The Green Climate Fund (GCF) is a fund established within the framework of the

UNFCCC The United Nations Framework Convention on Climate Change (UNFCCC) established an international environmental treaty to combat "dangerous human interference with the climate system", in part by stabilizing greenhouse gas concentrations in th ...

as an operating entity of the Financial Mechanism to assist developing countries in

adaptation In biology, adaptation has three related meanings. Firstly, it is the dynamic evolutionary process of natural selection that fits organisms to their environment, enhancing their evolutionary fitness. Secondly, it is a state reached by the po ...

and mitigation practices to counter

climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...

. The GCF is based in

Incheon Incheon (; ; or Inch'ŏn; literally "kind river"), formerly Jemulpo or Chemulp'o (제물포) until the period after 1910, officially the Incheon Metropolitan City (인천광역시, 仁川廣域市), is a city located in northwestern South Kore ...

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...

. It is governed by a Board of 24 members and supported by a Secretariat. The objective of the Green Climate Fund is to "support projects, programmes, policies and other activities in developing country Parties using thematic funding windows". It is intended that the Green Climate Fund be the centrepiece of efforts to raise

Climate Finance Climate finance is "finance that aims at reducing emissions, and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change i ...

under the

. The current executive director is Yannick Glemarec.

History

Wealthier, industrialized countries have been the countries responsible for most greenhouse gas emissions. As a consequence, it has been argued that these countries are morally responsible to pay for a lion's share of the cost of climate mitigation worldwide, including costs of the transition of less developed and least developed countries. A number of civil society groups determined that the United States and the European Union are morally responsible for at least 54% of the cost of mitigating climate change-driven disaster damage in the

Global South The concept of Global North and Global South (or North–South divide in a global context) is used to describe a grouping of countries along socio-economic and political characteristics. The Global South is a term often used to identify region ...

. Others have argued that wealthier countries should help finance the transition of less developed and least developed countries because the former can more realistically afford the substantial investment now urgently needed for the transition. The Copenhagen Accord, established during the

2009 United Nations Climate Change Conference The 2009 United Nations Climate Change Conference, commonly known as the Copenhagen Summit, was held at the Bella Center in Copenhagen, Denmark, between 7 and 18 December. The conference included the 15th session of the Conference of the Part ...

(

COP-15 The 2009 United Nations Climate Change Conference, commonly known as the Copenhagen Summit, was held at the Bella Center in Copenhagen, Denmark, between 7 and 18 December. The conference included the 15th session of the Conference of the Parti ...

) in Copenhagen mentioned the "Copenhagen Green Climate Fund". The fund was formally established during the

2010 United Nations Climate Change Conference The 2010 United Nations Climate Change Conference was held in Cancún, Mexico, from 29 November to 10 December 2010. The conference is officially referred to as the 16th session of the Conference of the Parties to the United Nations Framework ...

in Cancun as a fund within the UNFCCC framework. Its governing instrument was adopted at the

2011 United Nations Climate Change Conference The 2011 United Nations Climate Change Conference (COP17) was held in Durban, South Africa, from 28 November to 11 December 2011 to establish a new treaty to limit carbon emissions. A treaty was not established, but the conference agreed to e ...

(COP 17) in

Durban, South Africa Durban ( ) ( zu, eThekwini, from meaning 'the port' also called zu, eZibubulungwini for the mountain range that terminates in the area), nicknamed ''Durbs'',Ishani ChettyCity nicknames in SA and across the worldArticle on ''news24.com'' from ...

Organization

During COP-16 in Cancun, the matter of governing the GCF was entrusted to the newly founded Green Climate Fund Board, and the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

was chosen as the temporary trustee. To develop a design for the functioning of the GCF, the "Transitional Committee for the Green Climate Fund" was established in Cancun too. The committee met four times throughout the year 2011, and submitted a report to the 17th COP in Durban, South Africa. Based on this report, the COP decided that the "GCF would become an operating entity of the financial mechanism" of the UNFCCC, and that on COP-18 in 2012, the necessary rules should be adopted to ensure that the GCF "is accountable to and functions under the guidance of the COP". Researchers at the

Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...

state that without this last minute agreement on a governing instrument for the GCF, the "African COP" would have been considered a failure. Furthermore, the GCF Board was tasked with developing rules and procedures for the disbursement of funds, ensuring that these should be consistent with the national objectives of the countries where projects and programmes will be taking place. The GCF Board was also charged with establishing an independent secretariat and the permanent trustee of the GCF. The fund partners with 84 organizations that include

commercial Commercial may refer to: * a dose of advertising conveyed through media (such as - for example - radio or television) ** Radio advertisement ** Television advertisement * (adjective for:) commerce, a system of voluntary exchange of products and s ...

