CSO Webinar on the Green Climate Fund (GCF)
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| Green Climate Fund Headquarters in Songdo, South Korea |
(Disclaimer: The contents are from the CSO webinar organized by APMMD as basic information on the Green Climate Fund)
GCF Basics (by
Claire Miranda)
CBDR - a principle within the United Nations Framework Convention on Climate Change (UNFCCC) that acknowledges the different capabilities and differing responsibilities of individual countries in addressing climate change.
During
COP15 in Copenhagen, Denmark, developed countries aimed to raise at least
$100B/year by 2020.
In 2010 during the COP16 in Cancun, Mexico, parties to the Convention agreed to the establishment of the Green Climate Fund, and make it the official financial mechanism of the UNFCCC.
GCF is
mandated to support global and national efforts to combat climate change and
help developing countries cope with its effects.
It
is aimed to become the largest public Fund for climate projects and
programs that promote “paradigm shift towards low-emission and
climate-resilient development pathways.”
GCF has set standards and safeguards that will equitably manage social and environmental risks and is also the first climate finance mechanism to mainstream gender and promote the rights of indigenous peoples.
A long process unfolded
before the GCF became operational.
A Transitional Committee was
set up to develop the Governing Instrument, which outlines objectives,
guiding principles, governance and institutional arrangements, operational
modalities, and other basic features of the design of the Fund.
In the first meeting of the Board, the GCF Rules of Procedure were adopted. It illustrates the rules for the Fund’s operations and defines the Fund’s accountability to the COP and alignment with the principles of the Convention.
The GCF Board spent almost 2
years to establish initial necessary policies before the Fund can mobilize
resources.
In 2014, the GCF
commenced its Initial Resource Mobilization and was able to raise a total of $10.3
billion*
By May 2015, the GCF
became fully operational. The first batch of funding proposals was approved
in October, just in time before the historic Paris Agreement in December.
GCF headquarters is
currently located at the G-Tower in Songdo, South Korea.
Who Runs the GCF?
GCF Board, GCF Secretariat, The
Trustee, Observers, UNFCCC
A 24-member Board takes GCF
decisions (with further 24 alternate members), divided equally to two country
constituencies - the developed and developing country BMs.
Two co-chairs (dev’d and dev’ng) share the role of facilitating deliberations during meetings and ensure consensus-based decisions.
The Board is mandated to
decide on activities that the Fund will support and “entities” it
will accredit that can apply funds for projects and programmes.
They also set rules, strategic plan, approve the budget, and appoints the Executive Director who will oversee the work of the GCF staff.
The GCF Secretariat is
responsible for the Fund’s day-to-day operations. Currently, Yannick
Glemarec, the Executive Director, leads a team of around 220 staff members
in Songdo.
The GCF has also hired consultants and specialists that support the secretariat’s work, especially on matters regarding the assessment of funding proposals and evaluation of accreditation proposals.
The Trustee is tasked to administer the resources received by the GCF, particularly the “receipt, holding and investment of financial contributions, transfer of financial resources under the instruction by the GCF, and preparation of financial reports.”
Since 2010, the World Bank serves as the interim Trustee of the GCF. It was supposed to last for the first 3 years of GCF operations, but its role was extended for another 4 years in 2019.
Civil society groups and the
private sector have no formal role in running the GCF but are consulted on a
broad range of issues.
Two “active observers” from
developing and developed country civil society (with two alternates) can make
interventions and raise concerns at GCF Board meetings.
The Fund values CSO input
and participation in various processes. CSO interventions, analysis, and
proposals to the GCF are collected and have shaped some Board decisions.
The GCF is accountable to
the 194 countries in the UNFCCC Conference of Parties that approved the
Governing Instrument. The parties to the UNFCCC are also to provide “guidance”
to the GCF and follow up annually on how the recommendations have been
implemented.
Where Does the GCF Get the Money?
The GCF can receive funds
from developed and developing countries, as well as philanthropic foundations
and private sector companies.
These funds may be in the
form of grants, loans, and capital.
During its first round of
resource mobilization (IRM in 2014), the Funds came mostly from developed
country governments. Taking into account foreign exchange losses and
unfulfilled pledges, the actual amount mobilized was only USD 7.2 billion.
For the second round, or the
first replenishment period (GCF-1 in 2019), contributor countries were urged to
double their pledges. The GCF raised a total of USD 9.6 billion.
