Now that the political decision was made in Cancun in December to set up a global Green Climate Fund, the task turns to the only seemingly more mundane and less glamorous work of figuring out what the GCF should look like and what it can and should do. Provided, of course that there will be a significant chunk of money flowing through a new GCF. However, this seems less than clear and might be the biggest of several major design challenges such as its governance facing the new fund…. (more…)
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Designing — and Funding! — the new Green Climate Fund
A Stark Choice — Two Opposing Models for the Global Climate Fund
With just a few negotiation days left and the high-level segment of the COP 16 in Cancun now officially started, ministers and their teams face a stark choice in deciding what kind of global climate fund they should throw their support behind – one that will largely continue the traditional donor-recipient relationship between industrialized countries and developing countries and mimic development aid flows (model of the World Bank climate investment funds) or the one which puts that relationship on a new footing and restores developing countries’ faith in the seriousness of the developed countries commitments (a larger scale and improved Adaptation Fund model). Given this introduction, it is not difficult to figure out which of the two strongly opposing options I personally favor…. (more…)
B+ for Effort, C -for Execution — The EU’s Fast Start Finance Report
Well, let’s start with the good news first: the European Union and its 27 member countries have been good to their word and delivered a summary report on fast-start-finance commitments in time for the COP 16 in Cancun. It is to be EUR 2.2 billion in 2010. As such, the EU — and the member countries who have taken the exercise serious enough to provide specific individual project information – have to be commended, and I give them a B+ for effort and initiative. It cannot be easy for the EU Commission to try to bring 27 rascally students, pardon, countries, to order and make them do their homework in time.
Other industrialized countries, such as Japan, the United States or Australia have likewise joined in a mad scramble pre-Cancun — maybe as part of the peer pressure the early EU commitment for such a report created — and offered their take on how they are contributing to fulfilling the collective political pledge industrialized countries made a year ago in Copenhagen to come up with US$ 10 billion in “new and additional” fast start money for climate change action in developing countries for 2010, 2011 and 2012 respectively.
Alas, the execution of these reporting efforts is still insufficient. I’ll give the EU effort, the most comprehensive of the FSF reporting by industrialized countries, a C – at present, but hold out hope for, and encourage, improvement, both short-term (for the next report) and long-term (in the way climate funding is delivered).
EU Bank Creates New Climate Fund
Just a few days ago, the European Investment Bank (EIB), the financing arm of the EU and its 27 member countries, formally joined the ranks of other multilateral development banks and the World Bank in creating its own climate change fund — thus contributing to the proliferation of new climate funds, supporting the claim of other development organizations to be best equipped to manage large climate financing sums and thereby further undermining a future leadership role of the UNFCCC and its financing mechanisms in the emerging global climate finance architecture.
The new Interact Climate Change Fund, ICCF was established in cooperation with the French development agency (AFD) as well as a group of 15 bilateral European development groups organized in the Association of European Development Finance Institutions (EDFI). Focus of the new Fund, whose finance volume was not publicly disclosed, are private sector investments in climate change projects in Africa, the Caribbean and the Pacific, Asia and Africa, all to be undertaken in the course of this year, which the ICCF aims to support by matching investment amounts. The Fund will act as “catalytic lead investor” in renewable energy and clean technology projects to extend energy access and provide energy stability in developing and emerging market economies.