and development banks, state agencies and

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere. Green-climate-gcf-fund-pledges

The Fund has set itself a goal of raising $100 billion a year by 2020, which is not an official figure for the size of the Fund itself. Uncertainty over where this money would come from led to the creation of a High Level Advisory Group on Climate Financing (AGF) by UN Secretary-General

Ban Ki-Moon Ban Ki-moon (; ; born 13 June 1944) is a South Korean politician and diplomat who served as the eighth secretary-general of the United Nations between 2007 and 2016. Prior to his appointment as secretary-general, Ban was his country's Ministe ...

in February 2010. There is no formal connection between AGF and GCF, although its report is one source for debates on "resource mobilisation" for the GCF, an item that will be discussed at the GCF's October 2013 Board meeting. Disputes also remain as to whether the funding target will be based on public sources, or whether "leveraged" private finance will be counted towards the total. As at 3 February 2020, a total of US$10.3 billion has been pledged and US$8.24 billion confirmed, as part of the Initial Resource Mobilization (IRM) period.Green Climate Fund
''Status of Pledges''. Retrieved 22 March 2020 The lack of pledged funds and potential reliance on the private sector is controversial and has been criticized by developing countries. U.S. President Obama committed the US to contributing US$3 billion to the fund. In January 2017, in his final 3 days in office, Obama initiated the transfer of a second $500m installment to the fund, leaving $2 billion owing. Former U.S. President

Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump graduated from the Wharton School of the University of P ...

in his announcement of U.S. withdrawal from the Paris Agreement on 1 June 2017, also criticized the Green Climate Fund, calling it a scheme to redistribute wealth from rich to poor countries.

Issues

The process of designing the GCF has raised several issues. These include ongoing questions on how funds will be raised, the role of the private sector, the level of "country ownership" of resources, and the transparency of the Board itself. In addition, questions have been raised about the need for yet another new international climate institution which may further fragment public dollars that are put toward mitigation and adaptation annually. The Fund is also pledged to offer "balanced" support to adaptation and mitigation, although there is some concern amongst developing countries that inadequate adaptation financing will be offered, in particular if the fund is reliant on "leveraging" private sector finance. While GCF governing instrument stresses on the need for equal funding towards adaptation and mitigation, there is no universal measure of adaptation, which makes access to GCF funding extremely cumbersome. Various Governance issues, and a toxic working culture relayed by whistle-blowers have led the GCF to become an increasingly less relevant organization on the global climate front. The Fund's initial investments have met with mixed responses. The Fund's former director Héla Cheikhrouhou has complained that the Fund is backing too many "business-as-usual types of investment proposals", a view echoed by a number of civil society organizations. But in at least one case it also drew praise for involving local communities in the formulation of an adaptation project, and for incorporating consumer protection into a plan for off-grid solar energy.

Role of the private sector

One of the most controversial aspects of the GCF concerns the creation of the Fund's Private Sector Facility (PSF). Many of the developed countries represented on the GCF board advocate a PSF that appeals to capital markets, in particular the pension funds and other institutional investors that control trillions of dollars that pass through Wall Street and other financial centers. They hope that the Fund will ultimately use a broad range of financial instruments. However, several developing countries and non-governmental organizations have suggested that the PSF should focus on "pro-poor climate finance" that addresses the difficulties faced by micro-, small-, and medium-sized enterprises in developing countries. This emphasis on encouraging the domestic private sector is also written into the GCF's Governing Instrument, its founding document.

Additionality of funds

The Cancun agreements clearly specify that the funds provided to the developing countries as climate finance, including through the GCF, should be "new" and "additional" to existing development aid. The condition of funds having to be new means that pledges should come on top of those made in previous years. As far as additionality is concerned, there is no strict definition of this term, which has already led to serious problems in evaluating the additionality of emission reductions through CDM-projects, leading to counter-productivity, and even

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

. While climate finance usually only counts pledges from developed countries, the US$10.3 billion pledged to the GCF also includes some (relatively small) contributions from developing countries.

Failure to ban fossil fuel funding

At its board meeting in South Korea held in March 2015, the GCF refused an explicit ban on fossil fuel projects, effectively allowing for the funding of coal plants. Japan, China, and Saudi Arabia opposed the ban.

References

External links

* {{Official website, http://greenclimate.fund
List of accredited entities
Climate change finance Climate change policy Funding bodies United Nations Framework Convention on Climate Change Organizations established in 2010 2010 establishments in South Korea Organizations based in Incheon