Green Climate Fund: pledges do not meet expectations

In Vanuatu unterstützt der GCF die Stärkung der Resilienz der Menschen an den Küsten und den Aufbau von Frühwarnsystemen zum Schutz vor schweren Stürmen. Photo © Save the Children Australia

After the replenishment conference for the Green Climate Fund, the most important multilateral climate fund has secured around $9.3 billion in new pledges for the 2024-2027 funding period. It should have been twice as much; several countries, including the US, Switzerland and Italy, travelled to Bonn empty-handed.

The Green Climate Fund (GCF) is the largest multilateral climate fund and thus an important component of the international climate finance architecture. More than 200 projects in over 140 countries have been or are being supported by the fund.

Currently, the second replenishment round (GCF-2, after a first formal replenishment in 2019 and an initial replenishment in 2014/15) is underway. It has now culminated in last week’s replenishment conference in Bonn. Ten more countries announced new pledges for the 2024-2027 funding period, so that there are now pledges from 25 countries.

Fig. 1: New pledges to the Green Climate Fund

Commitments for the second formal replenishment round. At $9.3 billion, the level of the previous pledging round was not reached. Graphic © Oxfam

Those 25 pledges add up to around 9.3 billion US dollars, not even matching the result of the last pledging round in 2019 that resulted in 9.9 billion US dollars. Given the worsening climate crisis and in light of the growing need for support in low-income countries, this is a disappointment. An adequate replenishment should have achieved at least double the amount reached for now.

USA, Switzerland and Italy came empty-handed

Particularly annoying: Several countries, above all the US, but also Italy, Switzerland, Sweden or Australia, arrived empty-handed and/or with only vague statements. The pledges of Norway (just over 3.2 billion kroner) or Finland (60 million euros) are lower than what these countries had given in the last round, and those of several other countries (including France and Japan) do not represent increases.

The largest pledge for the second replenishment comes from Germany – at 2 billion euros. However, if pledges are compared in relation to a country’s gross national income (GNI), countries such as Luxembourg, France or Denmark are more ambitious, with Germany only coming in 6th place (see Table 1).

Challenges for the Green Climate Fund

The GCF is one of the central vehicles for supporting low-income countries in implementing the UN Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. It fulfills this role not only through the projects it supports but can also strengthen it through its influence on its partners and accredited institutions, for example, by pushing banks accredited to the GCF to end fossil fuel investments in their portfolios. Improvements can also be made in the funding modalities to strengthen projects with particularly transformative potential. A key task for the future will remain to ensure that, as agreed, half of the GCF funds are used to support adaptation, making these funds available in particular to vulnerable countries.

That entities accredited to the fund, can directly access its resources remains one of the important features of the Fund. However, the challenge remains to strengthen access to resources for local communities and affected populations, and to pursue participatory, rights-based, and gender-responsive approaches in funded programs, also ensuring that funds actually reach where they are needed most.

Next stop: COP28

The mediocre overall result of the replenishment so far could complicate negotiations at the upcoming UN climate conference COP28 in Dubai at the end of the year because ambition, cooperation and mutual trust are the most important currencies for successful climate talks. This includes rich countries also adequately fulfilling their responsibility to support low-income countries. The replenishment of the Green Climate Fund at Bonn does constitute a step in this direction, but it should have been much more ambitious. Developed countries can certainly not rest on their laurels, especially since they have also come under a lot of criticism for unfulfilled climate financing promises in the past.

Countries that have not yet made a pledge to the GCF must now prepare ambitious pledges in the coming weeks and then announce them at COP28 in Dubai at the end of the year. Also, countries with a rather weak showing in Bonn, should take the opportunity to improve on their pledges. Let’s hope that COP28 will bring more ambition to the next funding period for the GCF.

Jan Kowalzig, Oxfam