Where Does the Money Go?
Activities funded by the
Fund:
The GCF Can support a broad
range of Climate Projects, but several “priority areas” have been identified by
the Board, although still broadly defined. To date, there are 129 approved
projects,
The Fund aims to maintain a
50:50 balance in supporting adaptation and mitigation activities, and
geographical balance, with close attention paid to “particularly vulnerable”
countries (LDCs, SIDS, Africa).
Current GCF project portfolio shows, mitigation receives the most significant chunk (39%), and adaptation projects receive less (26%).
The GCF also provides
support to countries (via the National Designated Authority) and entities
seeking accreditation. This is under the Fund’s Readiness and Preparatory
Support Programme.
Aimed to enhance capacity
and strengthen engagement with the GCF, NDAs, and entities endorsed by the NDAs
can be granted financial support for technical assistance and capacity building
activities.
GCF also supports national
adaptation planning and processes, as well as capacity building for entities
seeking accreditation.
How Can the Money be Accessed?
GCF does not implement
projects directly. It works with partner institutions called Accredited
Entities to run and manage climate projects.
AEs have undergone a
rigorous accreditation process to ensure that they have the capacity and system
to comply with GCF policies and standards in implementing the projects.
Governments, organizations, and private companies can either apply for accreditation to access the Fund or team up with AEs that will channel funds to them.
Direct Access Entities
(DAEs) are institutions endorsed by the NDAs from developing countries that can
access the money directly without going through an international organization.
International Access
Entities (IAEs) are big institutions like the various UN Agencies, MDBs, and
IFIs that have the broad reach, resources, and expertise in implementing
climate projects. No need for NDA endorsement.
The Accreditation Panel is
an independent technical panel that provides technical advice and recommendations
to the GCF Board for accreditation of DAEs and IAEs.
DAE vs. IAE
Although more than 50% of
the accredited entities are DAEs, the amount of funding channeled to them is
significantly less than the big chunk of money requested by IAEs.
Only 15% of the approved
funding proposals are from DAEs, while 85% from IAEs (top recipients are EBRD,
UNDP, and World Bank).
6 GCF Projects*
Total of USD 831 million (15% of GCF budget) -EBRD
27 GCF Projects
Total of USD 767 million (14% of GCF budget) - UNDP
Framework
on Climate Finance: Background on the Green Climate Fund By
Lidy Nacpil, APMDD
What is
Climate Finance
UNFCCC
l
Under the UN Framework Convention
on Climate Change
– climate
finance is an obligation of governments of “developed
countries” towards governments of “developing countries.”
l
Consistent with the UNFCCC
principle of “common but differentiated responsibilities.”
l
Outside the UNFCC – climate finance
are funds meant to be spent for or are being spent for climate programs –
regardless of source and recipient
l
Only climate finance, which is
consistent with what the Convention prescribes should be considered in
fulfillment of climate finance obligations.
Climate
Finance Flows
To South
Countries – Developing Countries
From private, multilateral banks (WB, ADB, etc.),
bilateral (as part of ODA), UNFCCC context, domestic allocations
Article 4
Provisions 3, 4
3.
The developed country Parties and other developed Parties included in Annex II
shall provide new and additional financial resources to meet the agreed full
costs incurred by developing country Parties in complying with their
obligations under Article 12, paragraph 1. They shall also provide such
financial resources, including for the transfer of technology, needed by the
developing country Parties to meet the agreed full, incremental costs of
implementing measures that are covered by paragraph 1 of this Article and that
are agreed between a developing country Party and the international entity or
entities referred to in Article 11, following that Article. The implementation
of these commitments shall take into account the need for adequacy and
predictability in the flow of funds and the importance of appropriate burden
sharing among the developed country Parties.
4.
The developed country Parties and other developed Parties included in annex II
shall also assist the developing country Parties that are particularly
vulnerable to the adverse effects of climate change in meeting costs of
adaptation to those adverse effects.
Article 4, Provisions 5 and 7
5. The developed country Parties and other developed
Parties included in annex II shall take all practicable steps to promote,
facilitate and finance, as appropriate, the transfer of, or access to,
environmentally sound technologies and know-how to other Parties, particularly
developing country Parties, to enable them to implement the provisions of the
Convention, in this process, the developed country Parties shall support the
development and enhancement of endogenous capacities and technologies of
developing country Parties. Other Parties and organizations in a position to do
so may also assist in facilitating the transfer of such technologies.
