Finance €˜Hide and Seek’ in Bangkok
6 September 2018
In the midst of the finance ‘storm” falling on Bangkok, everyone wants to know what is next for the Green Climate Fund (GCF)?
ECO watched, with great disappointment, events unfold at the last GCF board meeting. While countries failed to come to any kind of agreement regarding procedural issues, the collapse of the last board meeting also postponed the approval of 11 projects, valued at almost $1 billion. These delayed projects have direct impacts on the ground. A three month delay means precious time lost for those who still require support to tackle the increasingly hostile impacts of climate change, to access renewable energy and to build low carbon and climate resilient societies.
So what’s the GCF all about? Supporting climate action around the globe, particularly for the most vulnerable countries. Created 8 years ago, the GCF is still a critical financial mechanism for countries to deliver much needed financial support and is the core multilateral fund to allow for full and fair implementation of the Paris Agreement. Since its inception, the GCF has proved that it is able to support a growing and diverse portfolio of projects. The quality of these projects has increased over time, and has helped support direct access entities and build the capacities of national implementing agencies.
ECO hopes that countries will use these last few days in Bangkok to underscore the value of, and reaffirm commitment to the Fund. The GCF must be back on track for its upcoming board meeting in October. The missteps in communication and governance that caused problems at the last board meeting can, and must be, resolved before the Board convenes in Bahrain.
Importantly, the largest substantive challenge facing the GCF is that it will soon run out of money. With about $2.7 billion left from its initial set of contributions, the GCF can only afford to approve a few more rounds of proposals and therefore must soon turn its attention to replenishment. As this process begins, ideally with a decision at the October GCF Board meeting, it must be underpinned by strong signals of cooperation from the GCF Board’s co-Chairs and renewed expressions of support from countries, free from pre-conditions.
Negotiators here in Bangkok can do a few things to help the GCF Board succeed in October. First, they can come to the table with concrete proposals to make the next replenishment process open, inclusive and transparent, rejecting the efforts by some to make it “donor-driven” in contradiction of the GCF’s principle of balanced governance. Second, they need to send a concrete signal that this round of replenishment will be ambitious, and amount to, at a minimum, a doubling of overall contributions compared to the last round. This will send a much-needed signal of good faith as we approach COP 24, as well as create confidence for the GCF Board to move forward with the ongoing efforts to improve its rules and procedures.