But the GCF representative stated that many projects currently funded by the GCF are agriculture focused and expressed that the GCF will continue to fund similar programs. GCF addressed concerns about their funding process. GCF guided all Parties to provide more information about their projects to develop tailor-made funding efforts. GCF can, and will, support climate resilient agriculture. Each country needs to request to funding in order for funds to be dispersed to their project.

The workshop concluded with the announcement that there will be an informal consultation on Wednesday, Dec. 5, 2018, at noon to discuss some issues that were not addressed during this workshop. For information on the first session, and an overview of the Koronivia Joint Work on Agriculture, please see this blog post.


Green Climate Fund Approves $1B in New Projects

GCF logoOn October 21, 2018, the Green Climate Fund (GCF) Board concluded its 21st meeting by approving 19 new projects, totaling $1.038 billion. This board meeting comes right after the IPCC released the Special Report on Global Warming of 1.5°C (SR1.5) (which we posted on here and here) and a little over a month before COP24. As UNFCCC Executive Secretary Patricia Espinosa told GCF Board Members at the start of their meeting, “Never has there been more need for multilateral cooperation. And never has finance played a more central role to the overall climate regime itself.”

GCF was set up by UNFCCC in 2010, as part of the Convention’s financial mechanism. When the GCF began to gather resources in 2014, developed countries, and some developing, pledged $10.3 billion. Initial mobilization lasts until 2018, while the Fund remains open for further contributions during this time from both public and private sources.

The GCF is designed to focus on climate change adaptation and mitigation, in part as a reaction to the broader mandate of the Global Environmental Facility (GEF), the original operating entity of the UNFCCC’s financial mechanism. “The Fund pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States.” Another key point GCF makes is that “[o]ur innovation is to use public investment to stimulate private finance, unlocking the power of climate-friendly investment for low emission, climate resilient development. To achieve maximum impact, GCF seeks to catalyse funds, multiplying the effect of its initial financing by opening markets to new investments. The Fund’s investments can be in the form of grants, loans, equity or guarantees.”

Green Climate FundWhen addressing the importance of this most recent GCF Board meeting, Executive Secretary Espinosa underscored that its outcome will impact the outcome of COP24: “Success here means sending a clear and unmistakable message of trust to developing countries that they can have confidence in the process going forward.” Espinosa’s remarks were well taken as the GCF approved the 19 proposed projects. See the full list of approved projects and monetary breakdown here.

Her comments came after the preceding GCF Board meeting failed to deliver its mandate. This contentious July 2018 meeting resulted in the resignation of GCF Executive Director, Howard Bamseyand, and no new project approvals. Tensions ran high at this meeting for several reasons. The first two had a direct impact on the Fund’s bottom line: the United States decided in 2017 to halt $2 billion of its Obama administration $3 billion pledge and inflation rates reduced the present value of commitments made in 2014.  In addition, policy gaps for prioritizing the numerous applications whose requests exceed the GCF’s capitalization hampered Board Members’ ability to make the tough selection decisions. The GCF currently has $10 billion pledged out of the $100 billion promised for 2020.

The GCF has been plagued with issues and controversy for the past year. In February 2018, GCF had a green-climate-fund_WEBboard meeting that approved $1 billion in projects. Although the willingness of GCF to approve more projects is hopeful, civil society organizations and parties saw it as problematic, given that the GCF has difficulty dispersing money for projects already approved. As of December 2017, the fund has only released roughly $150 million, or less than 6% of the nearly $3 billion it had committed up to that point. The GCF reported in the February 2018 meeting that this funding is going toward the 18 projects that are under implementation. The Board had approved of 53 projects by the February meeting. So what is taking so long for the Board to disperse funding? Who is receiving this funding? And how is the GCF now reporting that there “39 projects under implementation, worth $1.6 billion in GCF resources that are being deployed as climate finance in support of developing countries’ climate ambitions under the Paris Agreement?” The jump from 18 to 39 projects under implementation in eight months seems either overambitious or over-reported. The biggest question here is how these 39 projects are receiving their funding after the turmoil of the GCF in the past eight months. To take from Espinosa’s remarks again, “The outcome of [the October Board meeting] of the GCF will impact those negotiations in Katowice.”

