Cattle ranching, gold mining, industrial farming — when you think of the primary forces threatening the Amazon rainforest, these big businesses rightfully come to mind because of the deforestation and pollution they cause.
But not all economic activity is harming the Amazon. At the other end of the spectrum, Indigenous communities across six countries are engaging in what’s come to be called bio-business, an approach that elevates biodiversity as a core metric of success.
In other words, if the surrounding wildlife flourishes, then the business in question is doing a good job. This emphasis on ecological well-being has helped to restore degraded landscapes, while also generating income for communities that act as sovereign guardians of the forest.
Many of these bio-businesses are now receiving funding from the Green Climate Fund, the foremost climate financing group in the world, along with its partner, the Inter-American Development Bank, which have together committed $600 million toward “sustainable agroforestry, native palm cultivation, non-timber natural forest products, growing native species timber, aquaculture, and community-led nature tourism.”
The Green Climate Fund, or GCF, is a multilateral organization working tirelessly to help countries both mitigate the causes of climate change, and adapt to the environmental, economic, and social impacts that are already here.
The GCF was formally created during the 2010 United Nations Climate Conference (COP15), but kicked into high gear following the Paris climate agreement in 2015. Because wealthy countries have released the majority of pollution causing climate change, it was decided that, as a matter of justice, they would raise $100 billion a year to fund climate action in poorer countries. The GCF was then tasked with mobilizing, overseeing, and directing part of this funding to projects around the world.
Since it began, the GCF has committed $10 billion to 190 projects, mainly in the Asia-Pacific, Africa, and Latin America and Caribbean regions. In 2021, the group has launched 13 new projects.
While multilateral institutions have a reputation for being opaque, the GCF prides itself on transparency and accountability. On its website, you can find out how it gets financing, where all of its money goes, how decisions are made, and details about its more than 200 partners. You can even access transcripts from board meetings. But that doesn’t mean that the average person is going to become a scholar in the minutiae of the organization.
So, to save you some time, here are five essential things that you should know about the Green Climate Fund.
1. A Country-Led Process
The history of international development has its fair share of missteps, harmful interventions, and power imbalances. Because the GCF doesn’t want to add to this regrettable legacy, it only funds projects that support a country’s broader climate goals.
The GCF achieves this through a rigorous process of project analysis and equitable country input. Its board is evenly split between developing and developed countries to reduce the influence of economic and political powerhouses that often dominate similar forums. All projects have to either reach broad consensus or receive the support of 80% of members before they get approved. The board’s ongoing negotiation process — livestreamed for all to see — has helped to build trust among members, and prevent geopolitical spats from creating dysfunction, according to Climate Change News.
This process has allowed developing countries to propose projects that have clearly articulated goals and climate justice principles.
For example, the board recently approved $33 million in grants for a project in Thailand that will protect farmers from increasing floods and also help them better manage dwindling water supplies. As the investments take hold, up to 25 million people living in the Greater Chao Phraya River Basin may see their food and water security and livelihoods improve.
Another $268 million in grants and loans was recently committed to helping communities in the Dry Corridor of Central America and the Dominican Republic. Declining rainfall and increasing temperatures have made it harder for farmers to maintain their livelihoods in the region, and contributed to rising levels of poverty and migration. The funds will help communities in seven countries safeguard water supplies and adapt to the changing climate.
2. A Holistic Approach to Climate Financing
Climate change doesn’t exist in a vacuum. It affects all aspects of life — from the food we eat to the air we breathe to a society’s racial and gender dynamics to the ways communities earn income. Similarly, all forms of climate action have effects that go beyond their immediate focus. If a coal mine is closed, for instance, the surrounding wildlife will benefit right away, but the community that depended on revenue from the coal mine will need financial support to transition to a new economy, otherwise they may struggle. This is the general idea behind a “just transition” and it’s something that the GCF strives to realize.
