Thomson Reuters Foundation

Inform - Connect - Empower

FACTBOX-The Green Climate Fund

Source: Thomson Reuters Foundation - Sun, 11 Nov 2012 08:01 GMT
Author: Reuters
cli-fin hum-aid
Tweet Recommend Google + LinkedIn Email Print
Leave us a comment

Nov 11 (Reuters) - Many developing countries hope United Nations climate talks in Qatar later this month will make progress on scaling up finance to help them curb greenhouse gas emissions and cope with floods, droughts, heatwaves and rising sea levels.

Developed nations agreed in 2009 to raise climate aid, now about ${esc.dollar}10 billion a year, to an annual ${esc.dollar}100 billion from 2020.

In 2011, countries established the Green Climate Fund (GCF) to manage a large proportion of that aid but the fund is still empty and the economies of many developed nations are struggling to come up with the cash.

So far, there has been no discussion by the fund about how to raise ${esc.dollar}100 billion from public and private sources and campaigners hope for some progress to be made on this at a meeting in Doha, Qatar, from Nov. 26-Dec. 7.

Following are details of the fund and the main sticking points. For more on climate finance, see

DESIGN AND PURPOSE

Poorer countries, particularly in parts of Africa, Asia and small island nations, are the most vulnerable to rising sea levels and more intense droughts and floods that could trigger crop failures, damage infrastructure and disrupt water supplies.

They blame the major industrialised nations for pumping large amounts of carbon dioxide from burning fossil fuels into the atmosphere and say those nations should help pay for the cost of adapting to weather extremes. They also want cash and easier access to clean energy technologies.

The fund is supposed to start operating from 2013 and wealthier nations are being urged to pledge money.

The fund will provide money and other assistance to help poorer nations shift towards low-emissions power generation and adapt to the impacts of climate change, with a focus on the urgent needs of nations highly vulnerable to climate change.

Private sector funds can also contribute towards programmes.

Poorer nations can access funds via multilateral lending agencies or specialist U.N. bodies or directly after an accreditation process. Countries can nominate domestic agencies to access funds but these need to be vetted.

Financing can be in the form of concessional lending, grants and other types as decided by the board.

GOVERNANCE AND LOCATION

The fund is governed and supervised by a board which has 24 members, appointed for 3 years, with an equal number from developed and developing countries.

Decisions are meant to be by consensus -- so far there are no agreed voting rules if that is impossible.

Two co-chairs are elected by the board to serve for a year - one from a developed nation and one from a developing country. The current co-chairs are from Australia and South Africa.

The board holds meetings every few months. The next one will be held in Berlin in March next year.

The fund will be based in Songdo, Incheon City, in South Korea although this decision still has to be endorsed by environment ministers at the U.N. climate talks in Doha.

South Korea is now under pressure to make the first sizeable contribution to the fund and to get other developed countries to make immediate pledges.

DIFFICULTIES

The board's first meeting in August was delayed by five months because Asian and Latin American nations took longer than expected to agree on their board members.

At this stage, the GCF is still an empty shell. It is still unclear how much money it will have access to and how it will raise funds from the private sector.

The fund now has to decide on a clear fund-raising strategy and then work on ensuring direct access to its funds.

Climate Action Network International is urging developed countries to commit at least ${esc.dollar}10-15 billion to the fund from 2013-2015 in Doha but this looks doubtful.

Another sticking point is around the concept of "new and additional" finance. Countries have agreed that money disbursed through the GCF should be "new and additional" to existing development aid but this concept is rather vague and gives rise to conflicting views on the definition of additionality.

What the money should be used for could also be a matter of debate as developing nations have traditionally argued that the GCF should principally finance adaptation.

Richer countries would prefer funds to be directed towards mitigation, or cutting greenhouse gas emissions, as it has wider, not just local, benefits. Sources: UNFCCC, http://gcfund.net/, Reuters (Compiled by Nina Chestney; Editing by Giles Elgood)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of the Thomson Reuters Foundation. For more information see our Acceptable Use Policy.

comments powered by Disqus