Looking toward COP24: The GCF submitted a report to the UNFCCC on Sept. 17, 2018, for consideration at the upcoming COP24. Table 14 included in its Annex VII lists all projects approved by the Board to receive funding from the GCF as of July 31, 2018. In this table, the GCF does not report what has been dispersed, only the GCF funding and total project value.


China’s Effort to Limit GHGs

china-five-year-plan-infographicChina produces more carbon dioxide than any other country in the world: 10.357 million metric tons per year. To limit their impact on climate change, China includes environmental protection in their Five Year Plan (FYP). The FYP is the country’s blueprint that outlines the policy framework, priorities, economic, and social development goals for the 2016-2020 period.

In 2016, China released the 13th FYP which includes lofty goals to reduce carbon dioxide emissions and increase green manufacturing. Innovation is the crux of this FYP. Innovation builds on improving manufacturing and emphasizing a cleaner, green economy. A State Council executive meeting in 2015 discussed implementing an Internet Plus Circulation program. The program expands broadband connection to more rural areas so there is more efficiency in transporting items, like new agricultural products and equipment. The program will also allow rural populations to access health care. Air pollution is a key target for the FYP. Chapter 38, Section 4, ensures that the concentration of fine particulate matter is reduced by at least 25%. The current status of smog and air pollution affects public health. China is increasing regulations for coal-fired plants while requiring low-emission technologies and eliminating outdated industrial equipment and processes.

The carbon dioxide emissions reduction targets in the FYP contribute to China’s Nationally Determined Contribution (NDC) 2030 target. The 13th FYP even put a first nation-wide total energy cap on all energy sources: it is set at less than the equivalent of five billion tons of coal over the next five years. These goals are reflected in the INDC filed on June 30, 2015. Article 4 of the Paris Agreement, provides that “[e]ach Party shall prepare…nationally determined contributions…with the aim of achieving the objectives…” of reaching a global peak of GHG emissions as soon as possible. During COP24 in December, China may include details about innovation and policy from the 13th FYP into the NDC because it is on track to meet the 2020.

China is fully embracing their 2020 goals by implementing green community projects. On September 28, 2018, Green Climate Fund announced that the board will consider projects, including China’s Green Cities program,targeting Central Asia and Eastern Europe. This project is among 20 other proposals totaling $1.1 billion to be heard during the next board meeting this month. It will be interesting to see how these project proposals will factor into each countries’ NDC during COP24.


G77 + China: Perspectivas de la COP23

230202_600Compuesto por 130 países, el G77 + China representa el grupo negociador más grande en la Convención Marco sobre el Cambio Climático (CMCC). El día de hoy durante su conferencia de prensa, la señora María Fernanda Espinoza en nombre del grupo, expresó los retos y debilidades de la COP23, así como los resultados positivos de las negociaciones sostenidas durante las últimas dos semanas en Bonn, Alemania.

En cuanto a los resultados positivos, el grupo resaltó la creación de la plataforma para las comunidades locales y los pueblos indígenas , la cual busca reforzar los conocimientos, las tecnologías, las prácticas y los esfuerzos de las comunidades locales y los pueblos indígenas para hacer frente al cambio climático.

Igualmente, destacó el trabajo que se ha realizado en el área de las pérdidas y daños con ocasión a los efectos de cambio climático en la que se están cuantificando los mismos para así definir los recursos necesarios para mitigación y adaptación y sobretodo recuperación después de un evento de cambio climático como los vividos en los últimos meses (Huracanes Irma y María).

Por otro lado, en lo que tiene que ver con las debilidades y los retos a los que todavía se enfrenta el grupo, Espinoza señaló que aún no está claro cómo las Partes van a cumplir con sus compromisos de adaptación y mitigación, en especial por los problemas de acceso a financiamiento y recursos, transferencias de tecnologías y el fortalecimiento de capacidades de los países.

En cuanto al financiamiento, resaltó que ocho años después de su creación el Fondo Verde Climático no ha recaudado el monto determinado para cada año y el acceso a este se hace cada vez más difícil, lo que pone en desventaja a los países menos desarrollados.