The organization begins by prioritizing projects in the world’s poorest countries that are the most vulnerable to climate change. By focusing here, the group aims to ensure that no one is left behind. The GCF strives to promote gender equity and invest in Indigenous communities, while taking care not to create indirect social harms. The group also invests in sustainable economic development, such as the bio-businesses described above.
3. 50-50 Mitigation and Adaptation
For years, climate action focused primarily on reducing greenhouse gas emissions through investments in renewable energy and energy efficiency. This is known as climate mitigation. But as the impacts of climate change have become worse, it’s become clear that communities also need help adapting to evolving environmental conditions. The United Nations has since called for climate financing to be evenly split between adaptation and mitigation, a mandate that the GCF has adopted.
.@WorldBank mobilizes $157 million from @theGCF for investments in #ClimateFriendly cooling technology in— World Bank Energy (@WBG_Energy) October 16, 2021
🇸🇻 El Salvador
🇸🇹 Sao Tome and Principe
🇲🇰 North Macedonia
🇱🇰 Sri Lankahttps://t.co/6FwhAuSJjl | #ESMAP#CleanCoolingpic.twitter.com/EOvqFVkl9j
In recent years, the organization has increased its support of adaptation projects, particularly in vulnerable countries. One such project focuses on helping people cope with heat waves and rising temperatures in nine countries in Africa and the Asia-Pacific region. Funding will go toward a cooling facility to provide sustainable cooling solutions, as opposed to traditional air conditioners that release greenhouse gases into the atmosphere.
Another adaptation project seeks to mobilize funds for the protection of coral reefs in the waters of 17 countries.
At the same time, the organization continues to invest in renewable energy solutions such as improving solar panel efficiency in Chile, supporting one of the world’s largest wind farms in Egypt, and providing clean cook stoves in Nepal.
4. Rapid Financing
Bureaucratic processes can slow things down in multilateral organization, with delays sometimes squandering project goals. The GCF has been working to streamline its application, approval, and oversight processes to ensure that groups engaging in climate action can receive funding and support as soon as possible.
In particular, the organization has a “simplified approval process” that helps interested parties gather all the requisite information needed for an application for funding. Then, the board aims to review and approve funding for eligible projects within weeks or months. This expedited timeline can mean the difference between communities adapting to worsening climate impacts and communities facing tough decisions like whether or not to migrate.
5. Sector-Wide Collaboration
Climate financing is an enormous field. Transforming the global economy, phasing out fossil fuels, and adequately investing in adaptation measures will require trillions of dollars in funding.
The GCF plays a small but important role within this space. Perhaps most importantly, the group acts as a sort of beacon, guiding public and private investors toward smarter, more effective, and more intersectional investments. The group helps to manage a range of public-private projects that aim to foster long-term financing and works with hundreds of agencies, institutions, foundations, and nonprofits working to combat poverty and climate change.
Because of its central position, values championed by the GCF gain traction in halls of power elsewhere. The once fringe ideas of climate justice, a just transition, and intersectionality are now mainstream ideas in the climate space. That can’t be attributed solely to the GCF, but its support of these ideas lends them institutional legitimacy.
The decade ahead will test whether humanity can overcome the greatest challenge it has ever faced — the climate and biodiversity crisis. Along the way, the GCF will be making sure our transition to a habitable and just planet is done the right way.
Disclosure: The Green Climate Fund is a funding partner of Global Citizen.
Register Now for the Green Climate Fund Private Investment for Climate Conderence 2022, on 15-16 SEPTEMBER 2022
The Green Climate Fund (GCF) invites you to the annual GCF Private Investment for Climate Conference (GPIC) 2022, a flagship event that brings together a range of leaders from the private and public sectors to explore innovative ways of unlocking capital for climate action at scale in developing countries. GPIC provides a platform to address market failures, showcase new ideas, and forge new partnerships. Each day will feature leading keynote speakers and inspirational individuals taking climate action, in a forum that connects investors, fund managers, donors, technology providers, and others looking to deepen their engagement in climate finance and to create change.
Register by following this link.