Europe wants to replenish UN Green Climate Fund

The draft of the final summit statement reads that the European Council plans to replenish the UN Green Climate Fund as part of the EU's transition to climate neutrality. [EPA-EFE/Carsten Koall / POOL] [EPA-EFE/Carsten Koall / POOL]

EU member states want to replenish a UN fund aimed at supporting developing nations cut carbon emissions and adapt to climate change, according to draft conclusions from next week’s EU summit. EURACTIV Germany reports.

The climate crisis will be high on the agenda when EU heads of state and government meet in Brussels at the end of next week.

A draft summit statement, seen by EURACTIV, says EU leaders “support the fair transition to a climate-neutral EU,” adding that the bloc’s long-term strategy for climate change will be published “in early 2020”.

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Talks on a climate plan for 2050 should wrap up by the end of this year in view of final adoption in early 2020, according to the draft conclusions of an EU summit taking place next week in Brussels.

But they don’t want to stop there. EU member states also “remain committed to scaling up the mobilisation of international climate finance” in order to support climate protection at the global level.

Specifically, the draft calls for “a timely, well-managed and successful replenishment process for the Green Climate Fund,” which supports green projects in developing countries.

The Seoul-based fund is an instrument of the United Nations Framework Convention on Climate Change (UNFCC). Financed by industrialised countries, it is intended to help developing nations cut carbon emissions and adapt to climate change.

Over the past four years, the GCF has distributed some $5 billion to approximately 100 projects in the form of debt, equity, grants and guarantees.

But this is a drop in the ocean compared to what is needed. According to the OECD, $6.9 trillion will be required every year up to 2030 to meet climate and development objectives. Not even half of that is currently being invested.

Sustainable financing can no longer operate as a niche, German finance expert says

In an interview with EURACTIV Germany, Deutsche Börse Group’s head of sustainability management, Kristina Jeromin, spoke about the increasing involvement of shareholders in the activities of their respective companies and explained why she considers ‘Greenwashing’ accusations to be destructive.

Moreover, the GCF’s resources are now almost exhausted. Although total commitments increased to over $10 billion, slightly more than half of that amount has actually been transferred to the fund.

The largest announced contribution came from the US with $3 billion, but only $1 billion has been transferred so far.

In the EU, member states pay into the fund directly. The sums vary between countries and member states do not coordinate on this.

Next week’s draft summit statement, however, suggests an increase in the fund’s importance. In the latest round of commitments, two countries announced that they would double their contribution to the GCF: Germany with $1.5 billion and Norway with $ 92.3 million per year. Further commitments are expected at the UN climate summit in September.

The decision to establish the GCF was taken in 2010, at the UN’s climate conference in Cancun. From there, it took five years for the first dollars to be transferred to the beneficiary countries. Decisions regarding the UN instrument are taken unanimously by a board of 24 members – half of them coming from developing countries, and the other half from industrialised nations.

At the beginning of the year, Frenchman Yannick Glemarec was appointed as the new Managing Director of the GCF.

In a YouTube message, Glemarec said: “the climate crisis presents us with a Herculean task, for which we barely have time. We need to mobilise additional financial resources.”

The new Managing Director plans to collect $100 billion by 2020.

[Edited by Frédéric Simon]

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