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Photo: GCFAdvocating before the Green Climate Fund
The Green Climate Fund is the world's leading multilateral climate finance institution. As such, it has a key role in channelling economic resources from developed to developing nations for projects focused on mitigation and adaptation in the face of the climate crisis.
Created in 2010, within the framework of the United Nations, the fund supports a broad range of projects ranging from renewable energy and low-emissions transportation projects to the relocation of communities affected by rising seas and support to small farmers affected by drought. The assistance it provides is vital so that individuals and communities in Latin America, and other vulnerable regions, can mitigate greenhouse gas emissions and address the increasingly devastating impacts of global warming.
Climate finance provided by the Green Climate Fund is critical to ensure the transformation of current economic and energy systems towards the resilient, low-emission systems that the planet urgently needs. To enable a just transition, it’s critical to follow-up on and monitor its operations, ensuring that the Fund effectively fulfills its role and benefits the people and communities most vulnerable to climate change.
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Read our recent report "Leading participatory monitoring processes through a gender justice lens for Green Climate Fund financed projects" here.
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Climate finance: Questions and answers
The climate crisis knows no borders. It impacts people, ecosystems and species around the world. Addressing this global crisis requires profound and innovative transformations in all facets of human life: the production of energy, food and other goods; the design and construction of infrastructure; the use and management of terrestrial, marine and freshwater habitats; the transport of people and products; and more. These systemic changes demand financial resources and sound investments. This is why we hear time and again that addressing the climate crisis is costly and requires financing. Climate finance is a complicated topic, and so we offer you a glimpse of the basics. What do we mean by climate finance? The United Nations Framework Convention on Climate Change (UNFCCC) describes climate finance as the type of local, national or transnational finance used to support and implement climate change mitigation and adaptation actions with financial resources from public, private and alternative sources. These resources are defined as "new and additional" and cannot include those previously committed, for example, for official development assistance. To better understand this definition, we can point out that climate finance is captured and used to reduce greenhouse gas (GHG) emissions and enhance carbon sinks, or seeks to reduce vulnerability, as well as to maintain and increase the resilience of human and ecological systems to the negative effects of the climate crisis. Why is climate finance important? To echo UN Climate Change Executive Secretary Simon Stiell's message at the Sustainable Investment Forum, "We cannot achieve our climate goals without finance. Whether we are talking about transitioning to renewable energy, improving energy efficiency or protecting vulnerable communities from the effects of climate change, all of these efforts require significant investment." Climate finance impacts everything from national policies to changes occurring at the local level that make a concrete difference in people's lives. "Climate finance is ultimately about what we as societies value: the world we want to live in and the lives and hardships we can save by channeling our money into building resilience to the ravages of climate change," Stiell said in his speech. Financing by and for whom? The impacts of the climate crisis are inversely proportional to the weight of responsibility, in that the countries historically responsible for the highest levels of GHG emissions are often the least affected. This is why the UNFCCC advocates that developed countries, those with the most economic resources, should financially assist the least developed and most vulnerable countries. This is what the principle of "common but differentiated responsibilities and respective capabilities" established in the Convention is all about. On the other hand, the Paris Agreement—a legally binding international treaty in force since November 2016—reaffirms the obligation of developed countries in addition to promoting, for the first time, voluntary contributions from other States. It further provides that developed countries should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments and channels, taking into account the important role of public funds, as well as the needs and priorities of developing countries. It’s key to note that this mobilization of finance should represent a progression from previous efforts. What climate finance mechanisms exist? Under the UNFCCC, there are three main mechanisms for climate finance to reach nations, created for different purposes and with different scopes: Global Environment Facility (GEF): Grants financial resources to developing countries or countries with economies in transition to meet the objectives of international environmental conventions and agreements. It also manages the Special Climate Change Fund and the Least Developed Countries Fund. Adaptation Fund: Created as a financial instrument for adaptation and resilience in those countries that are part of the Kyoto Protocol. Green Climate Fund (GCF): Created with the objective of financing mitigation and adaptation programs and projects aimed at low-emission and climate-resilient