Gears Exclusive: GCF WTF? In other words, What’s the Green Climate Fund?

(Photo: Rob Fish, Gears of Change)

By Keith Brunner

Dec 7th, 2011

Durban, South Africa: Here in Durban, it looks like the piece of the negotiations which has the greatest chance of moving forward is an agreement on climate finance, and in particular, the design of the Green Climate Fund.  What is this fund?  How much money will be in it, who’s putting cash into it, and how is this related to climate change?  As this will be a major negotiating point over this final week of the COP17 here in Durban, we’d like to provide some background information below, in this rough sketch-up below.

Climate + Finance

Here at the UN Framework Convention on Climate Change, negotiations move forward on different ‘tracks,’ and cover a number of different topics that have been deemed important in past COPs (Conferences of the Parties; this is the 17th…COP17).  Some of those topics include: Mitigation (methods for actually reducing the amount of greenhouse gases being released into the atmosphere), Adaptation (how countries are adapting to a toasted planet), Technology Transfer (Issues around enabling Global South countries to access patents and designs of cleaner technologies), and, as we’ve mentioned, Climate Finance.

There are multiple approaches to the field of climate finance, which inform the discussions- and disagreements- about how it should be raised and administered.  Within the UN talks, there is a consensus that if all of the regions of the world followed the industrialization patterns of Europe, the US, and the other highest-polluting countries, we’d be in big trouble.  So there’s a push for money to be made available to Global South countries (with some groups pushing for grants, and others for low-income loans), which these countries can apply towards alternative, less fossil-fuel intensive development paths.  In other words, they can access this cash to mitigate their carbon emissions, preventing further climate destabilization, which is essentially a global public good.

There’s also a large push, coming most strongly from civil society and countries such as Bolivia who are most vulnerable to shifts in climatic behavior, to view climate finance through the lens of a climate debt.  The argument goes like this: Rich countries have industrialized at the expense of the poorest countries- regions which, due to the way the climate system works, are now feeling the strongest effects of climate chaos.  Therefore, the countries most responsible for historical climate-changing emissions owe a debt to those countries most affected by the crisis.  It’s based on a familiar principle: that the polluter pays.

From the Cancun Agreements to the Durban Mandate?

The idea of providing a fund which would disburse money related to climate change is not a new one.  From the Global Environment Facility (GEF) established in the 90’s, to the Adaptation Fund under the UNFCCC (which fills its pot through a 2% levy on transactions in the CDM market), to the growing portfolio of Climate Investment Funds managed by the World Bank, there’s already an array of bilateral and multilateral funding mechanisms designed to finance climate change-related activities in the Global South.  However, this array of funding mechanisms has been largely disjointed and uncoordinated, leading civil society and policy-makers to call for the creation of a new global fund, which would distribute new and additional money, and ideally be structured so that communities and regions most affected by climate change will have easy access to the fund.

Enter the Green Climate Fund.  Built last year off of a proposal put forth by the Mexican delegation, the Green Climate Fund (GCF) was passed in the COP16 Cancun texts, and a 24-member Transitional Committee for the Design of the GCF was established and charged with the task of fleshing out the details over the course of 2011.  As the Cancun Agreements were largely based on the Copenhagen Accord- a document which was crafted in secret by a few industrialized countries and which was ‘noted’, but not adopted, at COP15-, the GCF is working with the Copenhagen Accord goal of mobilizing $100 billion a year in climate finance by 2020, with “fast start” financing hitting $30 billion by 2012.  The World Bank, which had taken an early interest in the fund and has already been operating its Climate Investment Fund portfolio for 12 years, was named the Interim Trustee of the GCF, a position it will hold for three years until a formal review.

