Decision on Green Climate Fund adopted
A major issue at Durban was the Green Climate Fund – the fund established at last year’s Cancun Conference to raise and disburse the targeted sum of $100 billion a year by 2020 to protect poor nations against climate impacts and assist them with low-carbon development. Meena Raman reports on the debate and decisions on the Fund.
ONE significant outcome of the Durban climate talks was the adoption on 11 December of a decision by the UNFCCC Conference of the Parties (COP) on the Green Climate Fund (GCF), thus clearing the way for further development of the fund that had been established at the Cancun conference a year ago.
The COP decision agreed to approve the governing instrument for the GCF as transmitted to it (although without consensus) by the Transitional Committee (TC) to design the Fund, without any changes to the instrument. However, the accompanying decision that agreed to the instrument contained several important points that clarified or elaborated further on the instrument as well as on transitional arrangements for the initial work and operation of the Fund.
Through its decision, the COP welcomed the report of the Transitional Committee (tasked to develop the instrument by the Cancun decision) and approved the governing instrument for the GCF, which was annexed to the decision.
In Durban, while some countries did not want a renegotiation of the governing instrument of the Fund, others wanted their concerns to be addressed. These concerns were addressed via the decision of the COP. Among the key points negotiated at Durban were the legal personality of the Fund, the role of national authorities in agreeing to activities financed by the Fund (including via the private sector), and the location of the transitional secretariat of the Fund.
The decision concerning the GCF was one of the outcomes of the so-called ‘Durban package’ and was the subject of intense negotiations, given that the report of the Transitional Committee, which included the governing instrument, was transmitted to the COP without consensus by the Chairs of the TC.
The United States and Saudi Arabia, as members of the TC, had withheld consensus on the adoption of the report in the final meeting of the TC in October, while several developing-country TC members had also expressed concerns over many parts of the GCF instrument.
At the plenary session of the COP on 30 November, the developing-country Group of 77 and China called for an open, transparent and inclusive process through a contact group to draft the decision necessary for the COP in relation to the GCF.
South African COP President, Maite Nkoana-Mashabane, proposed conducting informal consultations based on the report of the TC, which led to negotiations over the draft decision.
Parties through intense negotiations arrived at a near-consensus over the draft decision on 8 December, except over a key issue as to who is to host the interim secretariat of the GCF.
The options on the table were: (i) the UNFCCC secretariat, (ii) the Global Environment Facility secretariat (GEF), or (iii) the UN Office in Geneva.
The G77 and China rejected the GEF secretariat as an option, while developed countries were insisting otherwise.
Following intense wrangling, a compromise was reached at ministerial-level informal consultations on 10 December for the UNFCCC secretariat jointly with the GEF secretariat to take the necessary administrative steps to set up the interim secretariat of the GCF as an autonomous unit within the UNFCCC secretariat premises in Bonn.
Another issue that became the subject of much squabbling was the issue of how the GCF is to have legal personality and legal capacity. Parties managed to arrive at an agreement over this, which is reflected in paragraphs 11 and 12 of the decision (see box for the text of the decision).
A further issue of concern for many developing countries was the provision in the governing instrument in paragraph 46 that allowed the private sector to directly access the GCF funds without the need for their funding proposals to be approved by the national designated authorities.
Paragraph 46 of the governing instrument reads: ‘Recipient countries may designate a national authority. This national designated authority will recommend to the Board [of the GCF] funding proposals in the context of national climate strategies and plans, including through consultation processes. The national designated authorities will be consulted on other funding proposals for consideration prior to submission to the Fund to ensure consistency with national climate strategies and plans.’
Following negotiations in Durban, this concern was addressed with the following compromise in paragraph 7 of the decision which reads: ‘[The COP] requests the Board to develop a transparent no-objection procedure to be conducted through national designated authorities referred to in paragraph 46 of the governing instrument, in order to ensure consistency with national climate strategies and plans and a country driven approach and to provide for effective direct and indirect public and private sector financing by the Green Climate Fund. Further requests the Board to determine this procedure prior to approval of funding proposals by the Fund.’
*Third World Resurgence No. 255/256, November/December 2011, pp 40-42