A number of news outlets have reported on the creation of a new international “Green Climate Fund” and/or an international pledge to mobilize $100 billion in international climate financing annually by 2020 as outcomes of the 2010 United Nations climate conference in Cancun. In many cases these distinct outcomes were blended together as the creation of a “$100 billion fund.” While referring to this pledge as a “fund” (small “f”, no “Green Climate”) is arguably accurate and appropriate for a general audience, it is worth clarifying the lack of formal linkage between the two.
The Green Climate Fund is a specific international financing mechanism or channel for receiving public (or possibly some limited types of private funding, such as foundations), like the Global Fund to Fight AIDS, Tuberculosis and Malaria that was created under the Bush Administration. The Fund (big “F”) has received no money nor does it have a governance structure, which will be negotiated in 2011 and beyond.
On the other hand, the $100 billion fund (small “f”) is an international pledge, akin to the pledge at the 1992 Rio Earth Summit by developed countries to provide 0.7 percent of their gross national product each year for development assistance. Essentially, it is an accounting standard against which dollars are tallied after they are spent, invested or appropriated by a wide variety of different sources, including the Green Climate Fund. The only clear accounting guideline so far is that both public and private funding will count, which could ostensibly include foreign direct investment, international offsets and even charitable contributions.
Overall, there is no language in the text of the Cancun Agreements that establishes a direct relationship between the Green Climate Fund and the $100 billion pledge. Indeed, the pledges are never mentioned in the same paragraph. In one instance, an indirect relationship is implied: the text states that “a significant share of new multilateral funding for adaptation” will flow through the Green Climate Fund. This is the only time the text refers to a specific channel for any new financing, and it does not establish any relationship between the scale of “new multilateral funding for adaptation” and the $100 billion pledge. If countries plan to establish a formal link between the two pledges, it has not yet been agreed and would likely find strong opposition absent major concessions from some negotiating parties.
It is important to note the difference of the two funds in order to draw analysis of how to measure the actual size of the Green Climate Fund, which I will address tomorrow.
Andrew Stevenson is a Research Assistant at Resources for the Future.
