The Green Climate Fund (GCF) is the world’s largest climate fund, created in 2010 as part of the United Nations Framework Convention on Climate Change (UNFCCC) framework [1]. The organisation channels public and private finance into mitigation and adaptation initiatives primarily based in developing countries.
The GCF’s mission and approach:
The GCF, headquartered in Songdo, South Korea, is a United Nations (UN) body currently headed by Executive Director Yannick Glemarec. Its mission centres on ensuring developing countries meet their Nationally Determined Contributions (NDC) targets by investing in “low emission and climate-resilient development” [2].
The fund’s approach is country-driven; national governments retain control over the implementation of the initiatives whilst the GCF generates the required capital flows by co-ordinating “unprecedented coalitions” of public and private financial institutions [1]. The GCF is also mandated to split its investments equally between mitigation and adaptation with 50% of the latter portion of funds dedicated to the most climate vulnerable countries [3].
The GCF’s work centres on four key areas – the built environment; energy and industry; human security, livelihoods and well-being; and land-use, forests and ecosystems. Within these areas, investments fit into a “four-pronged approach”, encompassing [1]:
- Transformational policymaking to maximise the “co-benefits of mitigation and adaptation” [1].
- De-risking investment to improve the rate of returns for scarce public finances [1].
- Mainstreaming climate risks and opportunities into financial decision-making [1].
- Innovative green technology and improved business models and practices [1].
The GCF claims to have contributed to 190 projects, the cumulative impact of which has been to improve the resilience of 613 million people and prevent two billion tonnes of carbon dioxide (CO2) being emitted [2].
The Work of the GCF:
One of the fund’s major multinational projects is the ‘Great Green Wall’ mission to grow 8000 km of vegetation across the entire width of Sub-Saharan Africa, demonstrating the fund’s ability to seamlessly unite mitigation and adaptation policymaking [4]. For this initiative, the GCF partnered with the UN’s International Fund for Agricultural Development to mobilise USD 143 million, which will be distributed across seven countries and support regional bodies such as the African Risk Capacity (ARC) Group [5].
By creating such broad coalitions, the GCF minimises the risk of the public investment; resources and expertise are coalesced whilst liability is shared. This immense initiative, which aims to sequester 250 million tonnes of carbon and create 10 million jobs, encapsulates the benefit of the GCF’s global reach [6].
Recently, the GCF has once again highlighted the need to consider climate factors in all financial decision-making by addressing the need for a sustainable pandemic recovery [7]. At a panel discussion hosted by the GCF’s COP26 pavilion, Yannick Glemarec highlighted that only 20% of global COVID-19 recovery programmes are ‘green’ [7].
Consequently, the fund is pushing for initiatives, particularly those within green technology, that support such a recovery. For example, the recent GCF project to mobilise USD 30 million to shield African clean energy companies from economic volatility during the current period of uncertainty [8].
GCF’s Controversies
However, the GCF’s work has not been without criticism. The major concern raised is that bureaucratic complexity and opaque decision-making prevent the poorest states accessing GCF funding [9]. In fact, one study found that only 18% of the organisation’s investments have gone to the world’s least well-off countries whilst 65% go to middle-income states [9]. This is largely because countries need a GCF-accredited “nationally designated authority” to coordinate the fund’s investments, yet GCF “bottlenecks” have prevented all but 13 African states receiving this accreditation [9, 10].
The fund has been further criticised for its in-country approach. Firstly, the GCF is spending two-thirds of its funding on mitigation-orientated initiatives, despite being mandated to focus on adaptation and mitigation equally [11]. This is problematic as many of the fund’s partner countries, keen to scale up their adaptation, feel that the GCF is ignoring critical loan and grant options that could further their efforts [12]. The fund has also been called out for not properly engaging with indigenous communities as they centre their efforts on national governments, often to the detriment of a state’s minority groups that hold little electoral sway over the country’s federal bodies [12].
The GCF also suffers the consequences of systemic problems within global climate finance mobilisation. Notably, the failure of the world’s richest countries to meet their USD 100 billion target has impeded the fund’s ability to finance its projects [13]. Unfortunately, neither the GCF or the UN have the power to legally require countries to deliver on these promised funds and the target is unlikely to be met before 2023 [14].
The cumulative result of these problems is that the fund is accused of failing to secure a globally just transition as the poorest countries disproportionately face the consequences of the climate crisis without the GCF providing the required financial support of wealthier, more industrialised economies [15].
Conclusion
In sum, the GCF is a vital component in the global mobilisation of climate finance with its holistic approach and record of successful projects. Nonetheless, its work also demonstrates persistent structural issues which prevent effective support for the world’s most vulnerable communities and must be addressed moving forward.