¿Qué está haciendo el G77 y China para mejorar el acceso al financiamiento y que las Partes puedan cumplir con sus metas de mitigación y adaptación? change_in_hand_2x3

El grupo presentó una propuesta ante la Conferencia de las Partes-COP23, en la que además de solicitar que el procedimiento para acceder a los recursos económicos sea más sencillo, se está solicitando un acceso real y consistente a los recursos que se necesitan por parte de los países.

Adicionalmente, se solicitó que estos recursos sean nuevos, predecibles y sostenibles en el tiempo para que se puedan financiar las actividades por medio de las cuales se busca cumplir con los compromisos adquiridos bajo el Acuerdo de París.

Así las cosas, y aunque se cumplieron algunos de los objetivos que se tenían para la COP23, los medios de implementación y en especial el acceso al financiamiento y los recursos sigue siendo “la pata débil” de las negociaciones.

Se espera que con la petición efectuada por el G77 y China, la COP continúe negociando y se llegue a un consenso para mejor el financiamiento que requieren los países menos desarrollados para cumplir con las metas propuestas bajo el Acuerdo de París.


Money doesn’t grow on trees

moneytreeWalking into the COP, observer and party delegations alike are given a bar of chocolate. And while the candy bar does not give its holder a Golden Ticket, it does draw chocolate-lovers’ attention to an important message for the Trillion Tree Campaign. That campaign is spearheaded by Plant-for-the-Planet, an NGO launched in 2007 by a nine-year-old boy to plant a trillion trees on the world’s degraded forest land. Such efforts are priceless when it comes to climate change: trees are the only “machines” on earth that can store carbon. Plus, they provide invaluable resources (like cacao for the COP’s beloved chocolate).

The Paris Agreement highlights the importance of forests, as well. Article 5 of the Agreement calls for parties to take action in reducing emissions from deforestation and forest degradation, and to conserve and enhance sinks and reservoirs of greenhouse gases. Programs like REDD+ aim to reduce emissions from deforestation and forest degradation. Working under the UNFCCC, REDD+ provides technical and financial support for developing countries to reduce emissions and enhance the removal of greenhouse gases.

The biggest challenge for REDD+ is now moving to implementation. At the COP, parties are discussing–and will soon decide–what implementation should look like in terms of governance: should the UNFCCC create a new body or structure to govern REDD+ implementation, or do the existing structures suffice? Should parties continue to meet in voluntary meetings that support implementation of activities that contribute to mitigation actions in the forest sector, or have these meetings already served their purpose?

One argument put forth by many developed countries–who are against future voluntary meetings–is the Green Climate Fund’s (GCF) recent decision to allocate $500 million to results-based financing for REDD+ activities. This decision, as the argument goes, shows that the financial landscape for REDD+ implementation is now in place, and that parties and entities have taken the Paris Agreement (particularly Article 5) quite seriously.

Under the program, the GCF pays at most $5 per ton of CO2eq of emissions reduced. The pilot program applies to projects showing results between 2013-2018, and thus is still open for developing countries.

The decision is a result of multilateral negotiations, which were not–and are never–perfect or easy. But the decision took into account a large spectrum of national interests. Many countries do not want to compromise this decision by reaching alternative conclusions in future voluntary meetings for REDD+.

With a scorecard indicating the highest standard for REDD+ activities, developing countries now have a gold standard for the program that sets the bar high for financing. For the sake of REDD+ and the Paris Agreement, it is important that results-based financing has become a part of GCF’s portfolio: this provides GCF with the opportunity to test the waters of this approach while also inspiring a race to the top in implementing REDD+.


Small Island Developing States Fishing for Adaptation Solutions

Coral aquaculture in FijiFor Small Island Developing States (SIDS) like Fiji, climate change adaptation requires immediate action. As my colleague Val analyzed previously, fish stocks are depleted and international tensions are rising as each nation attempts to protect the fishing economy it still maintains. When the Ocean Conference met in June of 2017, participants recognized the crucial role oceans play as a climate regulator and the impact the changing environment would have on food and nutrition. This will be particularly impactful on SIDS as fisheries fade; those nations now cast for ideas in alternative food options. Some SIDS have hooked on aquaculture as an adaptive strategy.

