With pledges exceeding US$10 billion, the Green Climate Fund (GCF) is open for business, and expected to start disbursing funds over the next few months. Developing countries are now focusing on “GCF readiness” – ensuring that the institutional arrangements required by the GCF are in place at the national level, to increase their chances of accessing GCF funds.
This is a good time, therefore, to remind policy makers in developing countries that GCF requirements are only one part of the picture that should be kept in mind while designing the national institutional architecture for climate finance. There are far more important national considerations that should be taken into account first, before deciding where the GCF arrangements will fit in.
The most important consideration, to my mind, is: how can climate funds (national and international) be made easily accessible by those who need them the most (i.e. the “energy poor”, or the most vulnerable to climate impacts)? This calls for “pipelines” right down to the sub-national and local level, with simplified, flexible and quick access procedures.
Second: how can funds from different (national and international, climate and “non-climate”) sources work together, when they are working towards the same goals (i.e. reduced vulnerability, or low carbon development)? This calls for improved efficiency through consolidation with national budgetary allocations within and across sectors, and the elimination of duplication.
Third: how can existing national institutional infrastructure be used and strengthened to channel climate funds to the local level? This calls for using, improving and strengthening existing channels – for instance, existing channels for national budgetary resources to the local level – where possible, recognising that there will never be enough funds to duplicate these for climate change – particularly not on a sustainable, long-term basis.
Fourth: how can monitoring and accountability for activities funded by (national and international) climate finance be improved? In particular, how can “top-down” accountability be strengthened, so poor and vulnerable communities can seek quick redress when things go wrong? This is an area that has been neglected for too long. It will need investment, but it will be worth it in the long run if it serves to promote a more results-based system.
Finally: how can non-government stakeholders become real partners in the urgent goal of resilience building and low carbon development? This could include fixed national allocations for non-government organisations to innovate and implement activities, including non-government networks for sharing experiences, and innovation in government/non-government partnerships.
In the past, international financial institutions (IFIs) have determined what countries must do to access and use their funds – whether it is submitting project proposals, or creating alternate procedures. The GCF professes to signal paradigm change, and at least through its “Enhanced Direct Access” modality, provides flexibility to countries on the sort of national arrangements that must be put in place.
This is an opportunity, therefore, to discuss not just the arrangements for the GCF, but also for national climate finance. The GCF will never be the only or even the major source of climate finance. Developing countries will have to invest their own resources – they are already are doing so. The main consideration for them should be to figure out how they can make the GCF resources work with their national investments, instead of building a custom-made infrastructure for the GCF that will work outside the existing domestic system, starve for lack of resources, and achieve very little.
In borrowed words: ask not only what you should do to access GCF funds, but first, what your country really needs (with apologies to JFK, for botching up a perfectly good quote).