Over the course of 2011, the Transitional Committee (TC) met four times, attempting to work out such issues as private sector engagement with the fund, the question of whether the fund would have “legal personality”, whether it would be situated under and accountable to the COP, and a whole slough of questions surrounding the procurement of funds and their distribution.  At the final TC meeting in Cape Town, South Africa this October, where the TC was supposed to come to consensus and finalize a document on the GCF to forward to the COP17 in Durban, the US and Saudi Arabia blocked its passing, citing concerns in the text.  This meant that the delegates in Durban for COP17 would be dealing with an unfinalized text related to the design of the GCF, and raised the question of whether countries at the COP would seek to “open” the text for amendment- a move which would mean beginning a whole new round of political wrangling around the design of the fund.

According to the US, Norwegian, and other negotiators, it looks like the GCF document will not be opened here in Durban, however, it appears that a short “cover sheet” or “appendix” will be drafted and attached to it, which will have influence over the fund as it continues to be developed.  The word on Tuesday was that a separate, “informal” working group had been convened by the South African government, to develop an “alternative” text to the report from the Transitional Committee- raising the prospects that, similar to COP’s 15 and 16, an alternative text would be presented by the most powerful countries, and synthesized into the negotiating document at the last minute.

As we are covering World Bank side events, attending briefings, and reading reports of the negotiations, it’s becoming clear that the GCF here in Durban is moving further and further away from being a fund to address historical injustices and climate debt, and is fast becoming a trojan horse for a new “green” global free-market economic agenda.  Look for more on this issue soon.

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Gears Exclusive: “Where’s the Climate Finance?” NGO Report-Back from ALBA Nations

ALBA Nations Report Back to NGOS on Climate Finance

On Monday, December 5, 2011, representatives from Nicaragua, Ecuador and Bolivia held an informational consultation with members of NGOS on behalf of the Bolivarian Alliance for the Americas (ALBA) nations. The ALBA nations provided a report-back and analysis of the status of negotiations at this midway point in the UNFCCC conference and offered insights into the ALBA block’s negotiating strategy forward.

Traditionally, the ALBA nations have come forth with some of the most radical positions in negotiations. Bolivia in particular has repeatedly fought within the UNFCCC for policy stances which are largely considered to be unpopular within negotiations but were taken in the name of civil society. For example, last year Bolivia considered the final proposed text in Cancun to be “too weak” and stated after logging a formal block to the text that, “…we did not feel alone in opposing an unbalanced text at Cancún is that we received thousands of messages of support from the women, men, and young people of the social movements that have stood by us and have helped inform our position. It is out of respect for them, and humanity as a whole, that we feel a deep responsibility not to sign off on any paper that threatens millions of lives.”

Many NGOs have welcomed collaboration with ALBA nations in the past and have appreciated their insights into the negotiation floor. Today, The ALBA nations reported on the general far-left outlook on the negotiations thus far, and explain their positions on adaptation, mitigation and finance. GEAR Youth Media reports back will focus on the ALBA Nations position on climate finance and the Green Climate Fund. (GCF)

“Where is the climate finance?”

Paul Oakwood is the head of the Nicaraguan delegation, and has also served on the Transitional Committee for the creation of the Green Climate Fund (GCF). Mr. Oakwood spoke on the ALBA nations’ position on the issue of climate finance, one of the most contentious issues in Durban and also a field in which there is increasing pressure for progress, adoption and operationalization of the GCF.

In 2010, it was decided in the Cancun Agreement to establish a Green Climate Fund. This Fund was said to have a $100 billion budget, promised by the United States in Copenhagen, delivered by 2020. However, Least Developed Countries (LDCs) and Small Island Nations have stated that they can not wait that long and are calling for immediate financial assistance to help them adapt to the pressures of climate change. It was promised that there would be an additional $30 billion available called“fast-track financing” for these countries who needed immediate access to climate adaptation funding before the $100 billion is delivered.  Secretary General Ban Ki-Moon and others have repeatedly assured nations that the $30 billion of fast-track financing has “almost been identified”. However, Nicaragua insisted during that the promise to find the $30 billion dollars in fast track financing has not yet been fulfilled, noting the voluntary pledges of money will be insufficient to meet the goal. At this time no other additional sources of funding have been identified.

