October 14, 2012

Part 6: Where is the Money?


In the previous post, we discussed how the Global Environment Facility (GEF) works. In this post, we will look at the special Funds which have been established to address the effects of climate change, with some of them being managed by the GEF; this post will also be fairly short. The Funds we are going to discuss are:

·      Special Climate Change Fund (SCCF)
·      Least Developed Countries Fund (LDCF)
·      Adaptation Fund
·      Green Climate Fund (GCF)

1.    Special Climate Change Fund (SCCF)

The Climate Change Convention established the SCCF in 2001, and its main task was to finance projects relating to adaptation, industry, agriculture, forestry, waste management, technology transfer and capacity building, energy, economic diversification and transport. 

This was quite an extensive mandate, and the GEF was tasked with managing this Fund. For a start, the GEF Council established a programming document that actually laid out the operational basis for funding under the SCCF. During COP17 in Durban, South Africa, the GEF was tasked with clarifying the concept of additional funds to the SCCF, as well as to raise awareness on the need for donor countries to provide adequate resources to make this Fund functional, especially in supporting projects initiated by country Parties.

2.    Least Developed Countries Fund (LDCF)

This Fund is also managed by the GEF, and this mandate was provided for in COP7. The main aim of establishing this Fund was to assist least developed countries to implement their National Adaptation Programmes of Action (NAPA).  Thereafter, at COP11, the provisions that would see the full-cost funding and co-financing if this Fund were agreed upon by Parties.

At COP17, the GEF was directed to make clear project baselines as well as how Parties can prepare applications for funding for the NAPAs. But then, it is important to note that there were other elements in the LDC work programme other than NAPAs. In this regard, the Least Developed Countries Expert Group (LEG) was given the task of specifying these aspects of this Fund to the  COP; this would in turn enable the COP to advice the GEF on how to proceed.

During COP18 in Doha, Qatar, UN agencies, GEF and other international organizations will have the opportunity to provide information on how they can establish further support for the other LDC work programme elements, apart from NAPA.

3.    Adaptation Fund

The Adaptation Fund was established to finance concrete projects of developing countries which are Parties to the Kyoto Protocol, and which are most vulnerable to climate change. A share of Clean Development Mechanism (CDM) proceeds finances this Fund, as well as finances from other sources. The Adaptation Fund Board (AFB) manages and supervises this Fund.  Thie AFB meets at least twice a year, and it has 16 members.

The World Bank is the trustee of the Adaptation Fund, but this is on an interim basis. Parties invited the GEF to provide secretariat services to the Adaptation Fund Board, also on an interim basis.  In 2011, a review on the aforementioned interim arrangements began, and the AFB finally submitted it to COP17.

The Subsidiary Body for Implementation (SBI) provides advice to the COP on all matters; thus, the SBI was tasked with coming up with a draft decision that would be presented to COP18 for adoption.

4.    Green Climate Fund (GCF)

The GCF was established during COP16 in Cancun, Mexico, as an operating entity of the financial mechanism. The Global Climate Fund Board was appointed to govern this Fund. The main aim of establishing the GCF was to support projects, programmes, policies and other activities in developing country Parties.

The World Bank was also appointed as the interim trustee of the Global Climate Fund.  This arrangement was however subject to review three years after the operationalization of the Green Climate Fund.

A Transitional Committee (TC) was also formed at COP16 and given the mandate of designing the Green Climate Fund. The membership of this committee is drawn from 40 members (15 from developed countries and 25 from developing countries). At COP17 in Durban, South Africa, the TC had come up with a governing instrument for GCF; the COP then adopted it.  The UNFCCC secretariat and the GEF secretariat were also required to set up an interim secretariat until an independent secretariat of the GCF is established.

At COP18 in Doha, Qatar, the arrangements between the COP and GCF will be finalized so that there is greater transparency and accountability on the activities of the latter; also, the COP is tasked with providing guidance to the GCF Board. The host country of the GCF will be decided at COP18, as well as the GCF Board Members.

Tasks of the GCF Board:

·      To expedite the operationalization of the GCF
·      To select the trustee of the GCF through a transparent and competitive bidding process
·      To provide annual reports of its activities to the COP

Conclusion

This marks the end of this post, although it is laden with plenty of details; but then, it is prudent that you understand how these Funds work so that you can wrap your head around the politics involved in running them. The next post will delve into the structure of the COP so that you will have a thorough understanding of its inner workings. See you then!


PS: As usual, if you are interested in contributing to this COP series, please send an email to mbevakl@gmail.com and I will be glad to have you on board!

Useful links used in this research:
  1. Special Climate Change Fund: http://unfccc.int/cooperation_and_support/financial_mechanism/special_climate_change_fund/items/3657.php
  2. Green Climate Fund: http://unfccc.int/cooperation_and_support/financial_mechanism/green_climate_fund/items/5869.php
  3. Least Developed Countries Fund: http://unfccc.int/cooperation_support/least_developed_countries_portal/ldc_fund/items/4723.php
  4. Adaptation Fund: http://unfccc.int/cooperation_and_support/financial_mechanism/adaptation_fund/items/3659.php

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