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  Statement: Climate financing must be effectively disbursed and benefit biodiversity and communities
by Faizal Parish, Director, Central Focal Point of the GEF-NGO Network, 20 January 2010, Berlin, Germany

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It is now universally recognized that addressing climate change is one of the most important considerations in securing the future welfare of the world’s people and maintenance of natural ecosystems and associated services and species. It is also recognized that developing countries especially least developed countries, SIDS and fragile countries are going to be increasingly vulnerable to the impacts of climate change and at the same time have the lowest ability to adapt. At the same time the degradation of natural ecosystems is leading to loss of biodiversity and reducing the options for biodiversity and people to adapt to climate change.
 
Although progress at UNFCCC COP 15 in Copenhagen in December 2009 was mixed - some advance was made when developed countries committed US$30 billion in additional funds between 2010-2013 in so-called “fast-track” finance to support immediate action on climate adaptation and mitigation by developing countries. It was also agreed that this would be scaled up to $100 billion per year by 2020. 
 
In order to ensure that these funds are allocated in a strategic manner and reach the targeted developing countries as soon as possible – they should be channeled through existing mechanisms to support immediate action, rather than await the establishment of new mechanisms. Furthermore developing countries called for the funds to be channeled via the formal UNFCCC approved funding mechanisms. 
 
The UNFCCC already has three existing funding mechanisms which are fully operational and a fourth mechanism which is expected to be operational by 2011. The operational funds are: the GEF Trust Fund (primarily for mitigation and capacity building action – as well as biodiversity and land degradation); and the Special Climate Change Fund (SCCF)/the Least Developed Countries Fund (LDCF) which primarily support adaptation. These funds which have been established progressively over the past 16 years are now fully operational and have the proven ability to disburse funds relatively rapidly to support well designed activities which generate positive results. Reforms put in place by GEF in response to UNFCCC and other convention guidance in recent years have significantly enhanced their responsiveness to country needs and their effectiveness in channeling resources in a timely manner to priority projects. A fourth fund – the Adaptation Fund is expected to be operational by late 2010. The GEF Trust Fund is unique in that it is also the finance mechanism of other Conventions including CBD which enhances the option of synergies. 
 
The main problems facing these funds have been insufficient contribution of resources by developed countries. The GEF Trust Fund currently has only $200 million per year (or $1.6 million per recipient country) to disburse for climate change and the SCCF and LDCF only have about $60 million per year combined. This is totally inadequate given the common recognition that funding flows of $100s of billions a year need to be generated to make effective changes. 
 
The initial commitment of $10 billion of additional climate financing per year is a significant step forward. However the immediate challenge is to ensure that these funds are effectively disbursed using channels which meet the demands from recipient countries for transparency, predictability and effectiveness as well as responsiveness to convention guidance. Serious concerns have been raised that the promised funds will not be delivered or will be provided by repackaging of existing ODA or other funding flows. 
 
The GEF NGO Network with 600 member organizations around the world has monitored and provided policy input to the operation of GEF over the past 15 years as it has channeled more than $10 billion to more than140 countries to address pressing global environmental issues. We have seen GEF develop and evolve to bring innovation and meet needs despite the shortage of core resources.

Looking at the future we believe that:

  1. In order to secure easy access to fast-track climate finance by the recipient countries as well as transparency, the majority of funds should be channeled through the existing UNFCCC related funds (GEF, LDCF, SCCF and AF) rather than through bilateral or other ad-hoc mechanisms not answerable to the Convention and may have restricted delivery options. 
     
  2. Climate finance needs to be provided in a manner that maximizes synergies with the other critical global needs of addressing biodiversity conservation, land degradation and enhancing social welfare; 
     
  3. At the same time further reforms are needed to strengthen the role of recipient countries and civil society in governance mechanisms, enhance programme delivery, monitoring and evaluation as well as stimulate coordination and synergy between funding mechanisms and focal areas 
     

The Network therefore calls for immediate action to:

Provide adequate short term finance for Climate Funds

  • An immediate minimum US$1 billion/year allocation starting in 2010 for the LDCF, to enable the full implementation of the National Adaptation Plans of Action (NAPAs) in all the LDC countries; 
     
  • Provision of US$1 billion/year for the SCCF starting in 2010 for both Adaptation and technology transfer activities in non-LDC countries; 
     
  • Allocation of at least $4 billion ($1 billion per year) for the GEF 5 Replenishment (2010-2014) to expand the finance available through the GEF Trust Fund to support climate mitigation action and capacity building; (Note The Network calls for a total financing of 9 billion for GEF 5 for all six focal areas)
     
  • Scaling up of finance for the Adaptation Fund once it becomes operational;

 Maximise synergies with biodiversity and land degradation

  • Additional finance of $500 million of climate finance per year to be channeled through the Biodiversity and Land Degradation windows of the GEF in recognition of the severe impacts that climate change will have on biodiversity conservation and enhancing land degradation as well as the role that natural ecosystems play in sustaining the life of communities impacted by climate change. 
     
  • Support the rapid development and application of ecosystem management approaches which can generate simultaneous benefits for biodiversity, climate change and community welfare such as conservation and restoration of forests and peatlands. 
     
  • Stop perverse incentives for climate “mitigation” creating major negative impacts on biodiversity, climate change such as subsidies for biofuels, ocean fertilization and forest conversion to exotic plantations.

Further enhance governance and civil society engagement in climate finance mechanism

  • Further strengthen the governance and planning structures of funding mechanisms to enhance country ownership while maintaining regional and global coherence and strategies. 
     
  • Broaden the range of agencies through which countries can access GEF, SCCF and LDCF finance and develop expedited or access for medium or small grants to local government or civil society entities
     
  • Further enhance the project cycle to shorten the time from concept submission to fund disbursement 
     
  • Ensure effective engagement of all stakeholders including civil society in programme development, implementation and evaluation.

 



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