To address the promised $100 billion of the start-up budget of the GCF, the ALBA nations also reported concerns over the reality of that funding materializing as expected. According to Oakwood, at the third meeting of the Transitional Committee in Geneva, a United States representative clarified to Nicaragua that the $100 billion which had been pledged in Copenhagen as initial start-up was not a commitment, but rather a goal, and should not be confused with funds heading to the GCF. When Oakwood asked again in Durban, the US representative confirmed that those funds are both public and private and are not destined to the Green Climate Fund, but will have a variety of uses. It was also pointed out that there is “no roadmap or accounting” for that $100 billion expected to be delivered in 2020, additionally there is no effort to find funding between 2013 and 2019.

During the report-back, Mr. Oakwood also spoke on his experience working with the Transitional Committee, which he called a “continuation of the steamroller tactics of Copenhagen and Cancun” and claimed that the process was not driven by the countries contributing to the dialogue. Developing countries came together to write and propose a base negotiating text for the TC.  This proposed base negotiating text was co-sponsored by 13 developing countries and later supported by 4 more developing countries, giving this text the support of a total of 17 out of the 25 developing nations attending the Transitional Committee. Nicaragua alleges that this document was completely ignored by the co-chairs. Instead, as in past conferences, a negotiating text authored by the co-chair was introduced to the parties late in the evening. ALBA nations felt this co-chair text was not a product of the previous conversation and dialogue had by the parties and the document was submitted to them a “take it or leave it” basis.

Oakwood feels that, once again, the recommendations of the Transitional Commitment are being proposed in a take it or leave it basis. ALBA nations find this tactic troublesome as they see many points which still need to be negotiated and address. Among the many concerns with the Green Climate Fund, Nicaragua highlighted four:

1.       Jurisdiction/Authority-ALBA voiced concern over where the GCF will be housed noting that if the fund is not under the Conference of the Parties (COP) and the United Nations (UN) it may take on a “life of its own”.

2.       Full Legal Capacity- ALBA nations note that with no legal personality parties and nations are unable on access funding directly and would need third parties, such as the World Bank, to help them access funds. Without full legal capacity, the Fund can not sign contracts. Although members of the Global Environment Facility (GEF), a similar fund established in the 1990’s, spoke to the Transitional Committee about the challenges they face with this particular aspect in their organization, the addition of legal personality was ignored in Co-Chairs final document.

3.       National Designated Entity– ALBA nations reminded NGOS that every nation has their own adaption plans, polices, and programs to tackle climate change. However, as the text for the Green Climate Fund currently stands, the private sector will be able to operate directly within countries without consulting those national plans. ALBA anticipates that transnational corporations and business will use this clause to move technology as part of globalization, paying no attention to national sovereignty. This was highlighted to be a “red line” issue for ALBA and most Latin American countries.

4.       Source of Funding– How can you design a financial fund without specifying the sources of financing? Oakwood stated that the TC was told not to tackle the matter of finding sources of funding, as this was the responsibility of the Ad-Hoc Working Group on Long-term Cooperative Action (AWG-LCA). In Panama recently, the AWG-LCA, was also told not to deal with finding sources of funding, as this was the responsibility of the TC. Oakwood states the G20 in was tasked to climate the sources of climate finance, which would indicate that the GCF would be moved out of the UN and into the G20.  Nicaragua found this highly problematic as the G20 has no legal status and is controlled by the richest nations in the world.

ALBA nations vowed to raise their concerns during negotiations. At this time, the text on the GCF has not been negotiated but has been discussed in “informal” conversations among parties and ministers.

UPDATE:

12/7/11

As of Wednesday, it appears that a two page cover document will be produced in Durban, and considered along with the text.  We’ll be reporting back as to the progress on the development of the fund, and how the ALBA nations are moving forward with calling for an accountable and participatory fund.