The average consumption of seafood in the world is roughly 20 kg/capita/year with 70% of SIDS exceeding that global average. That, with the rising ocean temperatures, the migration of fish out of their previously habitable areas and the unsustainable fishing practices, creates a massive deficit in global fish markets when measured against demand. This mismatch creates the perfect atmosphere for aquaculture development.

Biota-Palau-Hatchery-1In 2015, the total aquaculture production of SIDS was 71,893 tons, with Cuba manning the helm with around 30,000 tons. Overall, most nations produced less than 100 tons of aquaculture and the diversity of SIDS creates a particular problem with the implementation of any “one-size-fits-all” program. Branching off of the Secretariat of the Pacific Community (SPC)’s FAO program, Palau, Nauru, and the Republic of the Marshall Islands (RMI) formed the Micronesian Association for Sustainable Aquaculture (MASA) in November of 2015. MASA’s goal is to facilitate region specific cooperative programs and assistance in order to meet demand and reduce market reliance on fish.

Implementation of these adaptation techniques is an issue that runs through COP 23 and is recognized also by the Oceans Conference. The Oceans Conference emphasized the need for sustainable development goals (SDG14), and a Blue Economy to support and finance ocean initiatives. It specifically mentioned the strengthening of sustainable economies with reference to aquaculture within their action plan. Based on that action plan, the Seychelles raised roughly $40 million towards their SDG14 and their INDC places a heavy emphasis on sustainable fisheries and adaptation to ocean climate change. This funding will have a substantial impact on their ocean economy. But funding is challenging to acquire. With the Green Climate Fund (GCF) increasing fund accessibility for least developed countries (LDC) for adaptation plans, this could present an opportunity for many nations who have already implemented or are in the process of implementing aquaculture plans to acquire necessary funding. While the GCF does not specifically address aquaculture as an adaptation strategy, several nations, including SIDS like Vanuatu and Tuvalu, have already included in their GCF proposals aquaculture adaptation strategies.

With the current momentum aquaculture dSustainable-Aquaculture.adapt.1190.1evelopment has gained in SIDS, COP 23 has the unique advantage for aquaculture and sustainable fishing measures with Fiji at its helm. While the focus of the Paris Agreement was the mitigation of effects to reduce the overall rise in temperature, adaptation still remains a strong focus for the countries that are feeling the most significant of those effects. Aquaculture has worked its way into the economies of many nations and will hopefully further alleviate the burden that climate change is having on SIDS.


Trump’s proposed budget would cut US international climate change work significantly

trump budgetAccording to Inside Climate News, the Trump Administration’s recently unveiled budget proposal would cut $10.1 billion from the United States’ current international climate work, which represents a 28% reduction from the status quo.

It would eliminate the Global Climate Change Initiative (GCCI), which funds all climate-related bilateral efforts, like collaborations with China and India, and contributes to the United Nations Framework Convention on Climate Change (UNFCCC) and the Intergovernmental Panel on Climate Change (IPCC). The GCCI also assists developing countries manage their emissions and increase their renewable energy capacity.

The proposed budget also eliminates the U.S. contribution to the Green Climate Fund (GCF), which helps developing countries prepare for climate impacts. The U.S. under the Obama Administration has pledged $3 billion to the GCF, and thus far,$1 billion has been paid.

In a recent press conference on the budget, Michael Mulvaney, Director of the Office of Management and Budget, represented the administration’s views on climate change: “We’re not spending money on that anymore. We consider that to be a waste of your money.”


A Numbers “Crunch” – Trump & The UNFCCC

Number-crunchingLike most every other institution around the globe, for a while now, the UNFCCC has been called on to do more with less. This is clearly reflected in the Executive Secretary’s recent budget presentations that report contributions to UNFCCC trust funds have declined significantly for at least the last 5 years. In fact, 2016 contributions are just 43% of the 2012 level. And all the while, the COP has added new tasks, including, most recently, the raft of work associated with the 2015 Paris Agreement.reduce-boost-graph SmallbizTrends

At a COP22 informal session on November 11, Espinosa shared that the Secretariat, with its mandated zero-growth budget, will be unable to fully deliver on its current mandates. So, all countries are being called on to meet their full commitments and to increase their voluntary contributions.