development. It is the main multilateral climate finance entity worldwide. How much financing do we need? In the framework of the UN climate negotiations in 2009, developed countries committed to transfer $100 billion per year to developing countries by 2020 (target extended to 2025 in the Paris Agreement). But this amount has not been achieved. For example, in 2016 they only reached $58.5 billion and, although the amount increased significantly for 2019, they only reached $79.6 billion. In that sense, to meet the goal of net zero emissions by 2050, the Climate Policy Initiative organization estimates that global financing of $4.35 trillion is needed by 2030 (when the 2020 estimate was only $632 billion dollars). What are the main challenges of climate finance today? The main challenge, as we have seen, is the need for a substantial increase in the flow of finance. Another key challenge is to measure and track this type of finance, which is not subject to a common universal definition. Along the same lines, given that developed countries’ commitment to the UN does not include official guidelines on what activities count as climate finance, it’s difficult to ensure that money is not double-counted or that it goes to efforts that will actually help reduce global warming and its impacts. There is also the need to balance the allocation of funds more equitably between mitigation and adaptation activities, as well as those related to loss and damage already suffered by communities around the world. In 2020, 90 percent of global funding went to mitigation, while only 7 percent to adaptation projects and 3 percent to dual activities. On the other hand, it’s important that the financing channeled does not result in human or environmental impacts, as often happens when there are large investments in which adequate consultation and participation processes are not implemented. An energy project, however renewable and clean it may be, can accentuate inequalities and vulnerabilities if it is poorly planned or if it is designed without the participation of local communities. Finally, it should be considered that, although a lot of money is allocated to address the climate crisis, at the same time, businesses that promote dependence on fossil fuels, and that keep us in a predatory and unjust economic system that perpetuates extractivism as a mode of development, continue to increase around the world. This, of course, counteracts the progress we can make in favor of the environment and communities. What is clear is that a specific annual amount of climate finance is not enough; what we really need at this point is that all the money mobilized contributes to the regeneration of the planet and to resolving the environmental and climate crisis, not exacerbating it. At AIDA we monitor the climate finance coming to the region because we understand how important it is to increase the possibilities of building a future where we can live well and in harmony with the environment. We also understand that the problems often caused by poorly designed financing are due to a lack of connection between the territories that suffer the impacts of the climate crisis, and the decision-making spaces where projects are proposed to overcome them. In this sense, AIDA seeks to build a bridge between these two worlds, motivating organizations in the region to be active, to follow up on projects and to participate in decisions. Only in this way can we ensure that scarce climate funds not only exist, but also reach their full potential towards the paradigm shift we all need. Join the "Observatory of the Green Climate Fund for Latin America and the Caribbean", a joint effort to better monitor the world's largest climate fund.
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A Guide for GCF Watch Coordinators
A publication for coordinators of GCF Watch, a civil society initiative from the global South aimed at improving monitoring of the Green Climate Fund (GCF), the world's leading multilateral climate finance institution. DOWNLOAD THE FULL GUIDEBasics of the Green Climate Fund (GCF)The Green Climate Fund (GCF) is the operating entity of the funding mechanism of the United Nations Framework Convention on Climate Change (UNFCCC). As such, it provides funding to developing countries for climate change mitigation and adaptation projects and programs.Read and downloadNational Designated Authorities and Green Climate Fund Focal PointsNational Designated Authorities (NDAs), Government institutions, and Focal Points (FPs) are responsible for all matters related to the Green Climate Fund (GCF) in developing countries. They represent the GCF and serve as a liaison or point of contact between the GCF and developing countries. Read and downloadFunding Proposals before the Green Climate FundProposals for project and program funding can be classified according to several criteria: type of access, public or private, amount of funds requested, and risk category.Read and downloadGuide to Reviewing a Funding Proposal before the Green Climate FundThe GCF Watch will consolidate all observations made by civil society before sending to the GCF Board. Your comments will be part of the message directly delivered to the Board!Read and downloadAccredited Entities before the Green Climate FundThe funding granted by the Green Climate Fund (GCF) is channeled through accredited entities (AEs), which are in charge of managing the resources and implementing the projects and programs. The AEs must ensure that projects and programs comply with GCF safeguards, as well as oversee compliance when implementation is the responsibility of executing entities.Read and downloadThe Independent Redress Mechanism (IRM)The Independent Redress Mechanism (IRM) was created to respond to complaints from individuals, groups or communities who feel that they have been adversely affected by projects or programs financed by the Green Climate Fund (GCF) due to non-compliance with its operational policies and procedures, including its environmental and social safeguards.Read and downloadGCF Watch: A Southern Civil Society-Led InitiativeThe platform aims to improve the monitoring of the operations of the GCF through collaboration between organizations working at the level of the GCF Board and organizations and communities in the region that are close to the territories where projects supported by the entity are implemented.Read and downloadGlossary of useful terms for monitoring the Green Climate FundRead and download