Where’s the Money? ALBA Nations Report Back to NGO’s on Climate Finance

ALBA Nations Report Back to NGOS on Climate Finance

On Monday, December 5, 2011, representatives from Nicaragua, Ecuador and Bolivia held an informational consultation with members of NGOS on behalf of the Bolivarian Alliance for the Americas (ALBA) nations. The ALBA nations provided a report-back and analysis of the status of negotiations at this midway point in the UNFCCC conference and offered insights into the ALBA block’s negotiating strategy forward.

Traditionally, the ALBA nations have come forth with some of the most radical positions in negotiations. Bolivia in particular has repeatedly fought within the UNFCCC for policy stances which are largely considered to be unpopular within negotiations but were taken in the name of civil society. For example, last year Bolivia considered the final proposed text in Cancun to be “too weak” and stated after logging a formal block to the text that, “…we did not feel alone in opposing an unbalanced text at Cancún is that we received thousands of messages of support from the women, men, and young people of the social movements that have stood by us and have helped inform our position. It is out of respect for them, and humanity as a whole, that we feel a deep responsibility not to sign off on any paper that threatens millions of lives.”

Many NGOs have welcomed collaboration with ALBA nations in the past and have appreciated their insights into the negotiation floor. Today, The ALBA nations reported on the general far-left outlook on the negotiations thus far, and explain their positions on adaptation, mitigation and finance. GEAR Youth Media reports back will focus on the ALBA Nations position on climate finance and the Green Climate Fund. (GCF)

“Where is the climate finance?”

Paul Oakwood is the head of the Nicaraguan delegation, and has also served on the Transitional Committee for the creation of the Green Climate Fund (GCF). Mr. Oakwood spoke on the ALBA nations’ position on the issue of climate finance, one of the most contentious issues in Durban and also a field in which there is increasing pressure for progress, adoption and operationalization of the GCF.

In 2010, it was decided in the Cancun Agreement to establish a Green Climate Fund. This Fund was said to have a $100 billion budget, promised by the United States in Copenhagen, delivered by 2020. However, Least Developed Countries (LDCs) and Small Island Nations have stated that they can not wait that long and are calling for immediate financial assistance to help them adapt to the pressures of climate change. It was promised that there would be an additional $30 billion available called“fast-track financing” for these countries who needed immediate access to climate adaptation funding before the $100 billion is delivered.  Secretary General Ban Ki-Moon and others have repeatedly assured nations that the $30 billion of fast-track financing has “almost been identified”. However, Nicaragua insisted during that the promise to find the $30 billion dollars in fast track financing has not yet been fulfilled, noting the voluntary pledges of money will be insufficient to meet the goal. At this time no other additional sources of funding have been identified.

To address the promised $100 billion of the start-up budget of the GCF, the ALBA nations also reported concerns over the reality of that funding materializing as expected. According to Oakwood, at the third meeting of the Transitional Committee in Geneva, a United States representative clarified to Nicaragua that the $100 billion which had been pledged in Copenhagen as initial start-up was not a commitment, but rather a goal, and should not be confused with funds heading to the GCF. When Oakwood asked again in Durban, the US representative confirmed that those funds are both public and private and are not destined to the Green Climate Fund, but will have a variety of uses. It was also pointed out that there is “no roadmap or accounting” for that $100 billion expected to be delivered in 2020, additionally there is no effort to find funding between 2013 and 2019.

During the report-back, Mr. Oakwood also spoke on his experience working with the Transitional Committee, which he called a “continuation of the steamroller tactics of Copenhagen and Cancun” and claimed that the process was not driven by the countries contributing to the dialogue. Developing countries came together to write and propose a base negotiating text for the TC.  This proposed base negotiating text was co-sponsored by 13 developing countries and later supported by 4 more developing countries, giving this text the support of a total of 17 out of the 25 developing nations attending the Transitional Committee. Nicaragua alleges that this document was completely ignored by the co-chairs. Instead, as in past conferences, a negotiating text authored by the co-chair was introduced to the parties late in the evening. ALBA nations felt this co-chair text was not a product of the previous conversation and dialogue had by the parties and the document was submitted to them a “take it or leave it” basis.

