Today at the COP15 meetings in Copenhagen, the governments of the UK, Mexico, Norway, and Australia proposed the establishment of a new Green Fund and a set of governance principles. The document is not final or even formal, but it is encouraging progress and entails a clear indication that the US is not expected to fully bear the financial burden.
In fact, the proposal states that, “whilst recognizing the responsibility of developed countries, future climate finance arrangements should be responsive to future changes in the global economy.”
The COP15 negotiations, as agreed to in the Bali Action Plan two years, are structured around four simultaneous issue tracks or pillars, which include mitigation, adaptation, technology transfer, and finance. Indeed, if any progress is to be made on mitigation, adaptation, or technology transfer, countries must make headway on various financial aspect, including scale, architecture of financial mechanism(s), how to calculate contributions, public versus private funding, and governance.
The governments behind the new proposal emphasize that, “financing will need to be scaled up significantly and urgently, starting fast and rising over time.” For this reason, they propose “fast-tracking funding” that consists of the immediate administration of a mitigation and adaptation fund to be held by an existing international financial institution and that countries maintain their bilateral financial agreements. Not a terrible idea, seeing as the GEF highlighted in Copenhagen that it has invested $2.7 billion in mitigation so far. Existing mechanisms are not ineffective, but can they step up to the scale and efficiency required?
There is generally agreement that finance for mitigation and adaptation must be better coordinated and streamlined. This will also help ensure that funds meet priority needs. The UK, Mexico, Norway and Australia have thus floated the idea of a new Green Fund, which would support country-led plans, projects and policies, balance equally mitigation and adaptation, and prioritize least developed and most vulnerable countries in addition to results-based mechanisms.
The proposed Green Fund would be governed by a board of individuals that represent developed and developing countries equally and that reports to and is accountable to the Conference of Parties (COP). The governance and operations would emphasize transparency, expedience, and efficiency and aim to leverage private sector finance.
Discussions continue regarding how to calculate contributions to the fund. But the proposed Green Fund is a constructive contribution to the debate and proves that the world does not expect the United States to pay for everything, and that developing countries like Mexico do not expect a free lunch.