The recent formal pledging session for the Green Climate Fund (GCF)—more than $9 billion in just 5 months—is by far the most successful resource mobilization ever seen for a multilateral climate fund. The US has pledged $3 billion, followed by Japan ($1.5 billion), UK ($1.13 billion), and Germany and France (with $1 billion each). Four developing countries—Indonesia, Mexico, Mongolia, and Panama—have made pledges, breaking the traditional donor boundaries.
These developments should help spur climate negotiators now meeting in Lima, Peru, until December 12 for the 20th session of the Climate Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCC, COP 20).
With the expectation of a new climate agreement to be signed in a year’s time at COP 21 in Paris, climate negotiations over the last couple of years have not shown any great urgency nor made any major breakthroughs.
A recent glimmer of hope was seen at the UN Secretary General’s summit in September 2014 where some countries committed to mitigation actions. The Summit engaged at least 100 heads of state and over 800 leaders, focusing on actions that will reduce greenhouse gas (GHG) emissions and strengthen resilience, specifically in the areas of agriculture, energy, transport, forests, cities, and financing. The public and private sectors made bold commitments on cutting emissions and mobilized more than $200 billion in financing.
In the last couple of months, the announcements of the US-People’s Republic of China (PRC) pact on climate change and the India-US agreement on climate change and energy have also added to the momentum for a climate deal.
The US aims to reduce GHG emissions by 26-28% below 2005 levels by 2025. The PRC has announced targets to peak its CO2 emissions by 2030—with the intention to peak sooner, and to increase the PRC’s non-fossil fuel share of energy to around 20% by 2030. These pledges are an important boost to the international climate agenda as they publicly and jointly commit two of the biggest GHG emitters covering almost half of all global emissions.
India, another big emitter, has forged a partnership with the US to expand bilateral cooperation on climate change (finance, cities, grid and off-grid renewables, hydrofluorocarbons, resilience, and Reducing Emissions from Deforestation and forest Degradation [REDD]). The two countries also established a Climate Change Working Group to discuss strategies on how to achieve an ambitious multilateral global agreement at COP 21. The European Union has also pledged to cut GHG emissions by 40% by 2020 on 1990 levels, sending another strong signal ahead of COP 21.
Two crucial elements for the proposed climate agreement will be how countries commit to mitigation and developing countries finance mitigation and adaptation actions. Until now the confidence levels on financing were low and developing countries did not see enough reason to be at the negotiating table.
The GCF pledges have reached an encouraging level in a short space of time, but other climate funds have also done well—although over much longer time scales. For example, the Climate Investments Funds (CIFs) have contributions amounting to $8 billion since 2008; meanwhile the Global Environment Facility Trust Fund, already on its sixth cycle, has accumulated more than $6 billion since 1991 to invest in climate related projects. The UNFCCC related funds, Special Climate Change Fund, LDC Fund, and the Adaptation Fund, have grown over time to reach a size of $347 million, $915 million, and $226 million, respectively.
The funding pledged for GCF is clearly on a different level and is indicative of the scaling up of multilateral climate financing for climate action. However, whether this $9 billion pledge is sufficient to build the necessary positive drive in Lima remains to be seen.