Oakwood feels that, once again, the recommendations of the Transitional Commitment are being proposed in a take it or leave it basis. ALBA nations find this tactic troublesome as they see many points which still need to be negotiated and address. Among the many concerns with the Green Climate Fund, Nicaragua highlighted four:

1.       Jurisdiction/Authority-ALBA voiced concern over where the GCF will be housed noting that if the fund is not under the Conference of the Parties (COP) and the United Nations (UN) it may take on a “life of its own”.

2.       Full Legal Capacity- ALBA nations note that with no legal personality parties and nations are unable on access funding directly and would need third parties, such as the World Bank, to help them access funds. Without full legal capacity, the Fund can not sign contracts. Although members of the Global Environment Facility (GEF), a similar fund established in the 1990’s, spoke to the Transitional Committee about the challenges they face with this particular aspect in their organization, the addition of legal personality was ignored in Co-Chairs final document.

3.       National Designated Entity– ALBA nations reminded NGOS that every nation has their own adaption plans, polices, and programs to tackle climate change. However, as the text for the Green Climate Fund currently stands, the private sector will be able to operate directly within countries without consulting those national plans. ALBA anticipates that transnational corporations and business will use this clause to move technology as part of globalization, paying no attention to national sovereignty. This was highlighted to be a “red line” issue for ALBA and most Latin American countries.

4.       Source of Funding– How can you design a financial fund without specifying the sources of financing? Oakwood stated that the TC was told not to tackle the matter of finding sources of funding, as this was the responsibility of the Ad-Hoc Working Group on Long-term Cooperative Action (AWG-LCA). In Panama recently, the AWG-LCA, was also told not to deal with finding sources of funding, as this was the responsibility of the TC. Oakwood states the G20 in was tasked to climate the sources of climate finance, which would indicate that the GCF would be moved out of the UN and into the G20.  Nicaragua found this highly problematic as the G20 has no legal status and is controlled by the richest nations in the world.

ALBA nations vowed to raise their concerns during negotiations. At this time, the text on the GCF has not been negotiated but has been discussed in “informal” conversations among parties and ministers.

UPDATE:

12/7/11

As of Wednesday, it appears that a two page cover document will be produced in Durban, and considered along with the text.  We’ll be reporting back as to the progress on the development of the fund, and how the ALBA nations are moving forward with calling for an accountable and participatory fund.

GCF WTF? In other words, What’s the Green Climate Fund?

(Photo: Rob Fish)

By Keith Brunner

Dec 7th, 2011

Durban, SA: Here in Durban, it looks like the piece of the negotiations which has the greatest chance of moving forward is an agreement on climate finance, and in particular, the design of the Green Climate Fund.  What is this fund?  How much money will be in it, who’s putting cash into it, and how is this related to climate change?  As this will be a major negotiating point over this final week of the COP17 here in Durban, we’d like to provide some background information below, in this rough sketch-up below.

Climate + Finance

Here at the UN Framework Convention on Climate Change, negotiations move forward on different ‘tracks,’ and cover a number of different topics that have been deemed important in past COPs (Conferences of the Parties; this is the 17th…COP17).  Some of those topics include: Mitigation (methods for actually reducing the amount of greenhouse gases being released into the atmosphere), Adaptation (how countries are adapting to a toasted planet), Technology Transfer (Issues around enabling Global South countries to access patents and designs of cleaner technologies), and, as we’ve mentioned, Climate Finance.

