A brief guide to key global initiatives in climate financing
GCF: Global Climate Fund. With US$10.2bn pledged as of December 2014, it is the world’s largest dedicated climate fund, and the flagship financing vehicle under the United Nations Framework Convention on Climate Change. GCF is headquartered in Songdo, South Korea, and is administered on an interim basis by the World Bank.
The biggest pledges have come from the US at US$3bn and Japan at US$1.5bn. Germany, France and the UK have promised about US$1bn each. The UN has a goal of mobilising US$100bn of climate finance a year by 2020.
Once accredited, institutions can access the fund directly, so multilaterals, such as the ADB, expect to tap into the GCF to co-finance green projects for its members. The GCF says its lending will be “deeply concessional”, but also expects to work closely with the private sector.
CIF: Climate Investment Funds. Set up in 2008, 14 countries have pledged a total of US$8.1bn to the CIF, which is expected to leverage an additional US$57bn from other sources. The biggest contributors are the UK with US$2.2bn, US (US$2bn) and Japan (US$1.3bn), according to June 2014 figures.
The CIF was designed to support progress towards the UN’s next global climate framework, and is managed by the multilateral development banks, including the ADB. Money goes towards grants, technical assistance and concessional loans to support MDB-funded projects. It is administered from the World Bank’s Washington offices, with the IBRD as trustee.
The CIF framework is divided into four main funds. The US$5.3bn Clean Technology Fund (CTF), for low-carbon projects in middle-income countries, and other strategic funds that invest in pilot projects: the US$785m Forest Investment Program (FIP), the US$1.2bn Pilot Program for Climate Resilience (PPCR), which specialises in adaptation planning, and the US$796m Scaling Up Renewable Energy in Low Income Countries Program (SREP) for the world’s poorest countries.
GEF: Global Environment Facility. A 1991 vintage international organisation for environmental projects, which include climate change, but also cover biodiversity and pollution. The fund has been replenished five times and cumulative contributions have reached US$15.25bn from 39 donor countries. Once the GCF is fully operational, the portion of the GEF dedicated to climate change is likely to decrease.
GGGI: Denmark and South Korea have championed the Global Green Growth Institute, set up in 2012 to promote knowledge sharing between member governments.
UNFCCC: United Nations Framework Convention on Climate Change. The UNFCCC is pushing for a legally binding global agreement on curbing carbon emissions, to be made at the next stakeholders meeting in Paris in December 2015. After difficult negotiations at Copenhagen in 2009, activists are hopeful that a softer stance from the US and China will pave the way for a significant global agreement to be reached. Measures are to take effect from 2020.
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