Deutsche Klimafinanzierung

Green Climate Fund (GCF)

Who will rally behind the Green Climate Fund? Who will let it down?

Berlin pledging conference for the Green Climate Fund

Berlin pledging conference for the Green Climate Fund. Photo © Thomas Wolf, under Creative Commons licence

In a week from now, we will know how much there is behind the warm words of rich country governments’ promised assistance to help poor countries deal with the impacts of climate change and shift to climate-friendly development pathways.

On 20 November, the much-awaited pledging conference for the Green Climate Fund (GCF) will take place in Berlin, Germany. Although in theory everyone – governments, private companies or philanthropic foundations etc. – can contribute to the fund, it is the governments of developed countries that promised to fill the fund when it was first announced at the UN climate summit in Copenhagen back in 2009. Back then, the Fund was one of the outcomes that saved the summit from collapsing. The GCF complements the existing climate finance architecture and is supposed to, and this is its unique role, support climate action in developing countries at a much bigger scale, contribute to shifting private investment flows and focus on actions that have more than a one-off impact, helping to transform entire sectors while contributing to sustainable, climate-resilient  and low-carbon development. 50 per cent of the GCF’s resources will be allocated to reducing and avoiduing emissions, the other 50 per cent will be spent to support developing countries on adapting to the changing climate, with half of the latter reserved for the most vulnerable countries.

It took five years to design the fund, but now that the board of the GCF completed the preliminary work on funding priorities, eligibility criteria, or procedures for accessing the money earlier this year, the fund is open for business – and for receiving serious pledges from the rich country camp.

What can we expect from next week?

Developing countries have demanded at least $15 billion in initial pledges. Developed countries say they would be happy if they manage to cough up $10 billion. Whatever the final amount will be, substantial resources are needed to get the GCF off to a good start and to build mutual trust and political momentum in the months left to negotiate and agree a new international climate agreement. The Norwegian Environment Minister Tine Sundtoft has clearly stated: “We will only get a meaningful deal in Paris in 2015 with a solid Green Climate Fund. The first resource mobilisation will be viewed as proof of how committed we are to this Fund.”  Well said.

A handful of countries have made pledges already. Among them are Germany and France with $1 billion each, Sweden with an impressive $550 million or even South Korea, despite being a developing country, with $100 million, matching the Swiss pledge of the same amount. The chart gives an overview of pledges made so far.

Note the impressive Swedish pledge that is by far the most ambitious in relation to the country’s economic size. Will anyone match them next week?

All eyes are now on the remaining lot. How much countries will pledge is treated as top-secret information. Oxfam has been told by the US and the UK that we will “like” their pledges. Countries like Canada or Japan have been silent so far. Australian PM Tony Abbot has shown great reluctance to make a pledge – somewhat in line with his recent record on climate (in-)action, but we are ready to be surprised. Norway said it will adjust its rather modest pledge ($33 million) made at the UN Climate Summit. Very little is known about New Zealand and quite a few EU Member States, in particular Austria, Spain, Italy, Belgium, Ireland or Poland that so far are all dragging their feet. Instead, rumours are that more developing economies might announce contributions. If they do, this will embarrass those rich countries that plan to walk away from Berlin without a pledge – or aren’t even bothering to show up at all.

What’s a decent pledge for my country?

My colleague Annaka Peterson Carvalho from Oxfam America had, a while ago, suggested distribution keys that took into account developed countries’ relative shares of emissions, economic capability or relative contributions to other funding needs such as the Global Environment Facility or official development assistance. The results show that France’s and Germany’s pledges are in the right category and that Sweden is the leader, miles ahead.

It is still a long way to go to reach the minimum of $10 billion at the conference next week. A lot will depend on large pledges expected from the US, the UK or Japan – but let there be no doubt: every developed country is expected to make a contribution; that was the understanding when the Fund was set up five years ago and that understanding must not be betrayed next week. Everyone is in the spotlight: Belgium, Poland, New Zealand, Australia, Canada, Iceland, Ireland, Norway, Monaco, Italy, Spain, Portugal, Austria – they now have a week left to prepare their pledges.

At this stage, in the final days before the pledging conference, governments will most likely want to ensure they are not embarrassed if compared to other countries’ pledges. Fair enough. So what would Australia have to put on the table so it matches the Swiss pledge on ambition? What would Poland do to be as forthcoming as say Germany or Sweden?

The table below tells you exactly that – what other (selected) countries yet to make a pledge would bring to Berlin next week if they were to match any of these three countries – adjusted for economic size, of course.

Table 1: Theoretical pledges to match existing pledges in relation to countries’ capabilities

What countries would have to pledge to match the pledges by

Country

Switzerland ($100m)

Germany (~$960m)

Sweden (~$550m)

United States

$2.6 billion

$4.4 billion

$16.6 billion

United Kingdom

$388 million

$659 million

$2.5 billion

Japan

$754 million

$1.3 billion

$4.8 billion

The Netherlands

$123 million

$209 million

$789 million

Belgium

$78 million

$133 million

$501 million

Finland

$40 million

$67 million

$254 million

Australia

$240 million

$408 million

$1.5 billion

Canada

$281 million

$478 million

$1.8 billion

Italy

$319 million

$541 million

$2.0 billion

Germany

$559 million

$960 million

$3.6 billion

New Zealand

$29 million

$49 million

$184 million

Poland

$80 million

$135 million

$511 million

Austria

$64 million

$109 million

$411 million

Iceland

$2 million

$4 million

$14 million

Norway

$79 million

$134 million

$513 million

Methodology: We calculate the pledge/GDP ratios for the three benchmark countries as a proxy for their ambition. We then multiply each of the three ratios with the GDP of the countries in the first column on the left. So for instance if Austria would pledge $109 million, it would have the same pledge/GDP ratio as Germany, i.e. be as ambitious as Germany in relation to its (economic) size. We are using GDP values for 2013 from World Bank data, available here.

 

The table speaks for itself. If countries were at least as ambitous as Germany we could inch beyond the $10 billion threshold (though not quite the $15 billion one). The table also shows: the Swedish pledge is by far the most ambitious, and hardly any other country will be able to match it; in fact Sweden is so far ahead of other countries that the realities and constraints of other countries may not justify comparing them with Sweden – but it can help bringing in some modesty when countries will celebrate their own generosity next week. To be sure, *if* they’ll deserve so, we’ll join in.

Jan Kowalzig / Oxfam Germany