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The IPCC climate report: science has spoken and we must act now
The international scientific community has spoken: the only thing that can save us from a climate catastrophe is a radical and immediate change. The next 11 years are the most important in the history of the planet, in terms of climate change. Our response to their message will determine our future. In its most recent analysis, the Intergovernmental Panel on Climate Change (IPCC) of the United Nations establishes the impacts that could occur if the planet’s average temperature increases by more than 2°C, and compares those with what would happen if we stop warming, or at least keep it below 1.5°C. The 2016 Paris Agreement, an international accord to curb climate change, aims to keep warming well below 2°C with respect to pre-industrial levels, and to continue global efforts to limit it to 1.5°C. The impacts of global warming The IPCC experts’ conclusions are piercing. Those extra 0.5°C would be lethal for millions of people and their ways of life. If the Earth warms 2°C or more, we would experience: more frequent and intense heat waves, droughts and floods; sea level rise of an extra 10 centimeters, implying coastal flooding and filtration of salt water into agricultural areas and freshwater sources—a matter of life and death for roughly 10 million people; double the risk of habitat loss for plants and vertebrates, and triple the risk for insects, considering more than 100 thousand species which were studied; the disappearance of more than 99% of coral reefs, while 10 to 30 percent of what remains could be saved if we were to stabilize the planet’s temperature below 1.5°C; an increase in the range of mosquitoes that transmit diseases such as malaria and dengue; and the devastation of crops and livestock, severely affecting global food security. So, how are we doing now? Not so well. The planet has already warmed 1°C since preindustrial times, and in 2017 the emissions responsible for warming increased again. The commitments nations made to comply with the Paris Agreement are insufficient. Settling on that level of ambition would take us to 3°C warming by 2030, a reality with unimaginable consequences. Changing our climate destiny Let’s talk about solutions. Ensuring that the planet’s warming doesn’t exceed 1.5°C is possible, but it will require unprecedented action. Emissions must lower by 45 percent between 2010 and 2030, and we must achieve carbon neutrality by 2050. That means not emitting more than what the world’s forests and natural carbon sinks can absorb. This will require that: the most polluting industries, particularly those producing fossil fuels, implement radical changes; renewable energy is the norm by 2050, accounting for between 70 and 85 percent of total energy production; coal-fired power plants disappear; transportation runs with clean, renewable electricity; and we expand, maintain, and care for forests and other natural carbon sinks, which are responsible for removing emissions from the atmosphere. The IPCC report also recognizes a monumental opportunity: the mitigation of short-lived climate pollutants (SLCPs)—including black carbon or soot, methane, hydrofluorocarbons and tropospheric ozone. More climatically intense than carbon dioxide, SLCPs are responsible for half of global warming. Because of their short duration in the atmosphere, they could play a key role in reducing warming in the short term. In addition, the reduction of SLCPs brings important benefits for human well-being, including the reduction of pollution that affects public health and better yield of crops. But few countries have included the reduction of short-lived climate pollutants in their national commitments on climate change. At AIDA we’re working so that Latin American nations advance in the control of these emissions. As the region with the greatest potential for renewable energies, Latin America has the opportunity to be an example for the rest of the planet. The threats facing the region are great and avoiding them is well worth the effort. Climate change threatens to shake us from our very roots—melting Andean glaciers, increasing droughts and floods, diminishing freshwater supplies, driving species to extinction, increasing wildfires, favoring the spread of invasive species, losing corals and marine biodiversity, affecting food security, and wreaking havoc on people’s health and livelihoods. The outlook is clear: maintaining global warming below 1.5°C is not an easy task, but science holds it’s possible. We have the scientific knowledge, and the technological and financial capacity to achieve this goal. The responsibility now lies with governments, decision-makers and the private sector—together they must drive unprecedented changes. We must remember that implementing these changes is not just possible, it’s desirable. A world with fewer emissions is a cleaner and a fairer world for us and for future generations. What’s not to like?
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