Green Climate Fund at the COP17 negotiating table

By Alex Lenferna

The largest ever financial vehicle for the distribution of climate justice is soon to be on the negotiating table at COP17. International delegates at COP17 are gearing up to discuss the Green Climate Fund, which requests of developed countries to provide developing countries with “scaled up, predictable, new and additional, and adequate funding” to deal with climate change. Its future might, however, be on shaky grounds.

The Green Climate Fund is founded on the recognition that developed countries, because of their responsibility for the majority of past greenhouse gas emissions, have an obligation to developing countries who will be affected by the negative impacts those past emissions will have on them — developing countries, although consisting of 80% of world population, are responsible for only 1/5 of historic global emissions. In this light, under the United Nations Framework Convention on Climate Change, developed countries have committed to contribute at least $100 billion a year as soon as possible and no later than 2020. This finance in turn will be used by developing countries to enhance action on mitigation, adaptation, capacity building and technology development, in order to better respond to climate change.

Currently finance to developing countries comes in the form of “fast-start” finance, which is supposed to “approaching $30 billion for the period 2010–2012” under the Cancun agreements from COP16. Of this only $16 billion has been budgeted for the fast-start period, by the countries who pledged their commitment. Despite the fact that the fast-start period’s commitments aren’t on schedule to be met, COP17 is looking to the future, beyond 2012 when the fast-start pledges end and the build-up to the $100 billion dollars a year by 2020 begins. The next step in this process, it is hoped, is the financing of the Green Climate Fund, which still remains very much an empty shell.

One hundred billion dollars when seen alone might seem a rather large figure, but when compared to the trillions of dollars spent bailing out banks in 2008, then $100 billion to bailout 80% of the world’s population from a dismal climate future seems a bit more reasonable. Also, when compared to 2010’s spending of $400 billion to subsidise fossil fuels, and $1.6 trillion on military spending, a paltry $100 billion doesn’t seem that much, especially considering that amount may not even be enough to address the needs of developing countries.

Various different sources of funding for the Green Climate Fund have been proposed. One such source is a tax on various global financial transactions — the aptly named Robin Hood Tax — which has the potential added benefit of reducing speculative financial transactions and thus helping stabilise global markets. Another source is a tax on aviation and shipping emissions, which was recently proposed by the European Union. The global response to EU’s proposed regional tax has been less than encouraging, but much of the disagreement has to do with the limited and regional nature of EU’s proposed tax, rather than with the tax itself. Oxfam, WWF and the International Chamber of Shipping, on the other hand, have proposed a global shipping tax in order to ensure that there isn’t “carbon leakages” from sectors not regulated under a less than global taxation mechanism. The Climate Action Network consisting of over 700 NGOs is demanding that the Green Climate Fund is funded by such public sources of finances, as well as other possible sources of funding, such as special drawing rights, but, discussions on sources may be shot down before they get out of the blocks.

A 40-nation committee, co-chaired by South Africa’s national planning committee chairperson, Trevor Manuel, created a report detailing the potential working of the Green Climate Fund. Consensus on the report was blocked, however, by two of global climate negotiations most infamous nations, the US and Saudi Arabia. They did, however, agree to let the report pass, but noted their disagreement with sections of it. However, with discussion on the Green Climate Fund and long-term financing set to reopen yesterday, that disagreement may come back to haunt the global community. If Saudi Arabia and the US decide to reopen discussion on the report, this might stall decisions on climate finance for quite some time to come, and delay meaningful action on it. Furthermore, with rumours circulating that the Bolivian Alliance for the Americas and a few other countries might want to reopen the document as well, the threat of a can of worms opening up that will take forever to close, is quite real.

There are still a number of issues that need to be ironed out with regards to financing. One of the main issues is a clear-cut definition and regulation of what counts as new and additional funding. Many countries are simply redirecting existing aid funds to climate-change issues. More nefariously, the US and a few other countries are accused of using the threat of withdrawal of funding aid to hold recipient countries hostage to their political will during the climate negotiations — a political will that might very well jeopardise their future.

As a South African, with one of the highest current per capita carbon emissions, I cannot help but wonder, if the Green Climate Fund is successful, when will we and other “progressive” developing countries like China, Brazil and India (with our ever-increasing emissions) stop being recipients of the Green Climate Fund, and start being contributors to it? Nonetheless, as a tool for the deliverance of climate justice and the wealth transfers associated with it, the Green Climate Fund could be the greatest global mechanism available. While one can understand why the Republicans, who are sceptical of climate change, see the Green Climate Fund to be the tool of global socialism, for those of us who understand that the impacts of climate change are real and who recognise the developed world as the cause of many of those impacts, justice needs a vehicle, let’s hope Saudi Arabia and the US don’t create an intractable oil slick on its road through COP17.

Alex Lenferna is the lead tracker of the South African government during COP 17 under www.adoptanegotiator.org, as well as chairperson of the South East African Climate Consortium Student Forum (www.ru.ac.za/rugreen). Follow Alex as he tracks South Africa’s progress within COP 17 on Twitter (@al_lenferna), Facebook/Alex Lenferna or www.adoptanegotiator.org.