Green Climate Fund (GCF)

Pledging conference in Berlin: an important first step for the Green Climate Fund (GCF)

Photo: Brot für die Welt

The pledging conference of the Green Climate Fund (GCF), which took place in Berlin on November 20th 2014, came up with $9.3 billion for the period of 2015-2018. With this result the unofficial mark of $10 billion was missed. Nevertheless the GCF can start funding urgently needed programmes for climate change mitigation and adaptation in developing countries. This is an encouraging start and important signal for the international climate negotiations beginning next week in Lima, Peru.

New and significant pledges were made by the UK ($1.1 billion) and Italy ($313 million). Norway also updated its amount to $130 million. Mongolia – as a developing country without financing obligations under the UNFCCC – pledged $50,000 joining the ranks of Mexico, Indonesia and Panama who announced contributions earlier this year. And even from the coalition of the unwilling, Canada pledged $265 million four days after the pledging conference while Australia, Austria, Belgium and Ireland are still dragging their feed. Russia, China or India have also not yet announced any financial support or didn’t even bother to show up at the conference at all.

Comparing the pledges to the Oxfam calculation of the fair share shows that the US, Germany and France are in the right order given their contributions to other international funds. The UK are even paying around $500 million more, while Sweden is far ahead of everyone else.

GCF Pledging Overview

Overview of the pledges to the GCF

And even if it does not quite add up to $10 billion: It looks like the GCF can take up its work next year. This should eliminate an important hurdle for successful negotiations in Lima and next year in Paris. It certainly needs more efforts for increasing international climate finance, but this is an encouraging first step. The result of the pledging conference brings us closer to reaching a new climate treaty in Paris in 2015, as sufficient and reliable climate finance is a precondition for developing countries participating in mitigating climate change and choosing transformative pathways.

The GCF is more than a political symbol. Everywhere in poor countries climate change already hits the population severely, flooding the fields, withering the plants and threatening the livelihood systems of the people. Supporting them in adapting to a changing climate is one of the key tasks of the new fund. Every Euro invested in adaptation today will save seven Euros of climate-induced damage in the future.

$9.3 billion may sound like a lot, but stretched over four years it is only $2.3 billion per year. This is just one third of the amount made available in the “Fast Start Finance” period. And it’s the details that count: On the positive side most of the money pledged comes as grants and not credits. Yet it is unclear when the officially confirmed $9.3 billion will turn into actual payments. And most of all, it is crucial that the projects and payments of the fund must not be tied to any conditions or be offset with any investment cooperation or credits which are already planned.

Germany has pledged €750 million as grants. Yet the German federal budget for 2015 is supposed to include only €18 million for the GCF. Therefore it is vital for the German government to come up with a plan on how to reach its share for the $100 billion by 2020. The G7 summit under German presidency is a good opportunity to push for such a plan from the largest industrialized countries.

Christine Lottje