The United Nations Framework Convention on Climate Change (UNFCCC) provides the structure for multilateral action to prevent significant human change to the climate system. Dealing with climate change and its impacts on humanity and ecosystems requires a continuous international negotiation process which comes from collective decisions by the Conference of the Parties (COP), the Kyoto Protocol and the Paris Agreement. (“Climate Get the Big Picture”).
Climate finance is the management of all funds raised and distributed for reducing emissions, adapting to adverse effects, and reducing the impacts of climate change. Expanding more resilient agricultural practices, improving food security, increasing energy efficiency, and preventing land degradation (and many more actions) are made possible by the provision of climate funds particularly in least developed and developing countries at high vulnerability. Countries with more financial resources are required to raise funds for developing those that have fewer financial resources and are more vulnerable. Developed countries share the responsibility of leading efforts to raise climate funds from public and private sources on a variety of scales (local, national, transnational). Climate finance is critical for mitigating and adapting to climate change worldwide due to the need for huge investments (“Climate Get the Big Picture”).
In 2010, developed country parties committed to jointly raising 100 billion USD per year by 2020 for developing countries’ needs. In the future (before 2025), the COP will set new mobilization commitments starting at 100 billion USD per year. To organize and manage climate finance the UNFCCC established the Global Environment Facility (GEF) and the Green Climate Fund (GCF) as “operating entities of the financial mechanism”, meaning that they will manage the provision of climate finance. Both organizations are responsible for managing the flow of all funds for climate action projects (“Climate Get the Big Picture”).
Deeper Dive: Green Climate Fund
The 2010 Green Climate Fund is one of the funds set up by the parties of the UNFCCC (others include Special Climate Change Fund, Least Developed Countries Fund, and Adaptation Fund) and has the central goals of streamlining and boosting climate financial investments for developing countries. The fund focuses on “low-emission and climate resilient development” while striving to match mitigation and adaptation funding amounts. GCF aims to encourage private finance by using public investment in the form of grants, loans, equity or guarantees (“About the Fund”). To progress towards these goals, the GCF aims to prioritize scalability, replicability, country programming, and meeting full investment pledge amounts (“Strategic Plan”).
One major criticism of the GCF is its ability to allocate matching funds to mitigation and adaptation for developing countries’ needs (ICCCAD). This issue raises the question of how to enforce a 50/50 ratio in funding and provisions. The main concern is that more vulnerable countries have a greater need for adaptation projects than mitigation projects. To learn about the status of the fund today click here.
In this video you can learn more about what the green climate fund is and how it works.
“About the Fund.” Green Climate Fund. Green Climate Fund, n.d. Web. 29 Aug. 2017.
“Climate Get the Big Picture.” UNFCCC. United Nations Framework Convention on Climate Change,n.d. Web. 29 Aug. 2017.
International Centre for Climate Change and Development (ICCCAD). “Understanding Climate Finance after COP21.” Online video clip. YouTube. YouTube, 27 Apr. 2016. Web. 29 Aug. 2017.
“Strategic Plan.” Green Climate Fund. Green Climate Fund, n.d. Web. 29 Aug. 2017.