The Green Climate Fund (GCF) is one of the most crucial components of the international response to climate change, but the jury is still out on whether or not the bureaucrats controlling the fund’s pursestrings know how to effectively spend the money they’re raising. The GCF is a tool to help fund climate change adaptation and mitigation efforts, especially in poorer parts of the world, but as Climate Home reports, there’s no reason to think those funds will intelligently allocated:
We have already seen plenty of examples that show that “green” investment doesn’t necessarily provide any reduction in carbon emissions. Past evidence shows that even when there is a positive effect, the amount of carbon saved per dollar invested is often low. And, there is currently no single body with overall responsibility for quantifying the impact of all these projects and sector initiatives, reconciling them with science-based outcomes. […]
This is an occasion where development banks and investors might be able to take the lead from the corporate sector. Almost 150 big businesses – including Ikea, Unilever, Axa, Toyota and BT – are now committed to science-based sustainability targets based on a 2 degree trajectory. This allows them to take a long term view, ensuring that their contribution to a low carbon future is both meaningful and aligned with the science of climate change.
There has been a lot of methodological groundwork done to help businesses in different sectors to set targets and meaningful metrics for progress. Taking the best available science, companies consider the contribution that their sector can make in reducing carbon emissions and develop targets in line with this.
Of course, mulling over how to spend the $100 billion annual fund presupposes that this cash actually exists, but we already know that, at this point, it doesn’t. So far the fund has amassed just over $10 billion, well short of the end goal that—remember—is an annual target. The Obama administration made its first $500 million contribution to the GCF last month, allocating State Department funds to work around a Congress that has promised to nix payments.
But even if the world’s rich countries manage to raise $100 billion every year, there’s no indication that they’ll know how to spend it. The GCF has already run up against logistical hurdles on this front, and last November displayed questionable judgment when it rushed through funding approval for its first projects to have something to show for itself before the Paris climate summit the following month.
These are major issues, and they threaten the viability of the one mechanism responsible for bringing the world’s poorer countries on board with the emissions reductions targets set out at last December’s summit.