An overview of the Green Climate Fund

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Quamrul Islam Chowdhury
After almost a year-long marathon contention and debates, South Korean Incheon City's Songdo has been picked to be the home of the Green Climate Fund (GCF) by its Board at its just concluded three-day second meeting, also held at Songdo on October 18-20. This consensus decision after several rounds of ballots, moves definitely the GCF a step closer to its full operationalisation but disbursement of the climate fund among developing countries --- especially among the least developed countries (LDCs) like Bangladesh for addressing both adaptation and mitigation will take some time. Decks are yet to be cleared.
The Songdo decision of the GCF Board is expected to be endorsed by the forthcoming 18th meeting of the Conference of Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC) to be held in Doha, Qatar in late November.
The GCF was established at COP 16 in Cancun 2010, when Bangladesh and Australia co-chaired the finance negotiation. The governing instrument of GCF was approved in Durban in 2011 at COP 17.
During the first meeting of the GCF Board in Geneva in August 2012, the Board formed a host country Evaluation Committee for conducting an open and transparent process to assess the proposals received based on the evaluation criteria. Six countries had offered to host the GCF -Switzerland, Germany, Namibia, Mexico, South Korea and Poland.
At the second meeting, besides selecting the host country for the GCF, the Board discussed a wide range of issues including, additional rules of procedure, its work plan and priorities, arrangements for the interim trustee, arrangements for an independent secretariat and the selection of its Executive Director, the status of the resources and administrative budget of the GCF and arrangements between the COP and the Fund.
After lengthy and at times hot deliberations, the Board agreed to work with a listing of 25 indicative priority matters in the work plan until the end of 2013. The top five of these were: the business model framework, private sector facility-related matters, resource mobilisation, results management framework and the establishment of the independent secretariat. These will also be the key agenda items proposed for discussion at the first Board Meeting in the year 2013.
The members from the developing countries wanted to focus on the structural and institutional issues they saw as critical to fully operationalise the GCF such as the arrangements for the establishment of the independent secretariat including hiring the Executive Director, host country arrangements and resource mobilisation. But the members from developed countries emphasised the private sector facility and business model at the first meeting.
LDCs and Small Island Developing States raised the issue of readiness and preparatory support to have priority.
Finally, the meeting decided that the interim secretariat, working with a six- member board team, would prepare a set of five documents for the first Board meeting in 2013:
First, business model framework, covering the issue of structure and organisation of the Fund including structural options for the business model, models for the delivery of the Fund's resources, structural options and financial instruments in terms of leveraging potential of additional public and private sector finance, complementary utilisation of the Fund with other channels of climate finance and linkages with thematic bodies of the United Nations Framework Convention on Climate Change; private sector facility and related matters; access modalities and result management framework;
Second, resource mobilisation, including policies and procedures for public contributions and other contributions, including that from alternative sources; process and policies, participants and timeframes for resource mobilisation and subsequent replenishments;
Third, modalities for readiness and preparatory support, including priority areas, mechanisms for allocation, delivery and simplified approval process for readiness and complementary operation of modalities for readiness and preparatory support with other channels of climate finance;
Fourth, establishment of the independent secretariat, including selection of the Executive Director, review of staffing of the interim secretariat and guidance on administrative policies.
The fifth document focuses on host country agreement - relating to provisional legal arrangements for privileges and immunities for the establishment of the independent
secretariat.
On the business model framework, a six- member team is to facilitate the preparation of the document. The interim secretariat will elicit input from consultants, experts and stakeholders, including private sector and civil society organisations on specific
matters.
At the Songdo meeting, there was consensus that the Fund needed to look for a highly qualified Executive Director for the GCF. The Board proceeded to establish an "Executive Search Committee" to explore these issues, including the terms of reference for the Executive Director; to decide on whether or not a search firm should be contacted as part of the selection process and if so, to develop the terms of reference for contacting such a firm. The Committee would ultimately recommend a short list of three names to be considered for the Executive Director's position of the Board.
During the second meeting of the GCF Board, there were differences of opinion among the Board members as to whether or not the Board should initiate the arrangements between the COP and the GCF or if this was the prerogative of the COP. Developing-country members on the Board such as David Kaluba (Zambia), Zou (China), El Arini (Egypt) and Dasgupta (India) strongly argued that based on the provisions of the Convention as well as the GCF's governing instrument, and the Durban COP decision, the arrangements should be determined by the COP.
LDC member Kaluba pointed out that the COP is the superior organ or body that gives guidance and it should be left to form its mandate and its role and said that the Board should not assume the role of the COP on how the arrangements should be handled. Zou agreed that the Fund was a mechanism under the guidance of the COP and so, the arrangements should be initiated by the COP, not the Board.
But Metcalf (US) supported by Hilton (Australia), Nick Dyer (UK) and Amaud Buisse (France) were of the opinion that the Board should take the initiative and undertake the draft arrangements. The co-chairs concluded that there was no consensus on the issue.
The GCF Board's third meeting is scheduled to be held in Berlin, Germany on March 12-15 next year.
Quamrul Islam Chowdhury is a member of UN Climate Change Adaptation Committee and a lead negotiator of LDCs.
quamrul2030@gamil.com