New Global Fund to Help Combat Climate Change Open for Business
- May 26, 2014
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Jake Schmidt, International Climate Policy Director, Washington, DC
The Board of the Green Climate Fund – the new multilateral fund to support developing countries in efforts to address climate change – finalized its overarching business model so that countries can begin to direct resources through the fund. The fund creates a unique opportunity to help developing countries take advantage of targeted investments to support their efforts to move towards a low-carbon economy and address the impacts of climate change. Countries can now turn this concept into reality and start mobilizing initial resources through the new Fund – the sign now says “Open for Business”.
This agreement comes at a critical time as the lowered costs of clean energy, signs of progress in deforestation reductions, and other proven emissions reduction opportunities are no longer merely concepts. Countries can now easily develop innovative ways to unleash these promising opportunities that reduce climate pollution. The fund can help countries tap into innovative ways to make transformational changes to reduce emissions, while simultaneously helping pull millions out of poverty. So countries looking to expand their electricity needs can now find ways to tap into the low cost wind and solar energy sources that are widely available throughout the world. And countries that finally want to come to grips with their massive forest loss can find ways to change their laws, ensure stronger enforcement against illegal logging, and create alternative livelihoods to decrease deforestation.
With clear science on the impacts of climate change, this Fund will also help the most vulnerable cope with the ever damaging impacts from climate change. Countries can receive support to help create and implement sound ways to adapt to climate change. Countries facing extreme drought can be assisted in finding ways to minimize the decrease in agricultural productivity. The most vulnerable can now find ways to reduce their vulnerability to increased flooding and other climate induced damages.
In 2013, the Board had agreed that “Eight Essential” items must be agreed before countries would have confidence in dedicating resources to the fund. The Board finalized the six outstanding threshold issues at their recent meeting. This creates the overall “Business Model” for the fund and begins the important process of mobilizing resources. After all, an investment tool to address climate change without resources doesn’t help solve the challenge of climate change. Now countries will start beginning to mobilize resources for this new Fund.
Much more detailed work lies ahead to ensure that this fund is innovative, transformative, and successful. This agreement is a good start on the path to a strong agreement in Paris next year as the finance package has consistently been a key barrier to agreement. And it creates the opportunity to help unleash even greater climate action in developing countries.
Photo Credit: Climate Change and Global Green Funding/shutterstock