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Time for developing countries to step up?

by: Red Constantino

The last day of the 9th meeting of the Board of the Green Climate Fund ended the day after it was supposed to conclude, on March 27. By tradition, because it has existed long enough to develop one, the GCF talks dragged late into the day and breached midnight by several hours. Few had looked forward to cold pizza and Korean bibimbap to go, but everyone knew what was coming.

It should not really be surprising to encounter disagreement, even turbulence, in GCF Board discussions. Given the magnitude of ambition that has been invested in the Fund and the diversity of views embedded in the global enterprise, conflicting views are almost certain.

The Green Climate Fund was established in 2010 with the hope that it would become the primary global fund for climate change finance in developing countries. Its aims are simple: with targeted financial support, the Fund can help countries develop and implement climate-resilient, low carbon development strategies that address the causes and consequences of climate change. And of course, this is all easier said than done.

A lot of hope is riding on the successful conclusion of debates in the GCF Board. It needs to agree on rules that will govern how money is spent, where it is spent, on what and using which modality, so that resources can flow to those who need it most, not only so that vulnerable communities can better adapt to the rapidly changing global climate but so that climate change-driven funding can also help accelerate transformation and de-carbonization on global, national and local scales.

But it’s going to be a tough job, because protracted calamity is apparently still not enough to spur real action.

Among developed countries there is no shortage of climate change villainy. The GCF exists, after all, because rich nations polluted wantonly, fouling up everyone’s atmosphere with impunity. Even attempts to solve the crisis are used as windows to spread the stink. Japan, for instance, claims to have provided $16 billion in public and private finance since 2013 “to support developing countries’ response to climate change.” Yet a lot of that cash was used to finance horrible coal plants in India and Bangladesh.

And yet the point is not lost on keen observers — Japan offered coal money, yes, but the developing country governments accepted. Because it takes two to tango, and a few more to dance the kuchipudi.

That’s the way it is now, apparently. This is the period of climate extremes, not a mythical 70s show where heroic national liberation movements struggle against malign imperialists. No one is blameless now, save for communities on the frontline of the climate crisis, who today have to deal with both ends of a growing problem – haughty, stingy developed country treasuries and the sticky hands of developing nation capitals, particularly governments of emerging economies.

The recently concluded GCF meeting in Songdo grappled with familiar dynamics. In the discussion around the Fund’s proposed Investment Framework, for instance, rather than argue about what to measure when assessing whether incoming proposals are good or bad – whether they promote transformational change or sustain business as usual practices – India took the interesting position of opposing any suggestion that would allow for meaningful evaluation of proposals.

It was an absurd stance. Instead of arguing against the use of meaningless yardsticks in the Investment Framework that some rich countries tried to push, such as measuring the financial leverage potential of a project, India questioned whether the Fund had to measure the expected impact of proposals at all before deciding what to invest in. The position was akin to a hungry diabetic in a restaurant opting to throw up a dart hoping that it lands (somewhere) on a menu instead of identifying dishes and ascertaining the sugar content, calorific value, portion size and other nutritional information of meals on offer.

In fact, the scaling bar was set so ludicrously low in the proposed draft text under consideration by the Board – a clumsy grading of “high” or “medium” or “low” based on the paradigm shifting potential of a proposal would be assigned by an independent expert panel and the Fund’s Secretariat with balanced developing and developed country representation – and still India found reason to oppose this. How silly.

Without scaling there can be no guidance to the Board, and without such guidance the Board cannot be expected to make informed decisions. India’s posturing proffers instead a first-come, first-served outcome, where developing countries able to write and deliver proposals faster – without necessarily being the most vulnerable or delivering the most transformational plan – get to access the Fund first.

In the discussion on Accreditation, an interesting statement was delivered by another large developing country. Many observers to the climate change negotiations will recall strident speeches delivered countless times by developing countries demanding direct access to climate finance, in reference to the funding modality that allows a developing country to directly access global climate resources without having to pass through multilateral development banks (MDB) such as the World Bank, which from experience take advantage of the situation by tacking on onerous conditions to grants that were merely coursed through them or which they were simply asked to hold or manage.

During the exchanges, South Africa asked the GCF Secretariat to confirm whether or not an institution from a developing country could also, similar to an MDB or bank such as Germany’s KFW, become an entity allowed to manage and deliver GCF money to projects and localities in other countries in the same region.

Now, there is a lot of scope for developing countries to extend climate change-related support for other developing countries in terms of finance or capacity–building. But there’s also an equal chance that we’ll end up with similar ill outcomes, only this time with different actors. South Africa’s request for confirmation actually sounded more like an insistence that it was now their turn – the turn of large developing country economies — to use climate finance to broaden their sway over less able countries in their region, and to hold back other national institutions from building up capacity, thereby undermining the very modality of direct access that they had previously championed.

In the discussion over Legal and Formal Arrangements of Accredited Entities, another interesting case arose. The US delivered during the discussion what many found to be a horrible statement, asserting that anything that an entity accredited by the Fund deems to be commercially sensitive information should be exempt from disclosure, thus leaving it entirely to the accredited entity to decide what is confidential or not. Yet China, seemingly making up the other half of the secrecy tag team, swiftly stepped in to broaden the US proposal, suggested that anything an entity deems sensitive – whether of a commercial nature or otherwise – should be excluded from disclosure. That’s not a very good precedent for transparency.

On the subject of the Fund’s proposed Gender Policy, just when everyone on the Board thought there would be agreement on the draft text, Saudi Arabia raised their flag and said they could not support it – a virtual veto. The Saudi representative complained that he had no time to consult Riyadh, implying inadequate time to scrutinize serious changes made in the draft. And yet it was the same draft he had access to for weeks, with the exception of the addition of innocuous text saying an update on the policy should be provided during the 12th meeting of the Fund board. Later on, Saudi Arabia admitted that its opposition to the proposed GCF Gender Policy – which covers by broad aspiration at least half of the vulnerable people in the world – was based on theocratic reasons. (To the credit of the Democratic Republic of Congo, the Congolese representative pushed in the other direction and read out his position in support of the draft.)

And then there were the ones who chose silence. Or, rather, the ones who favored absence.

Once the Co-Chair of the Fund with Germany, the Philippines stepped down from the post during the 7th board meeting in Korea and afterwards assumed the position of Alternate Board member. Unfortunately, the Philippine representative did not even bother to send an official from the finance or economic planning ministry to the 8th and 9th GCF Board meetings. Such indifference does little to fix the huge inadequacies of the government to ensure the Philippines is technically and competently able to engage the GCF. While it is laudable that the government is making a serious effort to gain accreditation with the Fund, it is deplorable that it refuses to do the hard work of shaping the rules and learning how to access scarce public finance.

Surely we can be better than this?

Editor’s note: This article is re-posted from ABS-CBN News .

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