The Green Climate Fund at a Crossroads

Zachary Hurwitz
The Green Climate Fund headquarters in Songdo.
The Green Climate Fund headquarters in Songdo.

The board of the Green Climate Fund (GCF) met this past weekend at its headquarters in Songdo, South Korea, to advance policy discussions to make the Fund operational by year’s end.

Among many areas of contention, the Fund’s draft Results Management Framework (RMF) spells out what types of projects and programs the Fund might finance. Rather than a detailed laundry list of sectors, the draft policy so far sets only a broad and vague goal of “increased low-emission energy access and power generation.” 

Because this goal is so broadly defined, many projects and programs could be financed through the Fund: the good, the bad and the ugly. 

Imagine a coal-fired power plant like Tata Mundra receiving GCF money because the developers decide to install carbon capture technology to store emissions from the plant in the ground. That’s not reducing emissions, that’s putting them somewhere else.

Or, imagine a destructive dam like the Grand Inga Complex receiving GCF money because its electricity replaces thermal-based plants in South Africa. Yet, local populations in the DRC might receive few benefits, while the dams could block the flow of sediments that actually help the basin absorb carbon. That’s cleaning the grid of one country, while causing impacts in another.

These kinds of energy projects would not be so much transformational as just a little bit better than business-as-usual. Indeed, the Green Climate Fund has so far not developed stronger indicators than the simple “how many tons of CO2e (CO2 equivalent) would be reduced” in order to measure how investments would help shift the world to a new paradigm of low-emissions sustainable development. Without more rigorous sets of indicators, the GCF risks privileging large-scale projects with great environmental and social impacts, or projects that may produce lower emissions than the status quo, but are nonetheless harmful and polluting.

This is why close to 300 organizations and citizens’ groups from the Global South urged the GCF board members this weekend to adopt an exclusion list to prevent Fund money from paying for Dirty Energy. The statement calls on the GCF to exclude fossil fuel financing altogether, while avoiding support for mainstream, established energy technologies such as hydropower that can generate emissions, cause serious environmental and social impacts, and may ultimately reduce the capacity to adapt to climate change.

International Rivers has endorsed their call. Destructive dams and dam cascades should be excluded from GCF funding not only because of their climate, human health and environmental impacts, but also because, simply put, they already have existing financing channels such as public support through national development banks, or multilateral development institutions. 

A real paradigm shift would mean investments in renewable energy that support only the best available and lowest-impact renewable technologies over an entire life-cycle, with potential for replication and scaling up. A real paradigm shift would mean a rapid phase-out of fossil fuels. A real paradigm shift would mean building decentralized renewable energy for all that creates local ownership and economic growth. 

These types of projects and programs should be reflected in the Fund’s policies. As the Green Climate Fund approaches a decision about the types of energy projects and programs it supports, it should choose the right path: the path away from Dirty Energy.

Tuesday, May 20, 2014