Green Climate Fund

Background
As a result of the Copenhagen Accord in 2009, the Green Climate Fund (GCF) has been established as an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change to support projects, programme, policies and other activities in developing countries related to mitigation and adaptation. The GCF has evolved rapidly to be the largest multilateral climate fund, with an initial resource mobilization of pledges amounting to US$10.3 billion for the 2015-2018 programming period.

The GCF has defined a list of the initial result areas (Annex I, page 35), and many of these areas are of direct or indirect relevance to achieving the objectives of the Convention on Biological Diversity (CBD). These include: sustainable land use management to support mitigation and adaptation; sustainable forest management to support mitigation and adaptation including afforestation and reduction of forest degradation; REDD+ implementation; adaptation activities to reduce climate-related vulnerabilities; and related readiness and capacity building activities. Many decisions of the Conference of the Parties to the CBD have highlighted the importance of climate change mitigation and adaptation for achieving the objectives of the Convention, and have advocated ecosystem-based solutions for climate change.

Operational Structure
National Designated Authorities (NDAs) for each developing country act as the country’s interface with the Fund, and are involved closely in all of GCF’s funding processes. National Designated Authorities must approve all GCF project activities within the country. Best Practices Guidelines for NDA/FP Selection and Establishment; Best Practices for Country Coordination and Multi-Stakeholder Engagement

The Green Climate Fund is overseen by a Board of 24 members, comprising an equal number of individuals from developing and developed countries. The Board generally meets three times a year to decide on key issues guiding GCF funding activities and policies. The GCF report to the United Nations Framework Convention on Climate Change (UNFCCC), and the pertinent decisions from the UNFCCC Conference of the Parties include:
  • 2011: Decision 3/CP.17: Launching the Green Climate Fund
  • 2012: Decision 6/CP.18: Report of the Green Climate Fund to the Conference of the Parties and guidance to the Green Climate Fund. And 7/CP.18: Arrangements between the Conference of the Parties and the Green Climate Fund
  • 2013: Decision 4/CP.19: Report of the Green Climate Fund to the Conference of the Parties and guidance to the Green Climate Fund. And 5/CP.19: Arrangements between the Conference of the Parties and the Green Climate Fund
  • 2014: Decision 7/CP.20: Report of the Green Climate Fund to the Conference of the Parties and guidance to the Green Climate Fund
  • 2015: Decision 7/CP.21: Report of the Green Climate Fund to the Conference of the Parties and guidance to the Green Climate Fund
  • 2016: Decision 10/CP.22: Report of the Green Climate Fund to the Conference of the Parties and guidance to the Green Climate Fund

The GCF Secretariat, headquartered in Songdo, Republic of Korea, manages day-to-day activities of the Fund.

Accredited Observers can have access to the meetings of the GCF Board. Guidelines relating to the observer participation, accreditation of observer organizations and participation of active observers, (Annex XII, page 34).

Possible Entry Points
GCF projects range in level of funding (pages 62-63) from up to US$ 10 million (“micro”) to over US$ 250 million (“large). Projects are developed by national and international Accredited Entities with agreement and in close consultation with National Designated Authorities or focal points, based on the climate finance needs of individual developing countries. In addition, the GCF Private Sector Facility (PSF) engages directly with the private sector in transformational climate-sensitive investments and to leverage and crowd in additional financing.

Potential entry points for engagement with GCF activities at the national level include:

The Readiness and Preparatory Support Programme (the Readiness Programme)(GCF/B.08/10, 7 October 2014) provides up to USD 1 million per country per year for strengthening country capacity, engaging stakeholders in consultative processes, realizing direct access, providing access to finance, and mobilizing the private sector. In addition, up to USD 3 million per country is available for the formulation of national adaptation planning.

The GCF Project Preparation Facility (PPF) (Board Decision B.13/21) supports project and programme preparation, especially targeted to support national direct access entities and micro-to-small size category projects. Up to USD 1.5 million is available per request.

Both of these provide opportunities for focal points of the CBD to coordinate with GCF National Designated Authorities or focal points to facilitate due consideration of opportunities for ecosystem-based approaches to be integrated into proposals for GCF funding. Accordingly, CBD national focal may wish to engage with their GCF counterparts, as deemed relevant and appropriate in each unique national context. A list of National Designated Authorities or focal point is available here.

Through Structured dialogues, (Decision B.12/32, paragraph (j)), the GCF Secretariat has been organizing regional workshops on the development of regional hubs and on strengthening expertise in regions to support countries.

