Green Climate Fund (GCF) / International climate finance

Climate Summit in New York: Small steps for climate finance – but a long way to go for replenishing the Green Climate Fund

In the streets of New York, photo: Sönke Kreft

More than 40 years ago Frank Sinatra sang “New York, New York”. At the invitation of Ban Ki-moon, heads of state assembled there last week for the biggest climate summit ever.

Start spreadin’ the news, I’m leavin’ today
I want to be a part of it…

It all started with a big bang. More than 400,000 people came together on Sunday around Central Park for the People’s Climate March, to demonstrate in support of more ambitious climate change policies. Thousands more in Adelaide, Melbourne, Delhi, Berlin and London brought climate justice and political support for renewables&Co. into the news – a positive start for the gathering of heads of states two days later!

I want to wake up, in a city that never sleeps…

The expectations for the summit were clear. One of the aims was to mobilize additional climate protection measures from states, industry and initiatives. For climate finance in particular – the Green Climate Fund (GCF) needs to be replenished with sufficient funds by the end of the year – industrialized countries were under pressure to put new commitments on the table. In addition, it was important to gain commitment at the highest political level to the national processes which are vital for the Paris climate summit (nationally-determined commitments need to be presented by March 2015 at the latest!) and to get countries to publicly support the goal of switching their energy systems to renewables and to phase out coal.

I’ll make a brand new start of it…

German NGOs had somewhat lesser expectations for the summit. Chancellor Merkel had cancelled her attendance early on and preferred to meet with the Federation of German Industries in Berlin. India was also not represented, nor were several other countries including Canada, Australia and Saudi Arabia.

Still: all in all, the summit ensured that heads of state are still dedicated to combating climate change and are participating in the intermediate steps on the way to Paris. This cannot be taken for granted in times when Ukraine, ISIS and Syria are dominating the news. But for Paris, the important thing is action!

If I can make it there, I’ll make it anywhere…

Bisherige GCF-ZusagenWhat then, was achieved at the summit? Most announcements were not new. Nevertheless, the narrative of reducing country emissions to close to zero by 2050 and switching energy supplies entirely to renewable energies has gained momentum through signals from Colombia, Costa Rica, Chile, Mexico, Sweden, Tuvalu and other small island states. In addition, there were several commitments for climate finance. For the Green Climate Fund (GCF) around 2.3 billion USD was pledged, starting with Germany’s commitment of 750 million Euro. France has pledged 1 billion USD – however, it is unclear how large the actual share of grants will be. Other countries like Switzerland (100 million USD), South Korea (100 million USD), Norway (at least 33 million USD), Mexico (10 million (USD) and the Czech Republic (6 million USD) also made announcements. Other countries merely indicated their willingness to contribute and withheld concrete commitments before the next GCF Board Meeting in Barbados in October. Great Britain, the US and Japan have to date made only very general to no statements at all regarding funding commitments. Even when combined, there is still a long way to go for the GCF before reaching the 15 billion USD demanded by developing countries or even the intermediate step of 10 billion USD.

Announcements from initiatives by the private sector, multilateral organisations and individual countries were given a large space at the summit. Ban Ki-moon’s press release states that more than 200 billion USD was mobilized by the summit. Whilst this is clearly an imaginary number, there are still some important initiatives which have gained a lot of attention. This includes the World Bank’s carbon pricing initiative (for corporations internally as well as corporations as a political voice) and the Divest-Invest Global Movement Campaign. Not all private sector initiatives, however, can be judged positively, as illustrated by a recent analysis by Oxfam. Some (like the Global Alliance for Climate-Smart Agriculture) have earned the well-deserved public critique. Others (e.g. in the area of forest conservation) need to be critically examined in much more detail. Some of the “Action Statements” of the summit show heavy “greenwashing” tendencies and carry the clear signature of inadequate influence of corporate interests.

In the speech by Environment Minister Hendricks, Germany announced that it will cease the provision of funding for new coal-fired power plants through the German development bank KfW. The snag: this announcement only includes funding through development cooperation. The more important export credits remain as untouched as the core business of KfW.

It’s up to you, New York, New York!

What’s next? Through the People’s Climate March, the strong participation of many heads of states and the signals in the speeches the probability of reaching a new climate agreement in Paris has increased. But how far will this take us towards reaching the 2° target and to raising the necessary support for climate change mitigation and adaptation in developing countries? Germany also needs to do its homework – this includes a German climate action programme (indicated by Hendricks in New York) in November; the European climate, renewables and efficiency target by the end of October; and getting the European emissions trading system out of its current crisis. Internationally, Germany can also use its G7 presidency to push for more ambitious climate policy.

For international climate finance the path to Lima is rough. Next steps are the GCF Board Meeting in October, followed by the donor conference in November. It is there that countries like Great Britain, the US and Japan need to make a move.

Sönke Kreft / Germanwatch