It just so happens that the U.S. is a big piece of this budget picture, contributing (as of October 21) more than 20% of the total $30.3 mill* in 2016 receipts for the 3 non-Kyoto Protocol related funds. These include the Trust Fund for the Core Budget (with country-specific contribution levels based on UN-determined proportions) and two voluntary funds: Trust Fund for Supplementary Activities and Trust Fund for Participation in the UNFCCC Process (the latter to help developing country Parties attend COPs and other meetings).

Screen Shot 2016-11-17 at 11.50.06 PMAnd, of course, there is the ongoing U.S. climate funding via appropriations from Congress, development finance, and export credit, which totaled $2.6 billion in 2015. That was before $500 million was transmitted to the Green Climate Fund earlier this year in partial fulfillment of the $3 billion U.S. promise (that constitutes 30% of that fund’s total pledges). All of it adds up to a very big number in the climate finance world.

Then, on November 8, from stage right: enter President-elect Trump.

While the potential impact on the climate regime is about more than money (check out our Monday story), the finance implications are indeed great. Considering Mr. Trump’s campaign pledges, the Republican Party’s platform position, and the Transition Team’s recent statements, when it comes to climate funding, those calculators only subtract.

Many negotiators and high-level ministers attending COP22 from around the world have been cautioning against hasty speculation on U.S. policy post-January 20, 2017. Behind the scenes, however, and certainly within the Secretariat, the number crunching has doubtless turned to nail biting.

 

* Based on 11/17/16 EUR-USD exchange rate

(Image credits: Calculator = seocopywriting.com; Diverging costs/revenue= smallbiztrends.com; Scissors & currency= neatoday.org)


LDCs – Concern, yet hope, entering Week 2 of COP22

Courtesy www.afd/frAt the end of the first week, many were expressing concern that Marrakech’s purported COP of Action wasn’t measuring up for the world’s most vulnerable countries. Yesterday morning, Least Developed Countries (LDC) Chair, Tosi Mpanu Mpanu, identified troubles on key issues of ambition, adaptation / loss & damage, and climate finance. In particular, he noted that:Screen Shot 2016-11-15 at 3.37.17 PM

  • The Paris Agreement rulebook development is being stymied and strong action on pre2020 commitments is not materializing.
  • Adaptation needs of the most vulnerable, exploding as a result of inadequate mitigation by developed countries for decades, are not being addressed in a balanced manner, with even the adaptation registry being complicated. And, foot dragging on other seemingly simple decisions, such as the review of the Warsaw International Mechanism for Loss and Damage (WIM), is eroding trust and confidence that the global community will concretely respond to the very real and devastating losses and damages increasingly suffered by poor countries on the front lines of climate change impacts.
  • Developed countries have been blocking the Paris-mandated inclusion of the Adaptation Fund in the Paris Agreement rulebook, and the developed country recent “roadmap” to reach the promised $100 billion/year by 2020 lacks credibility – – unfortunate circumstances in the face of developing countries’ low-carbon climate resilient development needs now estimated to collectively exceed $4 trillion.

Work did continue yesterday, while heads of state and ministers arrived for the high-level segment. By the end of the day, among some positive developments were two improved draft decisions on the WIM (here and here). (More on these to come.) Additionally, the Green Climate Fund expedited grants for Liberia’s and Nepal’s National Adaptation Plans. Climate finance remains a hot topic on this week’s COP22 agenda, in particular, the upcoming High-Level Ministerial Dialogue on Climate Finance; so, Screen Shot 2016-11-15 at 3.09.30 PMhope remains for new and encouraging news on that front. (Check back with us on this, too!)

 

Photo credits: Action Time courtesy www.afd/fr; Informal negotiations courtesy iisd enb


The GCF – Can We Count On It?

gcf.logoIn 2009, as we reported earlier, developed country Parties to the UNFCCC committed to jointly mobilize $100 billion/year by 2020 to help developing countries address their climate change needs. The Green Climate Fund (GCF) – the designated heavy lifter for this goal – was created by COP16 in 2010. Its purpose is to fund developing country efforts to mitigate and adapt to climate change through “low-emission and climate-resilient development.” (See our coverage of the private sector role in the GCF here, and co-financing efforts toward the $100 billion goal here.)

