Green Climate Fund for UPSC Civil Services Exam
Important for Prelims and Mains (Paper III): - Environment and Ecology, Climate Change
Green climate fund (GCF), envisaged as the largest multilateral fund is a financial mechanism to support developing countries to achieve the goal towards mitigation and adaptation measures to counter climate change.
The first mention of this climate finance fund was done during the Copenhagen Accord (COP-15). Later, it was finally formulated in 2010 during Conference Of Parties meeting (COP-16) at Cancun, Mexico by 194 countries who are members of the UNFCCC.
Though it was adopted and designated as an operational entity in 2011 during COP -17 held at Durban, South Africa, but it became fully operational in 2015.
This fund is backed by the World Bank, which acts as the interim trustee of GCF.
Aim of Green climate fund (GCF)
- To help developing countries to achieve their efforts for their paradigm shift towards low emissions and climate-resilient development pathways.
- To focus on the needs of societies that are highly vulnerable to the effects of climate change, in particular, Least Developed Nations, Small Island Developing States, and the African States.
- It is intended to raise Climate Finance of $100 billion annually by 2020.
Features of Green climate fund (GCF)
- The fund can be in the form of loans, grants or capital.
- The fund can be in any convertible currency- by agreement, via promissory notes or in cash.
- There is no limit on the amount that a contributor may contribute.
- GCF accept a contribution from developed countries party of UNFCCC, and from other sources also, that include countries that are not a party to the UNFCCC, foundations or entities.
India and Green climate fund (GCF)
The Ministry of Environment, Forests and Climate Change is designated as the authority of GCF. Presently, two public sector entities from India, namely, NABARD and SIDBI are the direct access entities for accreditation by GCF. [ India also nominated 3 public entities, namely, YES Bank, IDFC Bank, and IL&FS Environmental Services for accreditation but not approved].
How can Green climate fund (GCF) help India
As part of the landmark Climate Accord signed during Paris Agreement in 2015, India formulated her INDC( Intended Nationally Determined Contribution), the major specific actions that were listed by India to fight Climate Change was-
- To reduce her emission intensity by 33-35% by the year 2030 as compared to the 2005 baseline.
- To achieve about 40% of cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
- To better adapt Climate Change by enhancing investments in the sector that are vulnerable to Climate Change like agriculture, water resources, Coastal regions, etc.
- To mobilize domestic and additional funds for implementing mitigation and adaptation actions.
The agreement between NABARD and GCF is worthwhile in an attempt of Government Of India to achieve INDCs and adopt other enduring actions for climate change mitigation and adaptation, which can ensure sustainability.
Projects in India funded by Green climate fund (GCF)
- India’s first GCF aided project was implemented in Odisha worth $34 million - ” Groundwater recharge and solar micro-irrigation to ensure food security and enhance resilience in vulnerable tribal areas of Odisha” in 2017
- The US $43 million GCF to boost climate resilience for India’s coastal communities in 2018.
- The US $100 million solar rooftop project funded under GCF in April 2019 - first GCF private sector project in the country.
To combat Climate Change, GCF is a step in the right direction but there are several unresolved issues associated with it:-
- During COP-24, at Katowice, Poland GCF was criticized for having No roadmap for the mobilization of funds till 2020. It is still in it’s “ initial resource mobilization” period.
- During inception, it earmarked the flow of climate finance of $100 billion a year by 2020, but it has been able to raise only $10 billion so far.
- The fund was intended to maintain a balance between funding for mitigation and adaptation practices but most of the total finance flowed into mitigation.
- A complicated procedure to get accreditation for funding.
- It consists of all the developed and developing countries having an equal voice. Reaching a consensus on such a large size body is difficult.
How GCF can be more efficacious
There are several projects already financed by GCF from solar power to water management and climate-resilient agriculture in countries like Mongolia, Nigeria, Uganda, Columbia, etc. However, there is a crisis of confidence that GCF is facing as mentioned above.
It is very important to fix that crisis in order to utilize this finance mechanism to the fullest effect.
- Adequate resources and better governance both are elemental for re-establishing the confidence. The recent move towards GCF replenishment is welcomed.
- The contributor countries must put their global commitments to provide climate funds.
- The adaptation fund in vulnerable nations must be in the form of grants as it will be difficult for such nations to repay the funds taken as loans.
- The strategic programming and planning along with Performance Review must be done periodically in order to achieve GCF's full potential.
Thus, GCF is a key instrument to drive climate action. With proper modelling of such a unique kind of climate finance, it is possible to achieve the targets of the Paris Agreement and Agenda 2030.
" GCF is growing and it needs to grow and play a more decisive role in support of climate action"- UN Secretary-General.
Questions related to Green climate fund (GCF)
Q:- Which of the following statements about GCF is correct?
- GCF is a framework under UNFCCC and it was established in the year 2009.
- World Bank is the permanent trustee of GCF.
- The GCF board consists of 24 members equally from developing and developed countries members of UNFCCC.
Choose the correct option:-
- 1 and 2 only
- 2 and 3 only
c.1,2 and 3
- 3 only
Answer:- (d) 3 only.
Statement 1 is wrong, as GCF was established in 2010. In 2009 it was just mentioned during the meeting.
Statement 2 is wrong because till date the World Bank is the interim trustee of GCF.