CBD decisions on climate change
Decision VII/15: Biodiversity and Climate Change
Decision VIII/30: Biodiversity and climate change: guidance to promote synergy among activities for biodiversity conservation, mitigating or adapting to climate change and combating land degradation
Decision IX/16: Biodiversity and Climate Change. A. Proposals for the integration of climate-change activities within the programmes of work of the Convention; B. Options for mutually supportive actions addressing climate change within the three Rio Conventions; C. Ocean Fertilization; D. Summary of the findings of the Global Assessment on Peatlands, Biodiversity and Climate Change
Decision X/33: Biodiversity and Climate Change
Decision XI/21: Biodiversity and climate change: integrating biodiversity considerations into climate-change related activities
Decision XI/19: Biodiversity and climate change related issues: advice on the application of relevant safeguards for biodiversity with regard to policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries
Decision XI/20: Climate-related geoengineering
Decision XII/20: Biodiversity and climate change and disaster risk reduction
Decision XIII/4: Biodiversity and climate change

Further readings
Biodiversity and Climate Change, UNEP/CBD/SBSTTA/20/10, 14 February 2016
Synthesis report on experiences with ecosystem-based approaches to climate change adaptation and disaster risk reduction, UNEP/CBD/SBSTTA/20/INF/2, 4 February 2016
Managing ecosystems in the context of climate change mitigation: A review of current knowledge and recommendations to support ecosystem-based mitigation actions that look beyond terrestrial forests, UNEP/CBD/SBSTTA/20/INF/3, 31 March 2016
Relationships between the Aichi Targets and land-based climate mitigation, UNEP/CBD/SBSTTA/20/INF/29, 18 April 2016
Guidance on enhancing positive and minimizing negative impacts on biodiversity of climate change adaptation activities, UNEP/CBD/SBSTTA/20/INF/1, 1 April 2016
Voluntary guidelines to support the integration of genetic diversity into national climate change adaptation planning, UNEP/CBD/SBSTTA/20/INF/4, 15 February 2016

Other materials

PNAS: Natural climate solutions, Bronson W. Griscoma et al. 20 Natural climate solutions (NCS): Forests (1. Reforestation, 2. Avoided Forest Conversion, 3. Natural Forest Management, 4. Improved Plantations, 5. Avoided Woodfuel, 6. Fire Management), Agriculture and Grasslands (7. Biochar, 8. Trees in Croplands, 9. Nutrient Management, 10. Grazing - Feed, 11. Conservation Agriculture, 12. Improved Rice, 13. Grazing - Animal Management, 14. Grazing - Optimal Intensity, 15. Grazing - Legumes, 16. Avoided Grassland Conversion), Wetlands (17. Coastal Restoration, 18. Peat Restoration, 19. Avoided Peat Impacts, 20. Avoided Coastal Impacts). Forest pathways offer over two thirds of cost-effectiveNCS mitigation, Grassland and agriculture pathways offer one-fifth, and wetland pathways 14%. Supporting information appendix

G20: Fostering sustainable global growth through green finance – what role for the G20?, Kathrin Berensmann et al, G20 Insights, 12 April 2017

2016
German Development Institute: Green Finance: Actors, Challenges and Policy Recommendations, Briefing Paper 23/2016: banks, institutional investors and international financial institutions (IFIs), as well as regulatory authorities and central banks.

UNEP: Green Finance for Developing Countries: Needs, Concerns and Innovations, UNEP Inquiry into the Design of a Sustainable Financial System, July 2016

IFC: Green Finance: A bottom-up approach to track existing flows, Climate Business Department, 2016. Tracking Green Finance in the Banking Sector. Bond Market and Institutional Investors.

UK: Globalising green finance: the UK as an international hub, City of London Corporation’s Green Finance Initiative, PwC. China has established standards for green bonds and environmental disclosure and now, through the green finance mechanism, may also offer government interest subsidies via refinancing and professional guarantees, set up a national green development fund, to improve investment returns; and urge local governments to include green financing into their annual task list. The European Commission is developing a “comprehensive European strategy on sustainable finance”, as well as a High Level Expert Group (HLEG) on sustainable finance to include representatives from across the sector. Japan’s Principles for Financial Action towards a Sustainable Society. The French government legislated on disclosure of climate change risks with the publication of Article 173, which is part of the 2015 Law on Energy Transition for Green Growth. It has also announced a government green bond programme to begin in early 2017. Sweden's innovation on green mortgages and municipal green financing. Bangladesh’s central bank concessionary refinancing for domestic bank green lending to promote renewable energy and environment friendly financial activity. 47 green product lines are now eligible for refinance. The US National Association of Insurance Commissioners (NAIC) Insurer Climate Risk Disclosure Survey now receives responses from 90 companies across 18 states. The disclosures and their ratings are made public.

2015
IDFC: IDFC Green Finance Mapping for 2014, International Development Finance Club, November 2015.

State of Green Finance in the UAE: The first national survey on contributions of financial institutions to Green Economy, United Arab Emirates Ministry of Environment and Water 2015

2014
Definition of Green Finance, Dr. Nannette Lindenberg, April 2014

Designing smart green finance incentive schemes: The role of the public sector and development banks, Amal-Lee Amin, Taylor Dimsdale and Marcela Jaramillo, April 2014, prepared for the KfW Financial Sector Development Symposium 2014: “Greening the Financial Sector – From Demonstration to Scale in Green Finance”.

2011
Green Finance: An Innovative Approach to Fostering Sustainable Economic Development and Adaptation to Climate Change, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Eschborn, September 2011.

  • United Nations
  • United Nations Environment Programme