TWN Info Service
on Climate Change (Sept11/06)
Divergences emerge on design of Green Climate Fund
Geneva, 14 Sept (Meena Raman) - Views from members of the Transitional Committee (TC) to design the Green Climate Fund (GCF) under the United Nations Framework Convention on Climate Change (UNFCCC) who met in Geneva from the 11-13 September, revealed clear disagreements on critical aspects of the elements for the design of the Fund.
There was divergence of views on elements such as the objectives, guiding principles, governance and institutional arrangements, legal status and engagement of the private sector.
The Co-chairs, Vice-chairs and Co-facilitators (of four work-streams) presented a document on the final day of the meeting on September 13, which contained their “reflections”, “based on the work done in previous sessions, discussions held and submissions presented”.
The document states that “it reflects areas that would be included in the final outcome of the TC and, to the extent possible, provides guidance on the content without prejudice to the specific language, placement or final format. It is expected that this document be complemented by the TC members, through further discussions and interactions, and serves to facilitate the preparation of the draft report that would be considered” at the next TC meeting in Cape Town to be held on 16-17 October 2011.
The main headings of the elements in the document are: objectives, guiding principles, scope, governance and institutional arrangements, legal status, participation/membership, financial instruments, operational modalities, engagement of the private sector, environmental and social safeguards, monitoring and evaluation, accountability mechanism and stakeholder input and participation.
Mr. Gilbert Metcalf
Metcalf said that the “reflections” document did not reflect a consensus or convergence. He said that there were many issues that were not discussed. Rioux said that he could not agree to a “standalone instrument” and that he could not agree to the “package” and “had strong reservations”.
Among the elements that drew much reaction from developing countries was reference to “transformational change” in several parts of the elements including the objectives, guiding principles, and funding windows.
Mr. Wu Jinkang of
Mr. Jorge Ferrer of
On the “guiding principles”, some members had concerns over the term “results-based approaches”. Serra of Brazil said that “results-based approaches” should not be a principle as this could hinder access to funds, especially for adaptation and it was better for this to be reflected under “monitoring and evaluation”. Muller of Philippines also expressed similar concerns, adding that several aspects of the “guiding principles” appeared to be conditionalities.
In relation to the “scope” which had a reference to “mobilizing and leveraging of private sector investment and other finance, especially domestic private sector”, Wu of China questioned what “other finance” was and whether the reference “to domestic private sector” meant that the private sector in developing countries are expected to make contributions to the GCF. Serra of Brazil said that there was no mention at all under the scope to “public funds” and this was “an obvious imbalance.”
On the “engagement of the private sector,” the document provided three elements which were: the “GCF to engage the private sector through a private sector facility; advisory committee of private sector actors and non-voting members of the Board”. These proposals were mainly advanced by developed country members of the TC.
Mr. Ahmad Abdulkader
Ferrer of Nicaragua
said that the
Wu of China had similar
views, saying that the
Mueller of Philippines said that the engagement of the private sector should be considered under the element of “stakeholder input and participation” along with civil society.
countries including the
In contrast to the
views of developing countries, Metcalf of the
Another problem issue was the “relationship of the COP” to the GCF, which is addressed under “governance and institutional arrangements”.
Mueller of Philippines was of the view that this element was the “weakest part of document.” She said that the GCF must be guided by and be accountable to COP and this means a “strong relationship and touches upon the activities of the GCF”. “Ensuring accountability is not simply about reporting by the GCF to the COP and there was need to address this.”
were expressed by Wu of China who said that the Board of the GCF was
accountable to the COP and the Board therefore must have clear obligations
in relation to its role and functions in decision-making. El-Arini of
While developing countries
stressed the need for a strong relationship between the GCF and its
Board with the COP, Metcalf of US expressed concerns. In his earlier
intervention during the meeting on this issue, Metcalf said that the
COP should have no role in choosing the members of the Board, on issues
related to the trustee or in the hiring of the head of the secretariat.
The accountability mechanism is for the Board to report to the COP as
is the case with the Global Environment Facility. This view was supported
by several other developed countries including
In relation to the legal status of the GCF, the document refers to two elements: the GCF to be endowed with legal status and form of legal identity to be based on specific functions of the GCF. It states that the form of the legal status of the GCF should be discussed.
Most developing country members of the TC want the GCF to be endowed with legal status, while many developed countries including the US, UK and France want its “form to follow function,” and not decide the issue at this stage.
In his reactions to the document, Reddy of India drew attention to the proposals from several developing countries to follow the model of the Multilateral Fund of the Montreal Protocol and said that this should be flagged as an option.
(See TWN Info Service on Climate Change (Sept11/04), 13 September)
Another area of contention related to the issue of “financial instruments”. The document has two elements in this regard: the GCF to provide grants, non-grant instruments, including concessional loans, guarantees and others; and results-based financing mechanisms, including payment for verified results.
Serra of Brazil said
that there was convergence among members that grants would be the most
important instrument and suggested that the GCF should provide mainly
grants. Reddy of
Given the lack of convergence on key issues relating to the design of the GCF, there are concerns among some developing country members as to how the drafting of the final report by the Co-chairs, Vice-chairs and Co-facilitators is going to reflect a balanced outcome for the consideration of the members at their final two-day meeting in Cape Town in October.