The GCF, now with pledges of just $10.3 billion, became fully operational in 2015. However, as of the start of 2016, only $1.6 billion was reported actually in hand, and none of the $168 million the GCF Board approved for the first 8 projects at its November meeting had been distributed. (We Im-startiving-pig-pay-green-climate-fund-nowreported on the U.S.’s $3 billion pledge here, the first $500 million of which has now been deposited into the Fund.)

The Fund’s goal for 2016 is to distribute $2.5 billion. Its press release also reports a package of current proposals worth $1.5 billion, with 22 projects totaling $5+ billion in the proposal pipeline. (A conflicting update from the Asian People’s Movement on Debt and Development (APMDD) reports $6.2 billion in 124 proposals and concepts in the 2016 pipeline, including 22 that are approval ready.) In either case, that 2016 goal is a high bar.

The GCF Board made some foundational progress at its 12th meeting in early March in Songdo, Korea, including adopting its first Strategic Plan (SP) and a 2016-2018 action plan. (The final SP had not been released as of this posting, but the draft can be found here.) It also accredited 13 new entities (some with pending status), which will bring the total accredited to 33. Additionally, the Board authorized its first Project Preparation Facility grant ($1.5 million to Rwanda). This new and evolving facility is designed to support developing country accredited entities in creating highly fundable projects.green-climate-fund-photo9

The Green Climate Fund has its critics. Hallway talk at COP20 in Lima buzzed about the potentially reckless pace UNFCCC Executive Secretary Christiana Figueres had set for the Fund’s scaling up. Governance questions arose soon after. Now, Small Island Developing States and others are facing onerous and highly bureaucratic accreditation hurdles for accessing it. Leading up to the March meeting, civil society voiced strong objections to the limited meeting access, and to the potential accreditation of international banking giants HSBC and Crédit Agricole.

Unfortunately, the Board’s emerging accreditation strategy, intended to address concerns, wasn’t ready for prime time by the March meeting. In related action, the Board awarded pending accreditation to HSBC and Crédit Agricole – both with substantive conditions to be met before final approval. One of these for HSBC, according to APMDD, is getting a positive report from the U.S. federal monitor’s review of the corporation’s money laundering reforms. HSBC_London_800(That report’s release is currently delayed until a federal appeals court ruling). Interested readers can find the accreditation assessments in appendices of the report of the Board’s decisions.

On a definite positive note, after considerable discussion, the Board ultimately agreed to live webcasting of its meetings in an 18-month experiment, beginning in June

As the GCF story unfolds, let’s hope for lots of transparency and lots of pledges turning to lots of cash. The developing world is counting on it.gcf


US progress on climate finance

ObamaApres COP implementation is vital to make the Paris Agreement worth the many years of hard negotiation that led to it.

So it’s notable that, just as the COP21 dust was settling in Paris, Congress quietly approved a first installment on the U.S.’s Green Climate Fund (GCF) pledge. The FY16 omnibus appropriations bill permits the Obama Administration to move $500 million from other discretionary budget streams and direct it to the GCF.  This half billion dollars is seen as a first installment on the $3 billion that the US pledged last summer. The Hill set out a short list of other political signs that US voters are sending the right signal about the importance of acting on climate change. The Guardian sees this positive funding vote as step 1 of President Obama’s full court press in defining his climate change legacy.

 


“Hit the ground running.”

downloadWith this statement the Executive Director of the Green Climate Fund (GCF), Ms. Hela Cheikhrouhou, reported on the current status of the fund. The interactive session held on Thursday at COP 20 provided a brief overview of the latest GCF decisions, and laid out the expected deliverables for next year.  Offering an optimistic perspective, Ms. Hela affirmed that grants are scheduled to start being distributed next year in the hope that approved mitigation and adaptation projects can be presented at COP 21.  But for the GCF to be able to do so, the interested countries will have to do their homework and develop functioning institutions to tackle climate finance flow. From GCF’s part, Ms. Hela explained that procedure rules will be kept simple to allow “less process, more access.” 

