Delta Electronics Foundation attends GCF Conference, keeping abreast of climate fund movement

United Nations Framework Convention on Climate Change (UNFCCC) has been established for more than 1/4 century. I believe as at today, there is consensus among developed and developing countries that human need to take action to fight against climate change. However, a cruel reality always exists, which is where the money comes from and how it should be used. 

Green Climate Fund (GCF) was established under such circumstances, and has become an important body for administrating flow of global climate fund. In early March, GCF held its 19th Meeting of the Board at its headquarters in Incheon of Seoul. Delta sent its personnel to Incheon to bring firsthand information to the people of Taiwan.

Late arrival of fund, accused of inefficiency in execution
GCF was born due to the disappointing 2009 Copenhagen Climate Conference (COP15). The following year, developed countries promised to pump USD 100 billion per year before 2020 to assist weak regions, such as the least developed countries (LDCs), Small Island Developing States (SIDS), African countries, etc. to deal with climate change, and GCF was set up in 2012 to manage this common fund. 

GCF holds three regular meetings of the board every year. Delta Electronics Foundation, which has been following climate issues closely over the years, has also obtained an observer status in 2014 to attend the meeting and keep abreast of movement of the current global climate fund.

GCF has only raised USD 7 billion at present, which is a huge funding gap (Source: World Bank) 

According to the latest official statistics, GCF has raised USD 6.78 billion as of now. There have been more than 300 GCF applications in the past 6 years, with approximately 1/3 having passed the preliminary selection and moved into the approval stage. However, as of end of 2017, only 53 applications have been approved, with a total release of USD 2.6 billion, which led to the organization being criticized for their inefficiency. 

GCF has its considerations for being prudent. Firstly, with the numerous and varied international climate action plans, GCF has to be very careful in playing the role of an official fund for the United Nations, and uphold the principles of fairness and transparency during the process in order to prevent extravagant spending or being questioned for underhand dealings. Secondly, due to the delay in receipt of expected fund, the approved cases have utilized nearly 40% of the fund. Hence, they have to be very cautious so as not to fall into the dilemma of fund shortage. 

Speaking of which, you must be curious how GCF plays the role of a gatekeeper. Firstly, every proposal has to pass through both the Secretariat and independent echnical Advisory Panel (iTAP) for approval to ensure the content complies with carbon emission reduction and environmental friendly benefits, promotes social participation and gender equality, and does not infringe the rights of the indigenous people, and then only can it be discussed during the meeting of the board. The six major investment criterions released by GCF are: potential of impact (carbon emission reduction benefits), potential for paradigm shift, potential for sustainable development, needs of the recipient (financial soundness), country ownership (the degree of cooperation with other countries’ INDC programs), and efficiency and effectiveness.

The approved cases at present are mainly generating “green energy” and increasing “energy efficiency”(data compiled by: Zhan Yi-Jie)

Where does the money go? Nearly half goes into “green energy”and “energy efficiency”

As at the end of last year, nearly half of the 53 approved applications involve renewable energy and increasing energy efficiency, which shows that these are the more popular and most easily approved mainstream projects. 

In response to the accusation of inefficiency, GCF unprecedentedly approved 23 funding projects, totaling USD 1.09 billion, in the 19th Meeting of the Board held in March. This is significantly faster than the average of less than 10 cases per year in the past.

1/3 of the 23 newly approved new cases is related to energy resources, including a Brazilian city proposing to replace their street lamps with LED lights, Outer Mongolia proposing to build a green energy community, Paraguay and Vietnam subsidizing industrial energy-saving, etc., exhibiting significant carbon-reduction potential.

Observers are able to keep abreast of the GCF meeting through broadcast, and send representatives to express their opinions despite not having the right to speak

In fact, the approval process is not solely carried out by GCF personnel, as Civil Society Organization (CSOs) can also express their opinions. In this meeting, Delta correspondents, together with CSO members from other countries, wrote policy advice to GCF’s Meeting for the Board pertaining to a few controversial cases. This increases Delta Electronics Foundation’s visibility and influence in global climate communities.

With the global carbon reduction target set in the Paris Agreement, there have been ongoing discussions on ways to raise fund and use of the climate fund, proven by the outstanding performance of Green Bond in recent years. According to the statistics of Climate Bonds Initiative, compared to USD 13 billion in 2013, last year’s issuance of Global Green bond increased to USD 155 billion. By understanding GCF’s operation, we hope to help various sectors of Taiwan to keep abreast of the movement of international green finance and carbon reduction, and catch up with this irreversible wave.

Delta correspondents work with CSO members from different countries in raising policy advice for GCF review procedures

Reference / 
http://fiftrustee.worldbank.org/Pages/gcf.aspx
https://www.greenclimate.fund/-/gcf-board-approves-over-usd-1-billion-in-funding-for-climatemitigation-and-adaptation?inheritRedirect=true&redirect=%2Fhome
https://www.moneydj.com/KMDJ/News/NewsViewer.aspx?a=075a4bb3-c5b9-4fd4-b891-70d2343329b7