The GCF draws upon resources from public, private, and philanthropic sources. It was first established at COP16 as an operating entity of the Financial Mechanism of the Convention under Article 11. The GCF supports projects, programmes, policies and other activities in developing country Parties. The Fund is governed by the GCF Board.
Dollars and Sense
The GCF is an important part of green finance and it is essential to climate action in poorer nations. Advanced economies have agreed to jointly mobilize $100 billion for the fund every year by 2020. The G20 has promised to contribute $10 billion to the GCF and leaders at a G7 Summit in June 2015, reiterated the GCF's role as a key institution for global climate finance.
As of February 2016, the Green Climate Fund had raised $10.2 billion in pledges from 42 state governments.
In March the US agreed to formalize their $3 billion pledge that was made in 2014 and send its first installment of $500 million. As the world's largest economy the US is also the world's largest donor.
Formative Hurdles
There were a host of problems that plagued the GCF from its inception including the fact that the adaptation fund has been persistently below its capitalisation targets
Very early on it came to light that Japan had used its initial climate finance to construct three coal fired plants in Indonesia. This prompted green groups to send a letter the GTF asking them to adopt an explicit policy to ensure that its funds will not be used directly or indirectly for financing fossil fuel or other polluting energy initiatives.
The GCF has also been criticized for its lack of accountability and transparency, but in 2016 the GCF has vowed to disclose as much information as possible including webcasts of their meetings.
Coming of Age
As explained in a recent Nature article, "The Green Climate Fund (GCF) has had an inauspicious start to life — but 2016 could be the year it springs into action."
"This year will be important for demonstrating that the GCF can fund transformational actions in developing countries," says Niranjali Amerasinghe, who studies climate finance at the World Resources Institute in Washington DC.
As of December 2015 the fund had approved $168 million for eight climate projects, including wetland resilience programmes in Peru and climate-resilient infrastructure in Bangladesh. In March the fund approved projects worth $2.5 billion for 2016. For example, Odisha, India will benefit from a GCF financed project that will raise the ground water levels in ponds leading to increase in irrigation facility in the 13 districts of the state.
Related
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Obama Pledges $3 Billion to the Green Climate Fund
Why We Need the Green Climate Fund
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Reasons to be Optimistic about a Global Climate Agreement in 2015
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