Civil Society recommendations for the design of the UNFCCC Green Climate Fund

At the COP 16 held in Cancun, Mexico, from 29 November to 10 December 2010, a Green Climate Fund was established, to be designated as an operating entity of the financial mechanism of the Convention under Article 11, with arrangements to be concluded between the COP and the Green Climate Fund to ensure that it is accountable to and functions under the guidance of the COP. The Green Climate Fund will support projects, programmes, policies and other activities in developing country Parties using thematic funding windows (to manage about $100 billion annual mobilization pledge from industrialized nations)

The Fund will be governed by the Green Climate Board comprising 24 members, as well as alternate members, with equal number of members from developing and developed country Parties. The assets of the Green Climate Fund shall be administered by a trustee only for the purpose of, and in accordance with, the relevant decisions of the Green Climate Fund Board. The World Bank was invited by the COP to serve as the interim trustee of the Green Climate Fund, subject to a review three years after operationalization of the Fund. The COP also decided that an independent secretariat shall support the operations of the Fund.

According to ODI, many are looking to the establishment of this fund as the solution to adequately and appropriately address climate finance; others caution that ambitious steps need to be taken to avoid the ‘Green Fund’ turning out to be an ‘Empty Fund’ whose function is limited to attaining the buy-in of developing countries into a binding international climate policy regime. But the design of the GCF has to address a large number of concerns, the details of which remain unresolved within the negotiations. Issues relating to what role it will play in providing sustainable finance at scale; how it will fit into the existing development assistance and climate financing architecture; how it will allocate finance to developing countries; and how finance will be delivered effectively, all remain to be clarified. This represents an ambitious agenda and much progress will need to be made quickly if a working proposal is to be put to the delegates at the next COP meeting.

But civil society organizations say that the World Bank should have no role in climate finance. In fact, with the creation of the Green Climate Fund, activists have now raised a flag for attention of the ‘design stage actors’ of the GCF (the transitional committee) to highlight what they see as important recommendations for the design of the UNFCCC Green Climate Fund. These include a call for nonprofit groups to have a seat at the table when funds are disbursed to help vulnerable countries cope with climate impacts and shift to lower-carbon economies. It also proposes environmental and social safeguards for government bodies to adhere to, like ensuring that indigenous communities are not forced off their land and compliance with labor standards. Furthermore, they add that only clean and efficient energy technologies are to be funded by the GCF but not fossil fuel-based technologies.

Read the full Civil Society Recommendations for the Design of the UNFCCC Green Climate Fund