There are multiple approaches to the field of climate finance, which inform the discussions- and disagreements- about how it should be raised and administered.  Within the UN talks, there is a consensus that if all of the regions of the world followed the industrialization patterns of Europe, the US, and the other highest-polluting countries, we’d be in big trouble.  So there’s a push for money to be made available to Global South countries (with some groups pushing for grants, and others for low-income loans), which these countries can apply towards alternative, less fossil-fuel intensive development paths.  In other words, they can access this cash to mitigate their carbon emissions, preventing further climate destabilization, which is essentially a global public good.

There’s also a large push, coming most strongly from civil society and countries such as Bolivia who are most vulnerable to shifts in climatic behavior, to view climate finance through the lens of a climate debt.  The argument goes like this: Rich countries have industrialized at the expense of the poorest countries- regions which, due to the way the climate system works, are now feeling the strongest effects of climate chaos.  Therefore, the countries most responsible for historical climate-changing emissions owe a debt to those countries most affected by the crisis.  It’s based on a familiar principle: that the polluter pays.

From the Cancun Agreements to the Durban Mandate?

The idea of providing a fund which would disburse money related to climate change is not a new one.  From the Global Environment Facility (GEF) established in the 90’s, to the Adaptation Fund under the UNFCCC (which fills its pot through a 2% levy on transactions in the CDM market), to the growing portfolio of Climate Investment Funds managed by the World Bank, there’s already an array of bilateral and multilateral funding mechanisms designed to finance climate change-related activities in the Global South.  However, this array of funding mechanisms has been largely disjointed and uncoordinated, leading civil society and policy-makers to call for the creation of a new global fund, which would distribute new and additional money, and ideally be structured so that communities and regions most affected by climate change will have easy access to the fund.

Enter the Green Climate Fund.  Built last year off of a proposal put forth by the Mexican delegation, the Green Climate Fund (GCF) was passed in the COP16 Cancun texts, and a 24-member Transitional Committee for the Design of the GCF was established and charged with the task of fleshing out the details over the course of 2011.  As the Cancun Agreements were largely based on the Copenhagen Accord- a document which was crafted in secret by a few industrialized countries and which was ‘noted’, but not adopted, at COP15-, the GCF is working with the Copenhagen Accord goal of mobilizing $100 billion a year in climate finance by 2020, with “fast start” financing hitting $30 billion by 2012.  The World Bank, which had taken an early interest in the fund and has already been operating its Climate Investment Fund portfolio for 12 years, was named the Interim Trustee of the GCF, a position it will hold for three years until a formal review.

Over the course of 2011, the Transitional Committee (TC) met four times, attempting to work out such issues as private sector engagement with the fund, the question of whether the fund would have “legal personality”, whether it would be situated under and accountable to the COP, and a whole slough of questions surrounding the procurement of funds and their distribution.  At the final TC meeting in Cape Town, South Africa this October, where the TC was supposed to come to consensus and finalize a document on the GCF to forward to the COP17 in Durban, the US and Saudi Arabia blocked its passing, citing concerns in the text.  This meant that the delegates in Durban for COP17 would be dealing with an unfinalized text related to the design of the GCF, and raised the question of whether countries at the COP would seek to “open” the text for amendment- a move which would mean beginning a whole new round of political wrangling around the design of the fund.

According to the US, Norwegian, and other negotiators, it looks like the GCF document will not be opened here in Durban, however, it appears that a short “cover sheet” or “appendix” will be drafted and attached to it, which will have influence over the fund as it continues to be developed.  The word on Tuesday was that a separate, “informal” working group had been convened by the South African government, to develop an “alternative” text to the report from the Transitional Committee- raising the prospects that, similar to COP’s 15 and 16, an alternative text would be presented by the most powerful countries, and synthesized into the negotiating document at the last minute.

As we are covering World Bank side events, attending briefings, and reading reports of the negotiations, it’s becoming clear that the GCF here in Durban is moving further and further away from being a fund to address historical injustices and climate debt, and is fast becoming a trojan horse for a new “green” global free-market economic agenda.  Look for more on this issue soon.