Anti-corruption watchdog Transparency International (TI) urged the Green Climate Fund’s board to give citizens a much bigger voice at its meetings, as it begins to work out how to administer up to $100 billion a year to help developing nations adapt to a warmer world and curb their greenhouse gas emissions.
“We need a balance between the urgency to achieve results and the due diligence required to protect climate money and ensure its effectiveness,” said Lisa Ann Elges, head of TI’s climate governance integrity programme.
The proposed arrangements allow just two civil society observers to participate actively in board meetings, one each from the developed and developing worlds - the same level of representation allotted for the private sector. Guidelines say an active observer may speak but not vote.
Researchers and climate activists are concerned that the private sector may be given too large a role in running projects financed by the fund, and it will be difficult to track what businesses are doing.
But access to the fund's resources for companies and private financial institutions is regarded by some debt-laden wealthy governments as a carrot to raise additional money from private sources - without which they are reluctant to loosen their own purse strings.
"There is an understanding that the more the Green Climate Fund is private investor-friendly, the more likely it is that developed countries will put money in," said Janet Redman of the Washington-based Institute for Policy Studies.
RIGHT TO OBJECT
She and other experts want rules to ensure that private-sector activities financed by the fund will not undermine the development of poorer nations and vulnerable people who rarely get a say in such decisions.
"The private sector has its motives, but these have to line up with the interests and priorities of developing-country governments and what the people who are going to be most impacted by climate change want and need," Redman told AlertNet.
Although the issue is not on the agenda for this week's meeting, which runs from Thursday to Saturday in Geneva, Redman and colleagues from Friends of the Earth U.S. and the Global Alliance for Incinerator Alternatives have issued a paper exploring how a balance of interests could be achieved.
It notes that the fund's board is already charged with developing a mechanism - called a "no-objection procedure” - to ensure that countries and their citizens consent to and steer the activities it finances, and have the right to reject flawed or harmful projects.
“A poorly-designed or implemented no-objection procedure could lead to a severe deterioration of genuine country ownership, serious compromises in environmental integrity and/or social justice, and potential conflict with national law," it warns.
The paper also advises against the increased use of financial intermediaries, such as investment banks and private equity funds, which could make it harder to ensure compliance with safeguards and the no-objection procedure.
Women's groups have praised the Green Climate Fund for making history as the first global climate finance mechanism to include gender equality concerns from the start, but say these must be put into practice.
Of the 24 fixed board members, only five are women, with three others nominated as alternative members, U.N. experts and the Women's Environment and Development Organization said in a brief prepared for this week's meeting.
The fund aims to start disbursing money from the beginning of 2014 and, if it gets up and running as planned, could help facilitate a new global deal on cutting greenhouse gas emissions, due to be agreed in 2015, climate experts say.
Although the first board meeting was delayed by wrangling among countries over its composition, the fund is nonetheless regarded by many as one of the bright spots in fractious international climate negotiations.
One major sticking point is likely to be how much money the fund will receive, from which countries and alternative financing sources, with some richer developing countries arguing they should not be expected to contribute.
U.N. climate talks in 2009 set a goal of mobilising $100 billion per year by 2020 to help vulnerable nations tackle climate change, but firm interim commitments on top of "fast start" funding of around $30 billion from 2010-2012 have yet to be made.