7. The extent to which developing country Parties will
effectively implement their commitments under the Convention will depend on the
effective implementation by developed country Parties of their commitments
under the Convention related to financial resources and transfer of technology
and will take fully into account that economic and social development and
poverty eradication are the first and overriding priorities of the developing
country Parties
Article 4, Provision 88.
In the implementation of the commitments in this Article, the Parties shall give full consideration to what actions are necessary under the Convention, including actions related to funding, insurance and the transfer of technology, to meet the specific needs and concerns of developing country Parties arising from the adverse effects of climate change and/or the impact of the implementation of response measures, especially onto
(a) Small island countries*
(b) Countries with low-lying coastal areas
(c) Countries with arid and semi-arid areas, forested
areas and areas liable to
forest decay
(d) Countries with areas prone to natural disasters)
(e) Countries with areas liable to drought and
desertification)
(f) Countries with areas of high urban atmospheric
pollution)
(g) Countries with areas with fragile ecosystems,
including mountainous
ecosystems;
(h) countries whose economies are highly dependent on
income generated
from the production, processing, and export, and/or on
the consumption of fossil
fuels and associated energy-intensive products and
(i) Land-locked and transit countries.
Climate Finance consistent with the UNFCCC Framework
§ Adequate and Additional
§ Obligatory, Predictable and Automatic
§ Public funding, Not private investments
§ Meant for public and publicly accountable programs
§ Should not be in the form of loans or
other debt creating instruments, should not lead to debt accumulation;
§ Free of conditionalities (not the same as
terms, criteria, process requirements)
§ Must not violate human rights
The
Campaign for A Global Climate Fund under the UNFCCC
Milestones n 2008 Climate Justice movements push for a
new Global Climate Fund – consistent with the call for Reparations for Climate
Debt and Delivery of Obligations under the UNFCCC (parallel proposal from
developing countries)
> 2010 – Decision by COP16 in Cancun to establish
the Green Climate Fund and created the Transitional Committee to draft a
proposal to the COP regarding design and mandate of the Green Climate Fund n
2011 – Decision by COP17 in Durban to approve the GOVERNING INSTRUMENT of the
Green Climate Fund
The different constituencies appointed> 2012 - the
members of the Board and the first Board meeting was held in Sept 2012
Key
Features of the A Global Climate Fund
Ø
Representative governance structure
and democratic processes; includes meaningful participation of civil society
and affected groups and communities
Ø
Provides adequate, additional
obligatory, automatic, public, and non-debt creating finance based on the
principle of “common but differentiated responsibilities.”
Ø
Covers the full needs for
Mitigation and Adaptation- for public and publicly accountable programs
Ø
Access for the Most Vulnerable
Ø
Participatory Design, Planning and
Implementation
Ø
Resources for Capacity Building of
Developing Countries
Ø
Upholds and Strengthens Rights
Ø
Independent (not under the control
of IFIs) and with own integrity but functions within the framework of the
UNFCCC
The Fight in the Year 2011 Period of the Work of the Transitional Committee Intensified Campaigning on the mandate and design Key Fights:
• Governance – developing countries as the majority
• Nature of the Fund – independent and its own
integrity, within the framework of the UNFCCC
The Fight in the Year 2011
• Structures and Processes
• World Bank Out of GCF
• No to Private Sector Facility
• Meaningful participation and engagement by CSOs and
affected communities in the decision-making and operations of the GCF
Governing
Instrument
>The resulting Governing Instrument that was
adopted - much railroading by representatives of developed countries during the
TC period and the Durban COP. The text was not entirely as they wanted – CSOs
and Developing Country representatives also scored some victories. On balance –
GCF GI was not thoroughly corrupt but neither ideal
Result in
terms of critical fights
>Governance – 50 – 50
>World Bank - Interim Trustee (not Secretariat or
Manager)
>Private Sector Facility – included but also covers
MSMEs, cooperatives, small associations, etc
>2 CSO non-voting representatives in the Board (Active Observers) to be chosen by CSO constituency, 1 for Developed Country, and 1 for Developing. - but also 2 private sector AOs; CSOs to be recognized as observers in Board processes
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