5 facts about the group funding climate action in poor countries
Cattle ranching, gold mining, industrial agriculture – when you think of the primary forces threatening the Amazon rainforest, these big companies rightly come to mind because of the deforestation and pollution they cause.
But not all economic activities harm the Amazon. At the other end of the spectrum, indigenous communities in six countries are engaging in what is now called bio-business, an approach that makes biodiversity a central indicator of success.
In other words, if the surrounding wildlife thrives, then the business in question is doing a good job. This emphasis on ecological well-being has helped restore degraded landscapes, while generating income for communities who act as sovereign stewards of the forest.
Many of these bio-businesses now receive funding from the Green Climate Fund, the world’s leading climate finance group, as well as its partner, the Inter-American Development Bank, which together have committed $ 600 million to “l sustainable agroforestry, native palms cultivation, natural non-timber forest products, timber cultivation of native species, aquaculture and community-led natural tourism.
The Green Climate Fund, or GCF, is a multilateral organization that works tirelessly to help countries mitigate the causes of climate change and adapt to the environmental, economic and social impacts already present.
The GCF was formally established at the 2010 United Nations Climate Conference (COP15), but has moved up a gear following the Paris climate agreement in 2015. As rich countries released the majority of the pollution causing climate change, it was decided that, as a matter of justice, they would raise $ 100 billion a year to fund climate action in the poorest countries. GCF was then tasked with mobilizing, overseeing and directing some of this funding to projects around the world.
Since its inception, the GCF has committed $ 10 billion to 190 projects, mainly in the Asia-Pacific, Africa, Latin America and the Caribbean regions. In 2021, the group launched 13 new projects.
While multilateral institutions have a reputation for being opaque, the GCF prides itself on its transparency and accountability. On their website, you can find out how they get funding, where all their money goes, how decisions are made, and details about their more than 200 partners. You can even access transcripts of board meetings. But that doesn’t mean the average person is going to become a scholar in every detail of the organization.
So, to save you time, here are five essential things to know about the Green Climate Fund.
1. A country-led process
The history of international development has its share of missteps, nefarious interventions and power imbalances. Because the GCF does not want to add to this unfortunate legacy, it only funds projects that support a country’s broader climate goals.
The GCF achieves this through a rigorous project analysis process and equitable contribution from countries. Its board of directors is divided equally between developing and developed countries in order to reduce the influence of economic and political powers that often dominate similar forums. All projects must either reach a broad consensus or receive the support of 80% of the members before being approved. The board’s ongoing negotiation process – streamed live for everyone to see – has helped build trust among members and prevent geopolitical feuds from creating dysfunction, according to Climate Change News.
This process has enabled developing countries to come up with projects that have clearly articulated objectives and principles of climate justice.
For example, the board recently approved $ 33 million in grants for a project in Thailand that will protect farmers from increasing flooding and also help them better manage dwindling water supplies. As the investments materialize, up to 25 million people living in the Grand Chao Phraya basin could see their food and water security and their livelihoods improve.
Another $ 268 million in grants and loans has recently been committed to help dry corridor communities in Central America and the Dominican Republic. Declining rainfall and increasing temperatures have made it more difficult for farmers to maintain their livelihoods in the region and have contributed to increased levels of poverty and migration. The funds will help communities in seven countries preserve water supplies and adapt to climate change.
2. A holistic approach to climate finance
Climate change does not exist in a vacuum. It affects all aspects of life, from the food we eat and the air we breathe, to the racial and gender dynamics of a society and the way in which communities earn income. Likewise, all forms of climate action have effects that go beyond their immediate objective. If a coal mine is closed, for example, the surrounding wildlife will benefit immediately, but the community that depended on the income from the coal mine will need financial support to transition to a new economy, otherwise they might have difficulty. . This is the general idea behind a “just transition” and it is something GCF strives to achieve.
The organization begins by prioritizing projects in the poorest countries in the world and the most vulnerable to climate change. By focusing here, the group aims to ensure that no one is left behind. The GCF strives to promote gender equity and invest in indigenous communities, while ensuring that it does not create indirect social damage. The group also invests in sustainable economic development, such as the bio-businesses described above.
3. 50-50 Mitigation and Adaptation
For years, climate action has mainly focused on reducing greenhouse gas emissions through investments in renewable energy and energy efficiency. This is called climate change mitigation. But as the impacts of climate change have worsened, it has become clear that communities also need help to adapt to changing environmental conditions. The United Nations has since called for climate finance to be split evenly between adaptation and mitigation, a mandate the GCF has adopted.
– World Bank Energy (@WBG_Energy) October 16, 2021
In recent years, the organization has increased its support for adaptation projects, particularly in vulnerable countries. One of these projects aims to help people cope with heat waves and rising temperatures in nine countries in Africa and the Asia-Pacific region. Funding will go to a cooling facility to provide sustainable cooling solutions, as opposed to traditional air conditioners that release greenhouse gases into the atmosphere.
Another adaptation project aims to mobilize funds for the protection of coral reefs in the waters of 17 countries.
At the same time, the organization continues to invest in renewable energy solutions such as improving the efficiency of solar panels in Chile, supporting one of the largest wind farms in the world in Egypt and the supply of clean cookers in Nepal.
4. Quick financing
Bureaucratic processes can slow things down in the multilateral organization, with delays sometimes wasting project goals. The GCF has worked to streamline its application, approval and monitoring processes to ensure that groups engaged in climate action can receive funding and support as soon as possible.
In particular, the organization has a “streamlined approval process” that helps interested parties gather all the information required for a funding application. Then the board aims to review and approve funding for eligible projects within weeks or months. This accelerated timeline can make the difference between communities adapting to worsening climate impacts and communities facing difficult decisions like whether or not to migrate.
5. Industry-wide collaboration
Climate finance is a huge area. Transforming the global economy, phasing out fossil fuels and adequately investing in adaptation measures will require billions of dollars in funding.
The GCF plays a small but important role within this space. Perhaps more importantly, the group acts as a kind of beacon, guiding public and private investors towards smarter, more efficient and more intersectional investments. The group helps manage a range of public-private projects that aim to foster long-term financing and works with hundreds of agencies, institutions, foundations and associations that fight poverty and climate change.
Because of its central position, the values defended by the GCF are gaining ground in the corridors of power elsewhere. Once marginalized ideas of climate justice, just transition and intersectionality are now dominant ideas in climate space. This cannot be attributed solely to GCF, but its support for these ideas gives them institutional legitimacy.
The coming decade will test whether humanity can overcome the greatest challenge it has ever faced: the climate and biodiversity crisis. Along the way, the GCF will ensure that our transition to a livable and just planet is done in the right way.
Disclosure: The Green Climate Fund is a financial partner of Global Citizen.