The fund was created at COP15 in Copenhagen in 2009 but major strides in operating the fund were made only last year in Cancun in Mexico at COP16.
Climate change will be expensive to manage and one of the most contentious issues in the negotiations is where that money will come from and who will dispense it.
Enter the Green Climate Fund. It is one of the key issues expected to be finalised in Durban at the climate change conference, COP17, and is likely to be one of the success stories of the conference.
The fund will help poor countries to adapt to climate change and to develop low-carbon economies. But, although there have been many promises to the fund, its coffers are empty.
The fund was created at COP15 in Copenhagen in 2009 but major strides in operating the fund were made only last year in Cancun in Mexico at COP16. The fund’s details are still contentious and delegates have compared it to having a bank without money.
Earlier this month, the United Nation’s climate chief, Christiana Figueres, said considerable progress was made during negotiations in Geneva at the beginning of September to move the setting-up of the fund forward.
Also Yannick Glemarec, executive co-ordinator of the global environment facility of the UN Development Programme, was positive that the fund would be finalised in Durban when he spoke at a breakfast in Johannesburg at the end of August. Hinting at his inside knowledge, he added that some negotiating parties were “quite positive” about the progress being made in finalising and formalising it.
He said about $100-billion should be raised by 2020 to fund the challenges of climate change and that the fund should take over a significant percentage of that. So far $30-billion has been pledged to the fund by 2012 and $100-billion a year by 2020. A $30-billion kickstart fund was supposed to be available from this year.
Between 2012 and 2020, the fund is to be increased until it reaches its full amount. But reports from international civil society group Civicus say that the UN has received only $12-billion for the fund.
A 40-member transitional committee, appointed in Cancun, is working through the nitty-gritty that is needed before the fund can formally come into being at the conference in Durban.
Mexico and South Africa are driving the process, with South Africa’s Planning Minister Trevor Manuel co-chairing it. Once the fund is established, it will be run by a 24-member board, half from developed countries and half from developing countries.
For its first three years, its assets will be administered by the World Bank. The chief objective of the fund is to pay for developing countries to change their development trajectories to more environmentally sustainable ones but it will also provide mitigation where the worst effects of climate change are felt.
For South Africa, this is particularly important given its reliance on coal. Speaking at a symposium on innovative financing for a low-carbon economy in August, Manuel said the country made a mistake decades ago in adopting an almost complete reliance on coal but this was changing. But the perceived lack of direction in South Africa’s green policy could create problems in receiving money from the Green Climate Fund.
The country’s green paper, released last year, has been severely criticised for its lack of specific proposals and plans on financing. Although getting different countries to agree on it might be hard, working out who will pay the $100-million is nigh impossible.
Manuel also said it was “easier to extract teeth from chickens” than to convince G20 finance ministers to part with money.