The board of the UN Green Climate Fund is meeting from 6 to 8 July in Songdo, South Korea. The board is set on heralding a “paradigm shift” in climate financing and intends to accelerate the decision-making process to boost the fund’s replenishment. EURACTIV Germany reports.
The Green Climate Fund (GCF) wants to give global climate financing a strong boost by the end of this year. Twenty-four of the fund’s board members discussed strategy in the South Korean city of Songdo this weekend (6-8 July).
In the run-up to the meeting, a person working for the fund told EURACTIV that the Board of the GCF will decide on new criteria for the allocation of funds and how to promote sustainable projects to investors.
Right now, processes are slow, with the acquisition of permits sometimes taking years.
“It deters private investors. This weekend is about making important progress – especially to ensure that the fund is well replenished in November,” Alexandra Tracy, representative of the Climate Markets and Investment Association (CMIA) at the GCF, told EURACTIV before the meeting took place.
In November, donor countries and the GCF’s Board will be meeting to make binding commitments for further financing.
The Global South is the most affected by climate change
At the UN Climate Change Conference COP15 in Copenhagen in 2009, industrialised countries committed themselves to investing $100 billion annually in climate-related projects in developing countries from 2020 at the latest.
This was the condition for many poorer states to agree to climate targets. In other words, support for the many necessary investments needs to come from wealthy countries.
After all, the world’s poorest, around 3.5 billion people, are currently responsible for only around 10% of global carbon emissions. Yet, they are the most affected by the consequences of climate change.
The GCF is one of the mechanisms that would allow for the mobilisation of additional financial resources. Of the $7 billion transferred to the fund by member states, $5 billion dollars have been invested in 102 projects in the last four years.
Ten additional projects worth $266 million dollars are being decided on during this weekend’s board meeting. The largest project deals with financing a Chilean pumped storage power plant with which the country intends to increase its wind and solar energy to one-fifth of its total energy sources.
Fewer hurdles for promising projects
Experts are eagerly awaiting the results of the meeting taking place since Saturday (6 July) and scheduled to end on Monday (8 July) in South Korea.
The fund’s increase was subject to many discussions between meetings during the United Nations Framework Convention on Climate Change (UNFCCC) in Bonn (17-27 June).
“We hope for decisions that will make the GCF more effective. The fund has many ambitions – this is an important step before the UN summit on 23 September”, said Yamide Dagnet, an analyst at the American think tank World Resources Institute, on the sidelines of the conference.
With regard to efficiency, the aim is to ensure that projects can be approved more quickly in the future.
Until now, organisations have had to accredit themselves first to the GCF and then apply with their individual projects.
According to the GCF employee EURACTIV spoke to before the conference, bureaucratic hurdles need to be reduced.
The board is also deciding on new internal decision-making mechanisms to avoid any kinds of hurdles. Instead of the unanimity principle, central decisions could soon be adopted by a simple majority.
“The big goal for the weekend”
“The reforms should encourage the industrialised countries to increase their contribution to the fund,” said Dagnet.
Last December, Germany and Norway announced that they would double their contributions to the GCF. After the 28 EU member states were unable to agree on further steps towards climate neutrality by 2050 at the last European Council, it would appear important for states to send new signals.
“Germany has given a boost, and we want other countries to do the same,” she added. It would be necessary to enforce states to contribute, especially since the US and Australia, for example, had not intended to make additional payments.
The gap left by these states must be closed, said CMIA’s Tracy, who is relying on Japan and on EU member states to close it.
Non-state actors should also be targeted – but in order to reach them, the fund needs to become more efficient.
“That’s the big goal for the weekend,” Tracy said.
[Edited by Zoran Radosavljevic]