This seems to be the ideal approach; climate funds bureaucracy has been one of the main obstacles for these funds to effectively reach vulnerable countries  – least developed, small island, and African countries.  But is this a fair procedure?  Many in the session raised concerns related to the hurry in approving projects for Paris 2015, and how this simplified, speed process will once again negatively impact countries that are more vulnerable to climate change impacts.  

climatefinancingsign_0The imbalance between least developed countries and larger developing countries has been seen through the years, and is present in several of the mechanisms adopted under the UNFCCC and the Kyoto Protocol.  The most critical example is the clean development mechanisms (CDM). During the first commitment period of the Kyoto Protocol, countries like China, Brazil, and India were responsible for hosting the majority of CDM approved projects. In the financing context, this gap is based on vulnerable countries’ lack of institutional capacity to properly enable climate finance flow.   

The bottom line is that less process is ideal, and it will lead to more access.  But without the right rules in place, it will not provide access to those countries that might be the highest in need. The readiness process offered by the GCF, while promising, will make difficult for these countries to take advantage of the fund resources if greater support for capacity building is not provided on time.  A lot of work will have to be done, but 2015 “hit the ground running” approach will, once again, leave the most vulnerable countries behind – the opposite direction of GCF’s goal.


REDD+ Recap

At COP 20, SBSTA made no progress on the Warsaw REDD+ framework on safeguards.  Philippines, Sudan, the EU, Bolivia and the US spoke in favor of developing further guidance on safeguards. The Africa Group said that further guidance is not needed, but that additional review of REDD+ in coming years should evaluate that question. Panama, on behalf of the Coalition for Rainforest Nations, said that now is the time for the implementation of REDD+, not to develop further guidelines.

Also this week, the International Tribunal on the Rights of Nature convened in Lima on December 5 and 6th. Cases ranged from fracking in Bolivia, mining in Ecuador, the BP Gulf Oil spill to… REDD+. Parties presenting their case against REDD+ alleged that the program is inherently flawed, as it is a commodification of nature. Further, Ninawa Kaxinawá, president of the Huni Kui people in Acre, Brazil claimed that REDD+ violates ILO 169, as the program has relentlessly failed to engage indigenous people in the decision-making process.

Ninawa Kaxinawá, President of the Huni Kui

Cassandra Smithie, a translator and interpreter, and Ivonne Yanez of Oilwatch presented evidence that REDD+ results in land-grabbing in the global south, by developed countries, who wish to offset their pollution. In other words, REDD+ allows companies to continue business as usual at the (further) expense of indigenous people elsewhere.

There is clear dissonance when one juxtaposes the lack of progress at COP 20 to the testimony presented at this weekend’s tribunal as well as evidence presented by CIFOR and others at the COP. It is clear that the integration of public participation principles is essential in order for REDD+ to offer non-carbon benefits, and indeed for it to accomplish its goal of curbing both deforestation and emissions. The principles of free, prior and informed consent must be integrated into the REDD+ framework under SBSTA. Now that the first monetary goal for the Green Climate Fund has been met, REDD+ projects are already lining up around the block for funding. The question remains whether safeguards and methodological guidelines will be put in place at Paris to ensure that projects are ethical and effective.


Australia wins the Fossil of the Day… again!

FossilSince COP 20 started 9 days ago, Australia has already won 3 of the 7 daily Climate Action Network (CAN) Fossil of the Day awards.  Last Thursday, Australia won the award for declaring that loss and damage should be an element of adaptation in the 2015 agreement. On Friday, the award was once again given to Australia due to its announcement that the country would not contribute to the Green Climate Fund (GCF). Yesterday, Australia was awarded for its silly statements, like the lack of understanding of what “global solidarity” means. But the interesting fact is that the award was given less than twenty minutes after the Australian Foreign Minister, Julie Bishop, affirmed at the Ministerial Dialogue on Climate Finance that Australia will, in fact, provide 200 million Australian dollars to the GCF in the course of four years. But shouldn’t the 200 million change of mind be enough to save Australia from its third  Fossil of the Day? CAN still does not think so